With Oregon school finances tight, Democrats and unions push to raise costs

Oregon Democrats talk out of both sides of their mouth when addressing school finances.

While arguing that our schools desperately need more money and advocating for Measure 97, which would impose huge business tax increases to cover the bill, they’ve been working to increase school costs.

It all has to do with unemployment insurance.

unemploymentapplication_media-week_flickr1

School districts, not their employees, pay for unemployment insurance benefits. Under ordinary circumstances, school employees released for summer break, customary vacation periods or holiday recesses aren’t considered unemployed and aren’t eligible for unemployment compensation benefits.

But leave it to the Democrats, allied with their union supporters, to try to chip away at these restrictions and pass along the added costs to Oregon schools.

Democrats made a run at changing the law in 2015 when State Senator Michael Dembrow (D-District 23), who receives substantial campaign contributions from unions, introduced SB 470.

michaeldembrow

Oregon State Senator Michael Dembrow

At the time, school employees who performed services other than instruction, research or administration did not qualify for unemployment insurance benefits during school breaks. A committee amendment which replaced the original language of SB 470 would have changed that, permitting school employees who left their jobs for good cause to receive unemployment insurance benefits.

The bill was still in committee upon adjournment, so it died.

But the Democrats persisted.

Earlier this year, Senator Dembrow introduced SB 1534, which again proposed permitting school employees who leave their jobs for good cause to receive unemployment insurance benefits during summer and school breaks.

Tricia Smith of the Oregon School Employees Association testified before the Senate Committee on Workforce and General Government that school employees who could be eligible for benefits under the bill are in non-instructional positions such as secretaries, food service workers, custodians, school bus drivers and others.

schoolbusportland

Like the proverbial camel’s nose under the tent, the law was likely the first salvo in a long-range union attempt to make teachers eligible for unemployment compensation during summer and school breaks, too.

I was curious how much this expanded unemployment compensation allowance had cost school districts so far. So I asked the Oregon Employment Department to tell me how many people had collected unemployment insurance benefits under the new standards, their job categories and the amount of unemployment insurance benefits paid out to them.

Fortunately, I learned that the Democrat’s misguided attempt to burden Oregon schools with higher unemployment compensation costs has been crushed.

After passage of the legislation, the Employment Department received notice from the U. S. Department of Labor that SB 1534 does not conform with federal guidelines to administer the Unemployment Insurance program.

According to Craig Spivey, a Public Information Officer with the Oregon Employment Department, “SB 1534 included a provision that if the changes to Oregon statute fail to conform to federal guidelines, they would not go into effect. Therefore SB 1534 is not in effect at this time and no unemployment claims have been filed” under the more expansive criteria in the legislation.”

Whew! Oregon school districts dodged a bullet on this one.

 

The emerging 1099 economy: the new sweatshop

If your total income in 2013 put you in the top 40 percent of Americans, you’ve likely gotten richer over the past 20 years, according to the Federal Reserve. If you are anybody else, your income, after adjusting for inflation, has probably gone down.

This trend will likely continue if the independent contractor business model enabled by technology multiplies. The winners will be the educated, specialized elite with full-time jobs and benefits who file W-2 tax forms; the losers will be independent contractors who file 1099-MISC tax forms.

On-demand worker company TaskRabbit CEO Leah Busque told TechCrunch, a technology news website, that the company’s goal is to “revolutionize the world’s labor force.” It and similar companies relying on independent contractors are accomplishing that if you consider the revolution to be back to the future of sweatshops.

Automatons

Consider that under current law, independent contractors aren’t entitled to:

  • A minimum wage
  • Health benefits
  • Unemployment insurance
  • Retirement plans.
  • Workers’ compensation
  • Job protections

Uber and Lyft, both of which use independent contractors, are two of the best known 1099 companies, but others are sprouting like weeds. They include Homejoy (house cleaners), Handy (home cleaners and handymen), Postmates (couriers deliver goods locally), Spoonrocket (restaurant food delivery), Washio (laundry and dry-cleaning), DogVacay (pet sitting), Zirtual (personal assistants for entrepreneurs and professionals), Kitchensurfing (personal chefs) and TaskRabbit (personal tasks).

Washio allows customers to place laundry and dry-cleaning orders online and sends “ninjas” to pick up and deliver items. Washio doesn’t actually do any cleaning; it sends clothes to third party facilities. Independent contractors use their own vehicles, and cover their own costs, to go hither and yon picking up and dropping off clothes.

Online job source TaskRabbit asks people, “What can we take off your plate?” It offers “fully vetted Taskers to get the job done”, allowing the customer to “kick back and relax” and pay the bill online when the job is done. TaskRabbit makes its money by taking a 20% service fee off the payment.

TaskRabbit makes it clear that Taskers are independent contractors and that Taskrabbit is no more than “ a communications platform which enables the connection between Clients and Taskers.”

The company reinforces that message by saying it “…has no liability regarding the Service” and “…is not responsible for the performance of Users, nor does it have control over the quality, timing, legality, failure to provide, or any other aspect whatsoever of Tasks Clients, nor of the integrity, responsibility or any of the actions or omissions whatsoever of any Users.”

SherpaVentures, a venture capital firm, predicts that so-called “freelance marketplace” or “managed-service” labor models used by these companies are poised to transform industries like law, health care, and investment banking, and that fewer people will have traditional full-time or part-time jobs as a result.

According to Sherpa, “perpetual, hourly employment is often deeply inefficient for all parties involved, with the employer having to employ long-term workers for short-term needs and the worker missing the independence and productivity that come with freelancing and make workers happier.”

Futurist Thomas Frey, predicting 1099 nirvana, asserts that on-demand work will mean freedom. “…those who master the fine art of controlling their own destiny will rise to the inspiring new lifestyle category of “rogue commanders of the known universe,” he says.

A shift to independent contracting is more likely, however, to create a permanent underclass with meager, unreliable income, no benefits and few protections.

TaskRabbit CEO Busque says future work will be more flexible and “much more in the hands of what I like to call micro-entrepreneurs—people setting their own schedules, setting their own rates, saying what skills they have and what they’re good at.”

Valleywag, a Gawker Media tech blog, puts it a little differently: “If TaskRabbit Is the Future of Employment, the Employed Are Fucked”