Wednesday, June 24, 2015

Paid Leave: Do the Right Thing. I Don't Care If It's For the Wrong Reason.

The United States likes to celebrate its "exceptionalism", except when it's exceptional on the wrong side of the bell curve. Did you know, for example, that the US is the only developed nation that doesn't require employees to have some sort of guaranteed paid leave -- either sick leave (to care for themselves or a child) or family leave (to care for a newborn or newly-adopted child or seriously ill family member)?

The only protection workers have is the 1993 Family and Medical Leave Act which guarantees some workers up to 12 weeks of unpaid leave to care for a child or a family member or themselves. (More info about the FMLA is available from the Department of Labor; for example, here and here)

As reported in Claire Cain Miller's "Upshot" column in today's New York Times, maybe paid leave will finally get traction here. A few states require sick leave; a few cities require family leave. But there has been to date no political will for a national policy. This despite the fact that, as Miller notes,
Polls show that the vast majority of Americans support both. Eighty-five percent are in favor of requiring employees to offer paid sick leave, and 80 percent support paid family leave.

You'd expect politicians to want to get in front of that parade. And really - sick leave? Isn't that a no-brainer? I don't want my waiter serving me food when she's fighting off a cold. Ugh. And I don't want my financial analyst mis-entering data because he's focused on what's happening to his sick child at home.

So who's against this idea?
 Corporate America, as a whole, has long fought paid leave. Executives, especially at small businesses, say it burdens employers with additional costs and the need to temporarily replace employees. Some studies have found that when governments require paid leave, employers pay for it by decreasing employees’ wages.

But this argument is the same one that got trotted out in opposition to the Family and Medical Leave Act. It was used to argue against overtime laws. It is used every time increases in the minimum wage are proposed. And yet, somehow, every time those small steps are taken to improve workers' lives, businesses manage to adapt and succeed.

Moreover, not all small businesses agree. Miller interviewed the owner of one small business who offers her employees 12 weeks of paid parental leave because "It was not just the right thing to do but also a really important retention policy."

With the unemployment rate now below 6 percent, retention rates are more and more important. So maybe we can get employers to focus on doing the right thing. I don't care if it's for the wrong reason.

Tuesday, June 23, 2015

Once Again: If People Are Dying Because of Your Product, Admit It, and Fix It. Fast.

Most of us hate publicly admitting our failings. We're good at not admitting them to ourselves, and we're really good at hiding them from those whose opinions matter to us.

In this case, corporations are people too!

I've written before (here and here) about the problems with Takata airbags. The story -- which is now "resolving" itself with the largest automotive recall in U.S. history (32 million vehicles) -- continues to unfold. In an article in today's New York Times, reporters Hiroko Tabuchi and Danielle Ivory write that "Takata halted global safety audits at its manufacturing plants in 2009, a year after Honda had started recalling a small number of cars to replace the airbags."

Let's think about that for a moment: Your product has been identified as having a potentially life-threatening problem (to date, eight deaths have been attributed to the defect). One of your customers has started recalling vehicles in which your product was installed. And this is the moment when you choose to stop doing safety audits???


This was only one of several "serious safety lapses", according to a report released yesterday by Senator Bill Nelson (D - FL). According to the article, "a Takata executive is among those scheduled to testify before the [Senate] committee [on Commerce, Science, and Transportation] about its defective airbags."

I'm looking forward to reading that testimony.

Takata has already claimed that the report is inaccurate, based on out-of-context reading of corporate emails:
The company said that it had conducted regular reviews of product quality and safety and that the halted global audits referred to in the report related only to worker safety, not product quality or safety.
I feel much better, don't you?

In a previous post, I shared reports that Takata had conducted secret tests, using airbags from junked cars, as much as a decade ago, and came up with some alarming results. More alarming, however, was that those results didn't prod the company to take action. Something similar appears to have happened with the global safety audits:
When Takata eventually restarted the safety audits in 2011, auditors identified quality lapses in the plants [in Monclova, Mexico, and Moses Lake, WA], the report said, citing internal company emails....
But those findings were not shared with Takata's headquarters in Tokyo, the report said, citing internal emails from Takata's safety director at the time.
Then, when the safety director returned to the plant months later to conduct a follow-up audit, employees appeared to scramble to create the appearance of a safety committee within the plant. 
It just gets worse.

We do know that the propellant, which is intended to help the airbag inflate very fast in the event of a crash, can degrade. When that happens, the airbag may inflate with too much force, rupturing the steel canisters that hold the propellant and spewing metal shards into the passenger compartment. But it's not altogether clear what causes the propellant to degrade (moisture and high temperatures help, but not all propellant exposed to those conditions degrades in the same way). Nor is it completely clear what causes the inflater ruptures. So it's likely that "replacement airbags being fitted in recalled cars [will] ...eventually have to be recalled."

And you wonder why I like regulators with teeth?

Monday, June 22, 2015

Will Coal Finally Clean Up its Act?

I started writing about how dirty "clean coal" is back in 2010 and 2011 (here, here, and here), originally driven by the horrific death of 29 miners in the Upper Big Branch mine in April 2010, the worst mine disaster in the US in more than four decades. Massey Energy, owner of the Upper Big Branch, had come to see fines for safety violations as simply a cost of doing business, and it seemed as though no one could do anything about it.

Finally, maybe, someone is.

A 2011 Mine Safety and Health Administration report explicitly blamed safety violations at the mine for allowing coal dust and methane gas to collect and ignite (MSHA report, here), but it wasn't until November of last year that Don Blankenship, Massey Energy's former chief executive, was indicted on four criminal counts by a federal grand jury in West Virginia (13 November 2014 New York Times article by Trip Gabriel, here; indictment, here). Massey Energy is now owned by Alpha Natural Resources, which acquired Massey in 2011.

Penalties for the criminal counts Blankenship is facing, which include conspiracy to violate mine safety and health standards and conspiracy to defraud the United States (by obstructing the Labor Department and MSHA efforts to enforce mine safety standards), could add up to more than 30 years of prison time.

Blankenship's trial has not yet begun (originally scheduled to begin in January, it has been postponed to October; Blankenship has pleaded not guilty and is free on $5 million bond), but something has changed in West Virginia.

In a long article in Sunday's New York Times, David Segal recounts what brought down Blankenship, a man who had long acted as though the state in general and his coal mines in particular were a private fiefdom. The short answer is: hubris.
...How did Mr. Blankenship become the first coal chief in the region to face charges that could put him in prison? One answer is that the tragedy of Upper Big Branch was of such a scale and its apparent causes so mercenary -- prosecutors say the explosion stemmed from a hellbent emphasis on production at the expense of safety -- that a criminal case may have been inevitable. It came, too, at a time when economic shifts have reduced the power of coal kinds, who now rule over fiefs in decline.
Then there is Mr. Blankenship himself, a man who can come across as a cartoon of a corporate villain. He tangled with inspectors and buffaloed rivals. He is a Republican in a state that was long a Democratic redoubt, and he seemed to relish making public officials his enemies.
And while many senior managers -- think of the bankers who nearly ran this economy off the rails in 2008 -- insulate themselves from criminal liability with layers of middle management, Blankenship was micro-manager par excellence. There's no way he can pretend not to have know what was happening at Upper Big Branch.

Segal quotes a West Virginia University law professor: "One reason that Blankenship is being prosecuted is that he was different from other top coal executives. Most CEOs don't get production records every half-hour by fax. That places him right in the mine, hands on. That makes him vulnerable."

How vulnerable? We'll have to wait and see.