The Hong Kong based group SACOM released a report today of a new investigation of working conditions at three Apple factories in China. The investigation uncovered extensive labor rights abuses, including extremely long work hours, employees forced to work off the clock for no pay, continuing hazards to worker safety, and verbal abuse and humiliation of workers by supervisors. The report, issued on the eve of Apple’s annual shareholder meeting, calls into question the accuracy of Apple’s claims of labor rights progress in its supply chain.

SACOM interviewed 130 workers employed at Foxlink, Pegatron and Wintek, three key suppliers of parts used in the assembly of iPhones, iPods and Macs.

Of note, the report found that poor conditions have led to turnover rates so high that the factories are resorting to the use of contracted labor on a massive scale, hiring so-called “dispatch” agencies to provide workers who are employed by the agencies, not the factories. This arrangement makes workers especially vulnerable because they enjoy few protections under Chinese labor law. SACOM found that dispatch workers comprise as much as 80% of the workforce at these factories.

The findings in the SACOM report include:

Excessively long work hours remain common. During peak production periods, workers can work up to 14 hours per day and receive only one or two days off over a period of nearly three months. Working 70-100 hours per week is common during peak periods, far in excess of what is permitted by Chinese law (49 hours) and even above the maximum allowed under Apple’s own code of conduct (60 hours).Read more

Happy Friday! Here’s what we were reading today:

• The Ph.D Bust: America’s Awful Market for Young Scientists—in 7 Charts (The Atlantic)
• Academic raises doubts about hedge fund returns (Financial Times)
• Want to Tackle Income Inequality? You Need to Go After Capital Gains (Mother Jones)
• Why our brightest female graduates are still at a disadvantage (Washington Post)

If you want to understand the high tech labor market in the United States, a good place to start might be one of these stories about a lawsuit in the U.S. District Court in California.

These stories trace the progress of legal actions against some of America’s best-known tech companies over their attempts to suppress their employees’ wages through anti-competitive “no-poaching” agreements.  The Department of Justice found evidence that Intel, Adobe Systems, Google, Apple, Pixar, and Intuit made  secret agreements not to call each others’ employees with job offers, thereby reducing job opportunities and salaries in the industry. DOJ induced the six companies to settle an anti-trust suit in 2010 with a promise not to engage in similar restraints on trade in the future. The companies paid no damages and admitted no violations of anti-trust law, but the employees who had been hurt by the practices were not satisfied.

Employees filed suit against the six companies and Lucasfilm in federal court alleging an illegal conspiracy to restrain wages and salaries and seeking damages.  When the companies tried to have the suit dismissed, the district court judge sided with the plaintiffs, and in January, according to Phys.org, Judge Lucy Koh ruled that the case should proceed to trial and that Apple CEO Tim Cook, Google Chairman Eric Schmidt and Intel chief Paul Ottelini may be questioned by plaintiffs’ attorneys about their roles in the alleged conspiracy. The trial, reportedly, will take place in November.

I recommend keeping this case in mind when it comes time to evaluate the companies’ claims that their interest in bringing skilled guestworkers to the U.S. has nothing to do with getting cheaper labor. Never mind that the H-1B visa, which ties employees to a single employer for 6 years or more, is a bigger restraint on employee mobility than a no-poaching agreement.

When President Obama and Japanese Prime Minister Abe meet on Friday, currency manipulation and Japan’s unfair trade policies must be addressed. The Yen has declined 13% in the past three months, in part because Mr. Abe has pledged to weaken monetary policy to spur growth. A weaker Yen lowers the cost of Japanese imports in the U.S. and raises the cost of U.S. exports in Japan and other countries where our products compete. While a more expansionary domestic monetary policy is an appropriate tool for a country stuck far below economic potential because of demand shortfalls, Japan has also displayed a historic pattern of intentionally lowering the value of their own currency vis-à-vis the U.S. dollar by buying U.S. denominated assets. Because the first-order effect of this direct currency manipulation is to create demand for Japan at the expense of the U.S., which is also currently starved of demand, this is not responsible policy for a country as large and important in global trade markets as Japan.

Currency manipulation is the single most important cause of growing U.S. trade deficits and Japan has a well established reputation as a currency manipulator. Japan has expressed a desire to join the proposed Trans-Pacific Partnership (TPP), a regional free-trade agreement with 10 other countries.  The TPP should include language to end currency manipulation by Japan and other trading partners.  Elimination of currency manipulation by China, Japan and other countries could create 2.2 to 4.7 million jobs, expand U.S. GDP and reduce the federal deficit, according to a recent EPI report.

The U.S. trade deficit with Japan increased from $66.4 billion in 2011 to $79.9 billion in 2012, an increase of $13.4 billion (20.2 percent).1 Growing trade deficits lead to job losses and growing unemployment or weaker growth in the United States.Read more

Jordan Weissman put together a nice series of charts in The Atlantic that help us better understand what’s at stake in the debate over tripling the number of “guest” workers admitted to the U.S. each year with college degrees and skills in science or engineering. It’s gotten harder and harder for U.S. PhDs to find work, and especially work that pays a salary that corresponds to the intellect of and investment made by these students, who are truly our best and brightest. A question members of Congress have to answer is: do we want to encourage or discourage U.S. students from pursuing these top degrees? Is NIH paying science post-docs enough? Is industry doing enough to recruit young U.S.-trained scientists? Will the Hatch-Klobuchar plan to admit 300,000 temporary, foreign high tech workers each year make matters better or worse for our young PhDs? Will the addition of as many as 1.8 million new foreign tech workers over six years crowd the U.S. labor market and depress wages?

