Archive for the ‘Business’ Category

In Oklahoma, The Times, They Are A’Changin’

Tuesday, May 17th, 2016

In Oklahoma, we are now witness to a confluence of events, unintended consequences of perhaps misguided political and business decisions, that are shakin’ the windows and rattlin’ the walls, to paraphrase the great Bob Dylan. And I’m talking actual and metaphorical.

On the actual side, consider this. Prior to 2009, Oklahoma averaged two earthquakes a year of a magnitude greater than 3.0. Last year, there were more than two a day. Cornell University Seismologists studying this say the rise in earthquakes is unprecedented in terms of sheer volume as well as in how fast the number grew. A 60 Minutes investigation revealed that Oklahoma’s biggest industry, Oil and Gas production, is the likely culprit. Why? Because when oil is pumped out of the ground, wastewater comes with it. A lot of wastewater. Billion of gallons of the stuff. So, rather than put the state under water, industry pumps all that wastewater back deep into the ground where it seeps into and around the faults and techtonic plates causing plate shifting which results in all the earthquakes.

A 2015 earthquake study from Stanford University reported:

“Stanford geophysicists have identified the triggering mechanism responsible for the recent spike of earthquakes in parts of Oklahoma – a crucial first step in eventually stopping them,” wrote Ker Than for the Stanford Review.

“In a new study published in the June 19 issue of the journal Science Advances, Stanford Professor Mark Zoback and doctoral student Rall Walsh show that the state’s rising number of earthquakes coincided with dramatic increases in the disposal of salty wastewater into the Arbuckle formation, a 7,000-foot-deep sedimentary formation under Oklahoma.”

As I write this, the U. S. Geological Survey reports a 3.8 magnitude quake hit about 28 miles northeast of Oklahoma City on Sunday. And for good measure, two other slightly less severe quakes struck within eight hours earlier than the 3.8 quake.

On the metaphorical side, a different kind of earthquake, a political one. And by that I mean the abrupt turnaround of Oklahoma’s Governor Mary Fallon and the Republican controlled legislature regarding adopting Obamacare. Seems the state is nearly bankrupt in terms of funding health care. Hospitals and nursing homes face closure. It is a crisis of monumental proportion. But wait – there’s the Obamacare cavalry coming over the crest of the hill! Politicians now realize that federal funding for Medicaid expansion (Governor Fallos says it’s not an “expansion;” it’s a “realignment.”) looks like a pretty good port in the storm. Naturally, critics are lining up to decry the move, but the legislature appears to be coming around to it.

Who knew? Perhaps when next I look out my 3rd story window pigs will be flying by.

The AI Robotic Tsunami: Coming To A Workplace Near You!

Wednesday, August 26th, 2015

In 2013, Oxford professors Carl Frey and Michael Osborne published what became a highly read and highly cited study suggesting that machines could replace 47% of America’s jobs over the next 25 years. To say that they got the business world’s attention is a little bit like saying Ted Williams was a pretty good ballplayer.

The study, which examined more than 700 US occupations, found that jobs in transportation, logistics, and administrative and office work are at “high risk” for automation. “We identified several key bottlenecks currently preventing occupations being automated,” said Dr. Osborne when the study was released. “As big data helps to overcome these obstacles, a great number of jobs will be put at risk.”

Consider transportation. As of July 17, 2015, more than 20 Google self-driving cars have logged more than 1.9 million miles around California streets and have yet to cause an accident, although they’ve been hit 14 times by other cars, 11 of those hits being rearenders. So, how long do you think it will be before the transportation industry latches onto the self-driving phenomenon as a way to cut costs and increase productivity?

And logistics? Even now, Amazon and other retailers are flying drones around their warehouses delivering material for shipment, work that, before Dronedom, actual human beings performed, albeit more slowly and, every once in a while, with a bit of breakage.

And can we ignore IBM’s Watson, or Rethink Robotic’s Baxter (The AI parents just have to give their artificially intelligent children human names, don’t they?)?

The productivity increase is awesome, indeed. But the trade-off is a human job.

Of course, someone has to keep the drones flying. And someone has to keep Google’s cars humming along. This is a point the good Drs. Frey and Osborne did not examine deeply in their 2013 paper- that as jobs are eliminated due to automation, other jobs, more complex in most cases, will be created. This from the paper:

Our findings imply that as technology races ahead, low-skilled workers will move to tasks that are not susceptible to computerization – i.e., tasks that require creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills.

