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tv   Inside Story  Al Jazeera  September 1, 2015 5:30am-6:01am EDT

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al jazeera buenos aires. all the day's news is on the al jazeera website, there you can see president obama as he made his remarks about climate change in preparation for that important conference taking place in paris at the end of the year, al jazeera.com. [ ♪ ] the national relations board was asked to decide if an employees in a company uniform working by company rules worked for the company or someone else. in a big victory for workers, the nlrb decided if you look, sound and act like your work life is supervised by the big company, no accounting tricks change the fact, it's your employer. meet the new boss.
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it's "inside story". welcome to "inside story", i'm ray suarez. over the years, many big cooperations evolved an arm's length relationship with people that work in branded businesses. they created a middle man, who was the real employer in legal terms, even though the parent corporation regulated everything about the workplace. products, hours, work rules, techniques, training, standard. what had model did was shield the parent corporation from legal action. complaints or challenges to the rules laid down at corporate headquarters. the answer was we are not your bosses. now the national labour relations board was voted 3-2 to recognise the parent corporation as joint employers. a decision ending tremors, not only through companies
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like mcdonald's. but giant firms like uber. >> protesters called attention to fast food workers, leading to minimum wage increases in some parts of the country. now a major labour victory that didn't get a lot of attention, easing the way for workers to get higher wage, and the right to unionize. the national relations board handed down a ruling, enabling unions to negotiate with large parent companies. currently corporations like mcdonald's, wendy's and burger king operate using franchises. other businesses that rely on outside contractors would also be affected. >> these business arrangements, contracting arrangements, franchise arrangements appear in a multitude of injuries, whether it's hospitals that contracts out certain services. some hospitals will use staffing agencies to augment the mursing
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staff. very often they contract out the house-keeping services. >> i think there's an industry affected by the ruling, and that employees. >> until now the parents were considered joint employees, if they had direct control over matters. many corporations argue the ruling could destroy the business models. a benefit of franchising and contracting is to spread the brand name while minimising the legal risk and responsibility. >> some of them, i think, are looking at doomsday scenarios about what the ruling mines, i think the predictions are very overheated this new ruling may affect a case the upcoming board filed against mcdonald's and
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franchisers, retaliating against protesting joining forces for higher wages >> the bottom line is that all that being said, that workers rights are also important. >> franchise owners are unhappy with the ruling, arguing they would not be able to run their own businesses if they had no control over the pay and benefits of employees they hire. business groups called on congress to overturn the nlrbs 3-2 rule. michael layman, the executive director of the coalition to save local businesses joins us, and craig becker, general council for the aflcio. michael, let me start with you - the ruling came at the close of business on thursday. workers went to work over the weekend. a large number started this morning. what was different? what changed? >> well, i'll tell you, franchise and other business owners are livid at the decision. keep in mind that if you are a small business owner, you are
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meeting countless demands, facing a tonne of pressure. you have to be peter maresey in the next segment to understand the stock market and the economy. they are up against a tonne of head winds and go to work every day to make ends meet, and this decision out of the nlrb threatens to take all that away from them. keep in mind it's the nlrb that is the home of unconstitutional recess, and has installed all sorts of rules that are pro-union from the so-called ambush election rule, aiming to artificially unionize the americans against its will, and franchise other small businesses, all the contractual relationships are under fire as a result of this ruling from an unelected body of regulators. >> same question - when workers headed back to their place of employ after the ruling came
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down, what was different. >> well, i think really very little was different. what is different is that the board said if you are in an organising union, and sitting with parties that control terms and conditions of employment, we'll let you sit with all the parties who control your terms and conditions of employment. in this case it was not the small employer at issue, there was no question the smaller employer was an employer. the question was the large employer, browning, ferris, controlling the speed of the line, in which the recycling plant was working. if they were concerned about that, part of the working conditions was to say you can bargain if you choose to join a union and engage in collective bargaining with the entity controlling that part of your work day. >> all the reaction points out that this makes is easier to organise. why so. help me understand why, with the
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unions in retreat in so many places of work, they are more able than they were wednesday afternoon to organise. >> well, it doesn't change what workers have to do to organise at all. what it changes is the outcome of the organising. take the employers in the plant. if they choose to organise and file for an election, when they vote, they can think what will it accomplish if we vote yes. they say we can negotiate over wages, not only with our direct employer, the small employer, but browning ferris who set a ceiling on what the employer could pay us, and negotiate with browning ferris, telling the supervisors what we can do. it gives workers the ability, if they organise, to bargain with life. >> i hear your anxiety on behalf of the franchisees.