Here’s a roundup of what we read today:

• The Wage Theft Epidemic (In These Times)
• A Chat With Mike The Mailman, Who Delivers the Mail (For Now) (The Billfold)
• Good News on Health Care Costs and the Budget (Economist’s View)
• Equipping the Fed for a Future Crisis (New York Times)
• New study badly undermines GOP position on sequester (Washington Post)
• Erskine Bowles: ‘Being far out front of the president on revenues wasn’t something I wanted to do again’ (Washington Post)

Both advocates and opponents talk a lot about how a minimum wage increase would affect Americans who are trying to find jobs. For the first time, we have insight into what job seekers themselves think about minimum-wage issues, thanks to newly-released data from the American National Election Survey.

The majority of job seekers report that raising the minimum wage to keep pace with the cost of living would be good for them personally. In fact, ten times as many job seekers report that minimum-wage increases would be good for their lives (66.5 percent) than report that it would be bad for their lives (6.5 percent). By a seven-to-one margin, they think it would be good (71.0 percent), rather than bad (10.1 percent), for America overall.

Here are the details. The data come from the American National Election Survey collected in December 2011 (ANES EGSS3 preliminary), which surveyed a nationally-representative sample of 1315 Americans including 126 job seekers. Job seekers are those currently not working and looking for work as well as those working part time but who would prefer full-time work. Using post-stratification weights among respondents, here are the questions and results.

Proposal: Raise the minimum wage every year to keep pace with inflation.

Would this be good, bad, or neither good nor bad for you personally?

Would this be good, bad, or neither good nor bad for the country?

Knowing that job-seekers—those with among the most to lose if opponents of increasing the minimum wage were correct in predicting job-loss—so clearly favor increasing the minimum wage to help workers keep up with inflation should matter to policy makers. Instead of listening only to talking heads speaking in the name of job-seekers, let’s hear the voices of job-seekers themselves.

Aaron Sojourner is a labor economist at the University of Minnesota’s Carlson School of Management.

Most members of Congress know very little about the H-2 guest worker visa programs, and, unfortunately, what they do know is mostly from speaking to a handful of business people who use the program or from listening to lobbyists who market ridiculous “studies” about how H-2 workers help the economy. They might have an image in their minds of “guest” workers lining up to take good jobs in the United States that no one else wants, and happily returning year after year. But Congressmen have little contact with H-2 workers and most are unaware of the widespread and ugly abuses that have marred the programs for decades. If they knew how often the programs have been used to exploit, cheat, and degrade foreign workers, they would realize it is no better than the infamous Bracero program of 50 years ago and should be either drastically reformed or abolished.

The Southern Poverty Law Center has been representing H-2 workers throughout the southern U.S. for years, hearing their stories of abuse and exploitation and suing on their behalf to recover at least some of the wages promised but unpaid, the fees extorted from helpless victims, the travel costs and debts incurred in return for unkept promises of well-paid, steady work. SPLC’s experience is captured in its new report, Close to Slavery 2013, which every journalist and immigration policy expert ought to read.

Every H-2 worker is not mistreated, but as Close to Slavery makes clear, so many workers are so badly abused that the program can’t be allowed to go on as it has. Year after year, international recruiters trick unsophisticated foreigners into borrowing large sums of money for the right to have a good job and substantial earnings in the U.S., only to find themselves locked into rural labor camps, poorly housed and fed, treated like prison labor, paid far less than promised, and then forced to repay recruiters and employers for expenses never mentioned during recruitment. SPLC has represented thousands of abused workers and won tens of millions of dollars in damages, but most H-2 workers have no access to our legal system, and even the judgments won often go unpaid.

Attempts by the U.S. Department of Labor to fix the H-2B non-agricultural program through regulatory improvements have been blocked by senators and congressmen from both parties who either don’t understand or don’t care that allowing these abuses to continue hurts U.S. workers, not just the foreign victims. The government’s failure to fix the well-documented problems in the program’s design makes it clear that any expansion of the program must be defeated. Real immigration reform would include reform of the H-2 visa and much tighter controls on the businesses that compete by exploiting the program and the guest workers themselves.

Our links today include a video:

• Book trailer for Behind the Kitchen Door by Saru Jayaraman
• Why Gender Equality Stalled (New York Times)
• Janet Yellen explains our crummy recovery in three charts (Washington Post)
• Who Gets Hurt Most by Higher Unemployment? (On the Economy)

Americans need Social Security more than ever, and they’re willing to pay for it. Rather than more cuts, we need higher benefits across the board.

This was the gist of my presentation at the National Academy of Social Insurance conference last month, whose theme was “Social Security and Medicare in a Time of Budget Austerity” (emphasis added). I wasn’t expecting it to go over very well.

Though my colleague Josh Bivens likes to point out that deficit reduction doesn’t necessarily imply spending cuts, and though Republicans don’t hesitate to call for tax cuts in the same context, there’s a general sense that expanding social insurance programs is out of the question and the best we can hope for is targeted measures to protect the most vulnerable.[1]

Even many progressives have trimmed their sails. Though most reject the need for additional cuts, few call for fully reversing cuts enacted in 1983, notably the gradual increase in the retirement age that is still taking effect. Progressives have also been divided about raising the payroll tax rate, the only way to pay for significant benefit increases while preserving the program’s contributory structure. Though almost all agree we should “scrap the cap” on taxable earnings, this only gets you part of the way to closing the projected shortfall in the aftermath of the Great Recession.Read more