But, hang on a minute. Just when we begin to think that Fritz Lang’s “Metropolis” is a’comin round the corner like an out-of-control, self-driving 18-wheeler, Forrester Research released yesterday The Future of Jobs, 2025: Working Side-By-Side With Robots (the study may be purchased from Forrester for $499.00). Authored by Forrester analyst J. P. Gownder, the paper only looks out ten years, compared to Frey and Osborne’s 25. Even so, Gownder’s prognosis is nowhere as bleak as the Oxfordians’. They postulate a total job loss of 71 million. Gownder, using government data and many interviews with business execs, academics and pundits, suggests a net job loss of 9.1 million, or 7% of the workforce.  Where I come from, J. P., that’s a lot of jobs, but I take your point.

Notwithstanding the competing research, what we can say is that big change is not coming; it’s already here. This is an industrial era evolution. There have been many before. Remember that before the automobile, there was a thriving market for buggy whips.

This is one of the topics I’ll be covering on Thursday, October 29, in my Keynote Address to the Idaho Industrial Commission’s 2015 Annual Seminar on Workers’ Compensation. I’ll be discussing how artificial intelligence, along with two other emerging employment issues, is impacting workers’ compensation and how smart employers can deal with it successfully.

Meanwhile, here’s a little something for workers who awaken one day to find their newest work partner is no longer Homo Sapiens, but rather Ratus Robotus.

Workers who adjust survive.
Many of them even thrive.

Employee Misclassification: The Beat Goes On And On And On And…

Wednesday, July 8th, 2015

Bill Clinton used to say that (fill in the blank) would last “until the last dog dies.” Well, friends, today’s topic is all about a dog that won’t die, absolutely refuses to die, will outlive us all, cannot be killed. You get the point.

Eleven years ago (I almost feel like writing “in a galaxy far away”), the Insider started to track the illegal practice of misclassifying employees. We found that, while it was almost ubiquitous in the construction industry, its tentacles reached into other industries as well. We saw it as widespread right in our backyard of Massachusetts. We found a 2005 paper addressing the issue in the Maine construction industry published by the Labor and Worklife Program, Harvard Law School and the Harvard School of Public Health. We conducted employer seminars on it in many states.

At the time, we thought it was a pretty egregious practice that would be hard for state Attorneys General to ignore, so it would probably get fixed lickety split. We were half right. It was egregious, and Ags from the majority of states published stern regulations, as did state Departments of Insurance. But “fixed?” Nope.

Then, in 2005, a national class-action lawsuit with hundreds of plaintiffs from 30 states was filed against FedEx Ground alleging that workers were misclassified as independent contractors. This was mother’s milk to us. We had our bogeyman, and his name was Fedex. Since then, we’ve written about this Dorian Grey issue ten times. Here’s an example from 2006

FedEx loses contractor battle in Mass – Last year, my colleague Jon Coppelman blogged that FedEx should beware of Massachusetts when calling drivers “independent contractors.” Last week, the Massachusetts Department of Workforce Development ruled that a FedEx ground driver was not an independent contractor, and was therefore illegally denied unemployment benefits. Of course, this opens a can of worms about the denial of other statutory benefits, like workers comp. This is not the end of the lawsuits by any means. FedEx faces ongoing challenges in multiple states. The moral of the story: if you work with independent contractors, be sure they meet state and federal criteria to qualify as such.

Fast forward to now. Specifically, to Wall Street Journal writer Laura Weber’s 30 June story “Bosses Reclassify Workers To Cut Costs.” Ms. Weber’s story manages to be both objective reporting and poignant at the same time. Here’s an exccerpt:

Employers have long shifted work from employees to independent contractors, often relabeling the workers and slightly altering the conditions of their work, court documents and settlements indicate. Now, businesses are turning to other kinds of employment relationships, such as setting up workers as franchisees or owners of limited liability companies, which helps to shield businesses from tax and labor statutes.

In response, some state and federal agencies are aggressively clamping down on such arrangements, passing local legislation, filing briefs in workers’ own lawsuits, and closely tracking the spread of what they see as questionable employment models.

All this is happening against the backdrop of a broader shifting of risk from employers to workers, who shoulder an increasing share of responsibility for everything from health-insurance premiums to retirement income to job security. Alleged misclassification of workers has been one of the primary battlegrounds of this shift, leading to high-profile lawsuits against Uber Technologies Inc. and FedEx Corp., among others. Both have recently lost or settled big cases. Uber is appealing one decision, and FedEx settled in California for $228 million but is continuing to challenge classification lawsuits in other states.

Today I’m an employee; tomorrow I’m an Independent Contractor; the next day a Franchisee, or, oh, I don’t know, CEO of my own one-person LLC. Not only will the dog not die, his bark is really loud.

Very smart people are cooking up these schemes. I ask you – Do you think they are:

  • Bettering the lives of America’s workers?
  • Enhancing American productivity?
  • Propelling more workers into the ranks of the dwindling middle class?
  • Growing shareholder value?