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aren't a lot of the pressures that you describe them being under, being imposed by the people who allow the franchise to be let out. don't they set conditions, standards, product standards in ways that are more onerous than a worker can demand. >> the franchise industry, dealing with this year since mcdonald's was targeted in july. now as a result of browning ferris, the entire employment community is seeing the threat of the joint employer issue. just in the franchise community, there's a larger proportion of women owned. minority owned, veteran owned businesses. a lot of people who are successful in certain years, use life savings to open a franchise.
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why, because the path to success is in front of you. you use a recognisable brand. as an employer, you have a separate employer identification number. you call all the shots in terms of hiring, discipline and supervision - all the things that go along with buying an employer. every franchise business is locally owned. >> i get all that. doesn't this allow the franchise holder to share the burden of that relationship with the company that's putting in place requirements, work rules, uniforms, processes on the line, product standards and all of those things? >> that's right. it allows the franchisor to share that, and that is why franchisees hate the rule. they went into business because they are entrepreneurs, and to call their own shots. any large company that contracts with a small company or fron chisor with an agreement with a franchisee wants
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to see that relationship succeed, and all of those agreements and contractual service arrangements are threatened by the decision. gentlemen. stay with us. millions of americans work for temp agencies, labour subcontractors and franchise holders, why did this proportion of the workforce grow so large. what was the reason? will the rule change relationships between employees and workers, meet the new boss, it's tonight's "inside story". >> follow correspondent roxana saberi on a personal journey. >> this is the first time in 20 years i've been back to my mother's homeland. >> a special in-depth look at japan. the legacy of the atomic bomb. controversial american military bases. and the country's evolving identity.
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story". i'm ray suarez. fast food companies dictate menus, work rules, uniforms and training for tens of thousands who fry potatos, pack sandwiches at stores across the company. arriving the company, and they maintain they employ a fraction of the workers. why? after controlling everything that goes on inside a store, down to the embossing on the napkin, why the willingness to give away authority. we are looking at a ruling that the big companies are employers. back with mike layman and craig becker, why is this such an enterprises? >> i think there's different have been and
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industries in different places. many are legitimate. it's not always an attempt to avoid the obligations as an employer. what is important is there's not a binary subdivision. it's not necessarily that one entity is the employer and the other is not. let's look at the facts about who controls the aspect and it may be that there's more than one entity that does that. the board points out they are not altering the division. what you control, you have an obligation to bargain about. if mcdonald's controls some aspect. they should bargain with monday. if the operator controls other aspects. they should bargain about those.
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it takes the tacts and divides you have responsibilities for those that have responsibility. >> are we far from knowing what this will do and how it will play out? >> we are. the mcdonald's case has put the franchise industry in the soup on the issue. browny ferris is not a franchise, it shows ou the community is threatened. this is an effort to make small businesses into big business. small businesses are frustrating. they are much more fruitful to organise. keep in mind the talk. our friends at the afl and c.g.i. u. they are not friends. they are targetting the industry very much for
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undermining. if they revolutionize the workforce, they make $155 million, half on initiation fees. that's lot of money and the one targeted. >> workers wouldn't be in for a taste. you make it sound it's just the union. it's an issue at small business. unless you describe money on tree, there's no onus for it. there's nowhere other than cuts. living. >> or reallocation in who is making money in the economy. if you are going to go out to organise the workers, i don't think you'd choose fast food
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workers, you choose them because benefits. if you look at the economy since 1970s. that may be a relationship. but it's not gone into the products. if you organise the workers, they need a raise. disproportionately younger workers or those with a turnover. every time a new worker signs on. money in the pocket. >> craig becker is general council for the aflcio. thank you for joining us. >> can franchise holders and others absorb a marginal increase in the cost of labour and stay in business. having direct responsibility for the working lives of employees, will that change the
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profitability of big companies, engineering an arm's length relationship. what does it mean to be a joint employer. meet the new boss. it's tonight's "inside story". >> in order to save my children, i had to try to save everyone else's. >> chicago mothers, fed up and fighting back. >> what we've essentially done is created an outdoor community center. >> changing the city one block at a time. >> i'm out here to encourage them, to tell them there's a better way.
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>> there's a line of police advancing toward the crowd here. >> ferguson: city under siege. >> it isn't easy to talk openly on this base. >> and america's war workers. >> it's human trafficking. >> watch these and other episodes online now at aljazeera.com/faultlines. story". i'm ray suarez. let's talk about the dollars and cents of the nlrb decision, what impact will it have on the cost of the labour, the cost of things you buy, the profitability of businesses and hire. joining me now william spriggs, a professor of economics at howard university and the chief economist. and peter moreiesy, a professor of business at the university of maryland. how would you answer the questions.