I’d like to know what you think. Write me at tomlynch@lynchryan.com.

Hospital Medicare Charges: You Don’t Always Get What You Want

Monday, June 8th, 2015

In early June of this year, the Centers for Medicare and Medicaid Services (CMS) let loose a treasure trove of data. One data set lists inpatient charges of 3,000 hospitals for the 100 most frequently billed diagnoses of 2013. The differences between what the hospitals billed and what Medicare paid are eye-popping, as are the differences between what hospitals within just a few miles of each other charged.

The inpatient data shows Medicare paid about $62 billion to cover more than 7 million discharges. Our good friends at Modern Healthcare have analyzed the data. This, from Modern Healthcare’s Bob Herman:

Hospitals have been under intense scrutiny for their billing practices, often triggered by extremely high charges—or sticker prices—for common procedures. Consumer groups and patient advocates argue hospital pricing is shrouded in secrecy, which has put patients on the hook for costly bills. But hospitals have said the listed charges are irrelevant because they only serve as a starting point for negotiations with insurers and that patients rarely, if ever, pay those prices.

The CMS data is shining a light on the process. The agency has now released data from 2011, 2012 and 2013. Charges for various inpatient and outpatient procedures differed significantly again in 2013 as they did in prior years. In many instances, charges fluctuated greatly among hospitals in the same region.

A Modern Healthcare analysis of the inpatient payment data shows Philadelphia, Los Angeles and Newark, N.J., had the largest gulfs in charges between the top and bottom hospitals. For example, in Philadelphia, the average difference in average hospital charges across all procedures was $123,847. In Los Angeles—an area rife with academic medical centers such as Cedars-Sinai Medical Center—the average difference between the highest-charging hospital and the lowest-charging hospital was about $112,000.

Did you catch the part about the listed charges being irrelevant, because they’re only starting points for negotiations? Reminds me of the last time I bought a car.

You might be tempted to say, “That’s crazy! Why do hospitals do that?” Let me answer with a little story.

A few years ago, I was a Trustee at a major teaching hospital in Massachusetts, a tertiary care facility, one of the biggies. At one Board meeting early on in my trusteeship I asked the CEO how the hospital was compensated for uninsured people who were indigent. His answer? “We charge them the moon.” Note to reader: he’s talking about the indigent patient, here. “Then, when the state’s uncompensated care pool gets around to paying us, we’ll get a lot more than if we just charged them what the procedure cost, in which case we’d get a lot less than what the procedure cost.” I never forgot that lesson in hospital economics.

So, you see, when hospitals say their charges are “starting points,” they’re telling the truth. And that is one spooky scary example of what a first-class horrendoma the American healthcare system (if you can call it that) has become.

New York Self Insurance: Chicken Stew

Tuesday, May 28th, 2013

The folks at Murray Bresky Consultants are just trying to scratch out a living by raising chickens – not just any chickens, but free range chickens that are “happy and healthy.” Their signature breed is “fed an all-natural and all-vegetable diet that, combined with plenty of exercise, makes our birds the leanest on the market. The leisurely lifestyle eliminates the need for antibiotics to prevent diseases commonly found in chickens as a result of stress and confined living conditions. Minimally processed, without the use of preservatives or other artificial ingredients, Murray’s Certified Humane Chicken is truly all chicken.”
Unfortunately for the company, they secured workers comp insurance through New York Compensation Managers (NYCM), the now defunct operator of a dozen self-insurance groups in New York. NYCM claimed to offer favorable rates, strict underwriting standards and exemplary claims services. They ended up with egg on their face with their inadequate rates, suspect underwriting and rampant under-reserving of claims. In retrospect, the operation ran around like a chicken with its head cut off. By the time the problems emerged (in 2006), it was too late to shake a feather and correct the problems.
Following the SIG’s failure, Murray Bresky Associates was hit with a $1.2 million assessment to make up their share of the SIG’s deficit. That ain’t chicken feed.
A Game of Chicken
Murray Bresky is not chickening out of a fight. Indeed, the chickens have come home to roost in the form of a lawsuit filed against NYCM and its board of trustees. The lawsuit seeks to recover the $1.2 million and then some, alleging breach of contract and breach of fiduciary duty. The case worked its way up to the NY Supreme Court, Appellate Division, where the motion by the defendents to dismiss the lawsuit was, for the most part, dismissed.
Now the defendents are walking on egg shells, facing the prospect of personal liability for the failures of the SIG. Where they once feathered their nests with the proceeds of the operation, their financial security has flown the coop. This is a legal mess perhaps best described by the late Lyndon Baines Johnson: “Boys, I may not know much, but I know chicken poop from chicken salad.”
Roles and Irresponsibilities
One of the former trustees of the SIG is squawking that he was not aware that he was, in fact, a trustee. He may have signed off on a few trustee documents, he may have performed some of the functions of a trustee, but he insists that he had no memory of being appointed. He insisted that he was not a bad egg and claimed that he had no place in the pecking order. The court, however, ruled otherwise.
As the saying goes, you have to break eggs to make an omelette. Quite a few more eggs will be broken before this particular concoction is served up. Hard-boiled attorneys will parse the details to figure out who, if anyone, owes Murray Bresky Consultants and exactly how much they owe.
Pecking Orders
The courts now rule the roost. They have upheld Murray Bresky’s right to sue, with the exception of some actions that are time-barred. There may well be a sunny side up in the chicken company’s quest for justice. We look forward to the final resolution of this stew, the chicken scratch of a judge’s signature that will put a final number on the liability of an insurance operation that flaps my wattles (ie., annoys me).
Here’s a little unsolicited advice to Murray Bresky Consultants: don’t count your chickens before they hatch. This one has a long way to go before the company can feather its nest with the proceeds of a complex litigation. In the meantime, their free range chickens have the run of the coop, enjoying their cage-free, stress-free lives right up to the very end. Bon appetite!

Insourcing: A positive trend for U.S. manufacturing

Tuesday, December 4th, 2012

For decades now, it’s been almost axiomatic: manufacturing is better offshored. Conventional wisdom, talking heads and campaigning politicians alike would have you believe American manufacturing is dead, killed off by greedy unions, high taxes, and an onerous regulatory climate. China, Taiwan, Mexico, and other emerging economies offered a seemingly ideal business climate without most of these pesky problems.
But not so fast. Paraphrasing the great Mark Twain, reports of manufacturing’s death may be greatly exaggerated. Some manufacturers are questioning the wisdom the offshoring trend and, in a move that might be called “repatriation,” some big name companies are re-establishing domestic operations here in the U.S. or simply making the strategic decision to keep operations here.
This month’s Atlantic Magazine features a must-read article by Charles Fishman — The Insourcing Boom — which talks about how General Electric is moving much of its appliance-manufacturing operations back home to Appliance Park in Louisville, Kentucky.
In the late 1960s and early 1970s, Appliance Park was the quintessential American manufacturing operation, employing 23,000 at its peak in 1973. But after years of offshoring jobs, the site became a ghost town. In 2011, the Park’s employee population was down to 1,863.
But this year, something interesting began happening. In February, the first new assembly line at Appliance Park in 55 years began making water heaters – a product line that had been previously made in China. A team of employees eliminated parts, reduced material cost by 25%, cut the work hours necessary to assemble the water heater from 10 hours in China to two hours in Louisville. It beat the “China price” price by nearly 20%. Plus, it greatly improved time to market – cutting factory to warehouse time literally from weeks to minutes.
Buoyed by this success, a second assembly line for high-tech refrigerators was launched about a month later. Plans are in the works to open a third building and a third line to produce dishwashers in early 2013. CEO Jeffrey Immelt, commenting in Harvard Business Review, said that outsourcing is “quickly becoming mostly outdated as a business model for GE Appliances.”
Fishman cites Lou Lenzi, head of design for all GE appliances, in the following excerpt:

“What we had wrong was the idea that anybody can screw together a dishwasher,” says Lenzi. “We thought, ‘We’ll do the engineering, we’ll do the marketing, and the manufacturing becomes a black box.’ But there is an inherent understanding that moves out when you move the manufacturing out. And you never get it back.”

It happens slowly. When you first send the toaster or the water heater to an overseas factory, you know how it’s made. You were just making it–yesterday, last month, last quarter. But as products change, as technologies evolve, as years pass, as you change factories to chase lower labor costs, the gap between the people imagining the products and the people making them becomes as wide as the Pacific.

What is only now dawning on the smart American companies, says Lenzi, is that when you outsource the making of the products, “your whole business goes with the outsourcing.” Which raises a troubling but also thrilling prospect: the offshoring rush of the past decade or more–one of the signature economic events of our times–may have been a mistake.

GE is planning to bring about 75% of its $5 billion appliance business back to the U.S. And it is not alone – Fishman cites Whirlpool, Otis, and Wham-O as a few examples of other manufacturers that are bringing operations back from China and Mexico to Ohio, South Carolina, and California. There are other reports of this trend too. In Everything You Need to Know About Insourcing from the White House Blog, Matt Compton says that large manufacturers like Ford and Caterpillar have announced large investments in U.S. facilities – expansions that were previously aimed at facilities in Mexico, China, or Japan. The post names other examples of smaller manufacturers and even service centers that are reinvesting domestically. it also provides these statistics:

  • Business investment is up, growing by 18 percent since the end of 2009
  • We’re exporting more goods and services to the rest of the world. As of October, American exports totaled $2 trillion — an increase of almost 32 percent above the level in 2009
  • Perhaps most importantly, the manufacturing sector is recovering faster than the rest of the economy. Through the course of the past two years, the economy has added 334,000 manufacturing job, and that’s the strongest two-year period of manufacturing growth since the 1990s.