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things? >> there's two ways to do with this. post unionization, mcdonald's, $15 an hour wage. that's about a dollar on a meal, which is a sandwich, fries and coke. many can afford that. $15 an hour wage in manhattan, would not have much of an impact. the income is six figures. if we had, say, a uniform labour standard because they unionized nationwide and negotiated like autoworkers do, you see prices in small towns out into the country. them. >> professor spriggs, what do you make of that analysis? >> that is really a stretch. >> isn't is it in georgia to questions. >> that's not a relevant question.
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if you organise mcdonald's, you may not want a national vote. getting to the point of collecting green cards to say we have newer workers to have the -- enough workers to have the vote, that may not be the way you want to approach it. workers now at a franchise can organise. nothing in that changes that fact. it doesn't change that reality. what changes to the table. who has to come to the table is not just the franchisee, but stable. >> it's a giant corporation... >> a better example is the case that's ruled on. in much of manufacturing you have temporary workers brought in, working side by side with other workers who are employed by the employer. let's use nissan as an example. if it were organised by the
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u.a.w., if you bring in temp workers sitting side by side on the line doing the job, that seems absurd to say while these are union workers doing the same job under the same direction with the same supervisors, but they are not union, that will create a huge loophole in what we mean by organization. it's important to remember what has really happened here, why the fracturing of the labour force. we have really destroyed and turned over labour and job ladders for workers. just an an example, if you went back in the late 1990s, when many manufacturers had janitors and private security guards, they were steps up. you might work on the mission as a jan tore. today in automotive - they are in janitorial services. they are not in the auto industry, they are in private security guards.
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huge. >> is it necessarily going to change the cost profile of the things people buy every day to change the power relationship between the workers and bosses. >> if we talk about mcdonald's, yes, joerts, no -- general motors, no. suppose they are using contract employees, they'll form a union and negotiate separately. the automakers do not pay workers the same for every job. in a parts factory you don't earn as much. the differentials would continue, and in the notion of the kind of technology in factories, of a jan tore on a ladder to be a skilled distant. >> there's a lot of people who work for subcontractors, who remain on permanent temp basis, even when they want full-time work. eliminated. >> it will be.
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>> i think that we are confusing issues here. it's one thing to talk about large employers creating a sub class, and the issue of whether someone who works at mcdonald's working for a franchisee is an employee of a company in illinois, or an employer of the franchisee in new york city or tus con, alabama. that's is a different thing. one thing i do see happening is in order to avoid lawsuits, probably mcdonald's asserts a higher standard on the franchise with workers, which on the face of it is good for workers. one must remember the fast food industry is one where the market is declining, they are losing customers, polices are important. if you think you can raise the
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cost of a meal from $6 to $17 without it having an impact on the numbers sold. we have repealed modern economics, because it says the demand surfs slowed down. >> you can't sit and say with a ph.d. in economist. >> and you have that, and the $5 million raise that the head of mcdonald's had, all that has nothing to do with mcdonald's or the cost to buy a hamburger, you can't talk about the increase company. you think $5 million didn't matter. you didn't argue when it was the c.e.o. you can't have... (both talking at once). >> are you saying prices don't matter. are you saying that $5 million to the c.e.o. doesn't matter, and how much i pay for a hamburger. where does he get paid. >> let me clarify... yourself. >> you are giving as good as you get both of you. >> okay.
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>> what changes now, is the american public watching the 15 crusade around the country ready to pay that incremental higher cost if they think workers they do business with every day is treated tore paid better? >> there's a deeper issue here. it's not just the price of the burger. first off, fast food industry is growing faster, despite the fact we've had minimum wage increases affecting that industry. that industry has been adding jobs at one of the fastest rates every month, it continues to grow. it's not so simple that raising wages automatically leads to pricing increases. >> i'm going to have to leave it there. peter, professor of business. william, professor of economics at howard university. great to have you both. i'll be back with a final
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in business it's common to see practices that dance up to the edge of existing law, but don't break it. certainly as contingent labour is common, as bosses got nearly unlimited power to higher and fire at will, in a nonunionized labour force, subcontracting workers basically saying "they don't work for us", was the law. it may not have been nice. it may not have been fair. it was legal. it was entirely consistent with
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the trends in the marketplace that saw employees gathering strength and power, and workers singly or in groups losing it. individual bargaining power is deluded by a period of high unemployment and underemployment, like the one the country lived through. it may be that the pendulum is swinging in the other direction. the ruling one of many sites growing sympathy for workers at the bottom of the labour force. will you pay a nichol or a time for a hamburger, $0.20 more for a pizza. if you know workers on the top floor have a little more power to talk back to management. proposition. i'm ray suarez, that's "inside story".
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