Lisa Harrington also examines this trend in an article in Inbound Logisitics: Is U.S. Manufacturing Coming Back?. She cites further examples of work that was created in or brought back to the U.S. She explores some of the strategic decisions that need to be factored in to where production occurs. The article includes a checklist, Nine Steps to Choosing a Manufacturing Location from Stephen Rogers, author of The Supply Chain Advantage: How to Link Suppliers to Your Organization’s Corporate Strategy.
The article notes that decisions about location must take a total cost perspective. Direct costs were often factored into decisions, while other factors may have been given little consideration. One example:

Labor cost savings are just one factor driving companies to reconsider manufacturing in the United States. To compete more effectively, a growing number of manufacturers are considering shifting operations closer to customers to provide better service, reduce total costs, and enable accelerated growth, according to a survey of 287 manufacturing companies, conducted by market research firm Accenture.

Companies are realizing that the physical location of supply and manufacturing operations can have a significant impact on overall competitiveness. An unbalanced network–where regional supply is physically separated from regional demand–makes it difficult for the organization to deliver on the very customer expectations that drive growth.

Not a return to the days of yore
Fishman notes that such “insourcing” will not suit all companies – basic work processes, such as mass market clothing manufacturers, will likely never return. Relocation in the U.S. seems to suit companies with high-tech and complex manufacturing process and products that require continuous innovation and improvements.
He cautions that American manufacturing will never return to its prior peak, and he describes various ways that things have changed: “Back in the ’60s, Appliance Park was turning out 250,000 appliances a month. The assembly lines there today are turning out almost as many–with at most one-third of the workers.” But he cites the “multiplier effect” that the presence of a large manufacturer can have. We saw the multiplier effect in action when the auto industry was in risk – it wasn’t just the auto jobs that were threatened, but entire communities – including businesses as diverse as parts suppliers to luncheon delis.
Related
Manufacturing May Be Coming Back to the U.S., Long-Term – an article in Forbes by Robert McCutcheon, the U.S. industrial products leader of PwC.
The Reshoring Initiative – founded by Harry Moser in 2010, an industry-led effort to bring manufacturing jobs back to the United States. The initiative works with U.S. manufacturers to help them recognize their profit potential as well as the critical role they play in strengthening the economy by utilizing local sourcing and production.
M.I.T. Forum for Supply Chain Innovation
a community of academics and industry members whose support allows Forum researchers to provide customer-focused solutions to design and manage the new supply chain.
Investing in America: Building an Economy That Lasts – White House report

Aging Workers, Limited English, Limited Skills

Tuesday, November 20th, 2012

When a laborer with limited English is disabled from physical work, is he obligated to increase his employability by learning English? This interesting question emerged in the case of Enrique Gutierrez, a 48 year old welder who worked at Merivic, a company specializing in grain-related processing. Gutierrez came to the United States at age 14, but in his 34 years in the country never learned to speak or write English. While at work, Gutierrez fell about 10 feet onto a steel table, injuring his shoulder and wrist. He underwent two surgeries, worked for a while as a one-armed welder, and then was let go. His post-injury functioning was significantly limited, including difficulty lifting and carrying, gripping and grasping, and reaching.
When the workers comp commission found him permanently and totally disabled, the employer appealed and the case reached the Iowa Court of Appeals, where the finding of compensability was upheld. Up until 2007, Iowa courts routinely lowered the indemnity paid to limited English speaking workers, on the theory that a language disability was something within the power of the worker to correct. A case entitled Lovic v. Construction put an end to that practice. The reasoning in this decision is worth quoting:

Unfortunately, this line of cases [involving reduced indemnity]
overlooked the fact that the employers who hired these workers should
have reasonably anticipated that an injury which limits an ability to return
to manual labor work would have far more devastating consequences
upon non-English speaking workers than English speaking workers.
Oftentimes, this agency has penalized non-English speaking workers
despite the knowledge that the employers actually recruited such workers
because they were willing to work for less wages.

In other words, you get what you pay for: limited English speaking workers are willing to work for less, so the employer benefits from this potential “disability.” The ruling goes on to attack the rationale for the reduced wages:

What has been troublesome to many, including myself, is that this
agency has never similarly treated non-immigrant workers for failing to
learn other skills. Defendants would certainly have trouble citing any
agency or court precedent in the workers’ compensation arena where an
industrial award for an English speaking worker was lowered because the
injured worker, before the injury, failed to anticipate he would suffer a
devastating work injury and failed to obtain a type of education before the
injury that would mitigate the effects of such an injury.
We simply cannot assume that claimant was capable of such training or that such classes are generally successful in leading to employment where fluent English is required . . . .

By reiterating the logic of the pre-Lovic court, Merivic was attacking settled – albeit recently settled – law. The Appeals Court rejected this “collateral attack” on Lovic and upheld the permanent total award, and in doing stumbled upon yet another conundrum: that of the older worker. The court found that once a laborer goes beyond age 47, his ability to perform physically demanding work comes into question. A vocational expert retained by Gutierrez described the 48 year old worker as “approaching advanced age.” The Judge noted that “We have previously held the age of forty-seven is a factor that the commissioner may consider in finding industrial disability.” The expert also noted that Gutierrez’s entire career involved “limited education” and a work history limited to physically demanding jobs, which his permanent work restrictions now prevented him from performing.
The Very Big Picture
Our Colleague Peter Rousmaniere provides a valuable perspective on aging manual workers. In his Risk & Insurance article “The Age Trap” he points out that 55+ workers comprised 16.7 percent of the workforce in 2010, a number projected to increase to 22.7 percent by 2020. In contrast to Enrique Gutierrez, most aging workers are not injured and eligible for workers comp; to be sure, their bodies are wearing down and they are confronted with diminishing strength and balance, even as they desperately try to hold onto their places in the workforce. Rousmaniere suggests that employers develop a renewed focus on prevention, one that has been adapted to the realities of the aging worker. After all, these workers are valued for the skill and experience they bring to the work, even as their work capacities diminish.
The Big picture here – and it is a very big picture indeed – is the dilemma of aging workers who perform physically demanding jobs and who have little education and virtually no transferable skills. There are millions of such workers, some are immigrants, while many others are native born. Most have zero prospects for a secure retirement, even as Congress contemplates pushing social security retirement even further into the future.
Whether they like their jobs or not, aging workers see themselves working out of necessity well into the their 60s, 70s and even 80s. As their bodies inevitably wear out, as their injuries (cumulative and sudden) lead a number of them into workers comp courts across the country, judges will be confronted with the same dilemma that faced the appeals court in Iowa: for older workers with no transferable skills, workers comp becomes the retirement plan of choice for those with no retirement plans and no way to continue working.

Sharecroppers at the Mall

Wednesday, November 7th, 2012

As someone who equates shopping malls with one of the lower circles of hell in Dante’s Inferno, I avoid them whenever possible. I find myself suffering along with the retail sales force: understaffed, overworked and underpaid. Steven Greenhouse writes in the New York Times that not only are these workers underpaid, they can be the victims of sophisticated software scheduling programs (Kronos or Dayforce, to name just two) that can easily make the ordinary demands of personal life spin out of control.
There are about 18.6 million retail jobs, 70 percent of which used to be full time. In the relentless effort to reduce costs, 70 percent of retail jobs are now part time. Part-time workers often endure irregular schedules, with hours tied to customer flow. They may be called in for relatively short shifts – a couple of hours at peak times – and then sent home. If workers are unavailable to heed such calls, the work goes to someone else – and the hesitant worker falls further down the list of preferred staff.
Here’s one example of “just-in-time” staffing: Jamba Juice tracks the weather forecast. When hot weather is on the horizon, extra workers are called in. When the heat spell breaks, fewer workers are scheduled. Being on call for a relatively low paying job might wreak havoc on one’s personal life, but it sure helps the company’s bottom line: by scheduling the workforce in 15 minute micro intervals, companies might save as much as 4 to 5 percent in labor costs per year.
Profits in Numbers
While retailers have the option of increasing the hours of their part-timers, they would rather add more bodies to the workforce. They can pay these folks less ($10.80 average for part time versus $17.18 for full time) and they can avoid the issue of benefits. About 30 percent of part-timers would prefer to work full time, but few are given the opportunity. Scheduling programs can quickly scan available workers and pull in the ones with the lowest hourly rates. Isn’t that cool?! You could easily ensure that only one relatively senior worker is present at any given shift.
It may seem harsh to refer to this marginally employed workforce as sharecroppers, but the image comes from an industry consultant, who notes that companies benefit from using many part-timers as opposed to fewer full-timers.

It’s almost like sharecropping — if you have a lot of farmers with small plots of land, they work very hard to produce in that limited amount of land. Many part-time workers feel a real competition to work hard during their limited hours because they want to impress managers to give them more hours.

Of course, they rarely get those new hours, because their employers prefer to limit any given worker’s time on the job – rather like the greyhounds who chase the mechanical rabbit around the racetrack.
Keep ’em Fresh, Keep ’em Moving
A Jamba Juice district manager waxes poetically on the advantages of part-timers:
“You don’t want to work your team members for eight-hour shifts. By the time they get to the second half of their shift, they don’t have the same energy and enthusiasm. We like to schedule people around four- to five-hour shifts so you can get the best out of them during that time.”
During my increasingly infrequent mall visits, I find myself brooding on the difficult lives of these exploited workers. I have become infinitely more patient with them, no longer blaming them for not knowing the stock or being unable to answer a simple question. They are simply tilling the barren soil of their last-ditch employment, hoping that a better job, a career even, might be part of their murky future..

Sugar: Bad for Consumers, Deadly for Workers?

Sunday, October 14th, 2012

It would be pretty hard to avoid the news about sugar: it’s bad for us. Diets high in sugar contribute mightily to the nation’s burgeoning problems of obesity and diabetes and may even be a factor in dementia. But sugar in its crop form is also proving to be deadly. The cause and effect, however, is as murky as a cloudy day in the rainforest.
Will Shorr has written a remarkable, hands-on article in the Guardian, examining the high rates of chronic kidney disease (CKD) among the workers who grow and harvest sugar cane in Central America. CKD is the second leading killer of men in El Salvador.
Why are sugar cane workers succumbing to kidney disease? Is it the working conditions? Is it the pesticides? Is it the diet of the workers? Fingers are pointing in a number of directions, and by the time the truth is sorted out, we may well find a toxic trail that includes of all three factors.
Dehydration
Nicaragua Sugar Estates, one of Central America’s largest plantations, has conducted its own internal studies, one of which identified one potential factor in the disease: “strenuous labour with exposure to high environmental temperatures without an adequate hydration program.” .Nonetheless, a company spokesman denies the connection: “We’re convinced that we have nothing to do with kidney disease. Our productive practices do not generate and are not causal factors for CKD.”
But researchers in the US have connected CKD to heat stress and dehydration. A standard day for an El Salvadorian sugar worker lasts between four and five hours, with double shifts during the summer planting season, when temperatures top out at 104 degrees.
Shorr quotes Héctor García, a 33 year old with stage-two kidney failure: “It’s very hot; we suffer. People sometimes collapse. More often they vomit, especially when the heat is worse. They do two shifts to earn more money.” Another worker, 40 years old and close to death with stage five CKD, reported the same symptoms, compounded by the limited resources in his home: “When I come home, I feel surrendered. Sick. Headache. I can’t shower because the water [from the roof-mounted tank] is too hot.” The image of the hand-rigged shower, full of very hot water, epitomizes the wretched living conditions of the workers.
Compounding the problem, most CKD sufferers do not even know they are ill: the disease is asymptomatic until its last, most deadly stages. Even when they feel unwell, many workers go into denial – they feel helpless, as they cannot afford the medication or the recommended diet of fresh vegetables and chicken breast. Dialysis – the last hope of the ill – is often avoided, because most of the workers who go on it end up dead anyway, so it appears to their co-workers that dialysis causes the death.
Chemicals
Researchers have found rates of CKD in cane cutters and seed cutters – the most strenuous jobs – to be higher than in pesticide applicators, who have greater exposure to agrochemicals. This seems to indicate that the pesticides are not a significant factor. But this conclusion may be premature.
Five chemicals are used in the cultivation of sugar cane: amine, terbutryn, pendimethalin, 2,4-D and atrazine. Shorr sent the chemical recipe for the yellow potion he observed being sprayed on the crops to Professor Andrew Watterson of the University of Stirling – an authority on agrochemicals and health. They were all herbicides, he noted. Watterson came up with a litany of potential problems:

Atrazine can cause kidney damage at high levels; acute exposure to 2.4-D can cause chronic kidney damage; pendimethalin is “harmful through skin contact and inhalation”; in lab tests, long-term feeding of terbutryn to rats caused kidney damage. None of them are acutely toxic, but this combination, plus the tropical climate, could worsen their effects.

On the prevention side, sprayers are supposed to avoid contact with skin; to wear face shields, respiratory protection, rubber boots and specialist coveralls. We can only surmise that such protective equipment, while technically useful, would be difficult to use in 100 degree weather. On the other hand, assuming the sprayers are protected, other workers do not wear protection and may thus experience greater exposures to the chemicals.
Sugar in the Diet?
Shorr concludes his article with a shocking new study that points in yet another direction. Richard Johnson, of the University of Colorado’s Division of Renal Diseases and Hypertension, thinks the problem might have its genesis in a mechanism that his team discovered in rats. Johnson speculates that if dehydrated workers with already sugary kidneys are rehydrating with soft drinks or fruit juice, they may experience a potentially explosive fructose load. He adds that “it’s not proven, so we don’t want to get ahead of the gun here [rather unfortunate metaphor].” The research has not as-yet been published. But Johnson goes on to say that the experimental data is quite compelling, and it “could explain what’s going on.”
It would truly be ironic if the cane field workers were dying from kidney failure in part because they use sugary soft drinks to rehydrate. “Buy the world a Coke” indeed!
Collateral Damage?
While it is too early to draw definitive conclusions, the Guardian article identifies at least three converging factors in the high CKD rates among field workers: extremely high heat compounded by hydration problems; a mix of potentially harmful pesticides; and an unhealthy diet too full of sweetened beverages. Add the impoverished living conditions of the workers – and marginal medical care – and you have all the makings of an abbreviated lifespan.
The US gets 23% of the its raw sugar from Central America; the European Union spends more than €4.7m on this import. Sugar is El Salvador’s second-biggest export. This is big business. With so much money at stake, the dying workers are little more than collateral damage. It appears that what they really need is an ample supply of clear, cool water, but such a simple remedy, alas, is nowhere in sight.

Lessons from Ernest Shackleton’s Medical Kit

Tuesday, October 2nd, 2012
“Men wanted for hazardous journey. Low wages, bitter cold, long hours of complete darkness. Safe return doubtful. Honour and recognition in event of success.”

That is the ad that was allegedly posted to attract crew to Sir Ernest Shackelton’s Arctic Expedition on the Nimrod in 1907-09. There’s been a lot written about this adventure to one of the then-most remote corners of the earth. It is still among the most remote wilderness locations today – contemporary workers who agree to stint at Antarctic bases have to prepare for a long haul since some locations only afford a two to three month window when bases are reachable.
A few years ago, when Gavin Francis accepted the position as a medical doctor ‘wintering’ at Halley Base, a profoundly isolated research station on the Caird Coast of Antarctica, he had to plan accordingly since the base is unreachable for ten months of the year. He’s written a pretty fascinating article in Granta magazine comparing the preparations he took in terms of supplying a medical kit with the list of supplies in Shackleton’s Medical Kit.

“In the well-stocked polar section of the little base library I unearthed the packing list for Shackleton’s medical kit – the drugs and dressings he took on the sledge trips of his Nimrod Expedition of 1907, the one that turned back only ninety-seven miles from the South Pole. It added up to a weight of about three kilos, less than a sixth of the modern kit, and to my technomedical mind read more like a witch’s grimoire than the best medical advice of just a century ago.”

It’s a pretty fascinating read, one that we think might tickle the fancy of occupational physicians. We enjoyed the author’s observations about how the practice of medicine has changed, particularly in regards to the challenges of caring for a workforce in a remote location.
Chances are, no matter how remote your workplace, planning for employee health and safety program doesn’t have quite the same extremes in parameters. But one thing remains true: advance planning can still mean the difference between life and death; knowing how to respond quickly can be the difference between a relatively minor event and a life-changing tragedy.
What’s the status of your workplace first aid kit?
In Fundamentals of a Workplace First-Aid Program (PDF), OSHA suggests:

“Employers should make an effort to obtain estimates of EMS response times for all permanent and temporary locations and for all times of the day and night at which they have workers on duty, and they should use that information when planning their first-aid program. When developing a workplace first-aid program, consultation
with the local fire and rescue service or emergency medical professionals may be helpful for response time information and other program issues.”

The booklet outlines OSHA Requirements, recommended First-Aid Supplies, including Automated External Defibrillators, guidance on First-Aid Courses and Elements of a First-Aid Training Program. In addition to evaluating their own organization’s risk factors, employers should be aware of any state laws governing workplace first aid.
ANSI/ISEA Z308.1-2009 is the current minimum performance requirements for first aid kits and their supplies that are intended for use in various work environments. You can purchase these through the American National Standards Institute (ANSI) or the International Safety Equipment Association (ISEA). If you want to save a few dollars, you may be able to find a free copy, such as the one we found minimum contents list from the Minnesota Department of Labor and Industry.
Automated external defibrillators (AEDs) programs are an increasingly common component in a workplace health and safety program to address sudden cardiac arrest. These programs require some medical guidance and training to put in place.
Arguably, one of the most parts of your emergency planning should be to prepare your employees and your supervisors about what to do in the case of a medical emergency. Put your policies and protocols writing and communicate them to your employees frequently. Don’t forget to include solitary and remote workers in your emergency planning.