Labor Day Special

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An ASU economist will discuss the future of job creation in our state and country. President Obama issued an executive order barring discrimination against LGBT employees working for the federal government and federal contractors. A labor law attorney will discuss the order and what it means to LGBT employees in Arizona. Also, a discussion on the legalities of unions allowed for college athletes.

Ted Simons: We begin tonight's show by looking at the changing nature of employment in a world where machines and computers are increasingly replacing human labor. Dennis Hoffman is an economist with ASU's W.P. Carey School of Business. Always a pleasure, Dennis. This continuing series is looking at the future of things in Arizona, in general as well. This is fascinating, because the future of jobs, I mean, we could be redefining what a job is.

Dennis Hoffman: Absolutely, Ted. And you know, you can read these -- Look into the future books and robotics, and the age of the machine and all of this kind of stuff, and it sounds a bit science fiction oriented, but I think this really resonates with a lot of folks right now. Folks that have experienced job loss due to automation and have not been able to say what is this race with the machine these people talk about.

Ted Simons: In the future, do you want a race with the machine or do you want to run alongside the machine?

Dennis Hoffman: I think you want to race with the machine alongside the machine as you've said it. Not with the thought that you can beat the computer, not with the thought that you can take advantage of automation or prevent 40 happening, or technological process or somehow hold this back or impede it. I think we need to embrace it. And I think those that do choose to embrace it, and you can do so in many ways. We're talking about stem degrees, obviously, but we're also talking about people that can articulate products that machines can produce, that can market services that these machines can create. And that -- You need to compliment this automated process, and those would be the winners. Those that turn their backs on this, that, you know, say the economy just didn't provide for me, that's going to be a tough row.

Ted Simons: Is there a worry, a concern that technology could be outpacing the training that we're all scrambling to get?

Dennis Hoffman: Well, absolutely. I think it's tough to train, you know, keep pace with training -- Keeps pace with automation. My mind goes back to a statistics professor that had a college, and he said, I will teach you classical statistics, I will teach you applications that will last a lifetime but I will not teach what you happens when you punch the F-4 key on a computer. I will not do that, because what happens today will be different than what happens tomorrow. And of course we need applications, we need to understand applications, but we don't need to get wedded to current technologies. We need to be adaptive, and you know, be able to keep pace with this ever-advancing technological process.

Ted Simons: What does that mean in terms of jobs, in terms of employment? Part-time jobs becoming more prevalent do you think?

Dennis Hoffman: It means that individuals that continually monitor their skill set, so as -- And I don't want that -- That doesn't always mean you can always fix the latest computer. That means you always understand what computers can deliver. And you could be a market -- You could be in marketing, you could be in sales, you can be in distribution, you could be in supply chain. You need to understand how goods and services will be transacted as a result of this new machine age. And skills in the past that were rewarded, say physical skills and strength and brawn, they're going to be replaced. I think the rewarded skills will be people that are conscientious, people that can communicate. Actually it cuts across genders. These authors write that women may have the distinct advantage going forward, Ted, because women are more conscientious, they're able to interact with people at dimensions that outstrip men's ability in many cases.

Ted Simons: So from a public policy standpoint, how do you keep from having a society of a bunch of stubborn dudes who aren't keeping up and they're not employed, I mean, you know what happens when societies have folks that aren't employed, and folks who think that disparity of income -- It sounds like this is a recipe for more inequality of income. What is going to happen in the future?

Dennis Hoffman: That's a risk. That's absolutely a risk. The market signals will be clear to those individuals. They're going to have to embrace some of this. They're always are -- There's always going to be room, say in an Arizona, for HVAC technicians, for people that will need a modicum of technical skills, but are willing to roll up the sleeves and do some work. So there will be jobs there, but the jobs that will be rewarded by the market are those jobs that embrace this technology. So that's what these authors talk about, the big divide. So if you are content with manual labor, if you're content with not embracing what a machine can do, your lot is going to be low-income and in a pretty tough job.

Ted Simons: In general, does that mean that we look at prosperity in a different way? Again, guy back to this part-time -- Machines make things more efficient. If I'm working eight hours or 10 hours a day and the machine is doing what I'm doing in three or four, what am I doing the rest of the day?

Dennis Hoffman: Well, leisure, we're going to have more leisure time. We're going to have goods -- Some of the points that have been made in this literature suggest that we don't even measure GDP correctly because GDP is price-based. If things are given away for free on the internet, which there's huge amounts of information for free on the internet, I bought a car today. I did all of my research on the internet, and I learned a lot, and it was very helpful in the negotiation. I got all that information for free.

Ted Simons: My goodness. OK. So, again, public policy, Arizona lawmakers, decision makers, what did they see when they look at the future and see digital dots and dashes, what did they see as far as policy is concerned?

Dennis Hoffman: There's still a role for government. Government -- Some of the folks out there watching, they're saying, Ted, it's Hoffman, and he's on "Arizona Horizon," he's always found a role for government. But in this case the role for government is to provide for education, provide for opportunities, for people to learn these skills, and again, stem is one set of skills. But it's not just stem, it's ability to communicate. It's ability to think analytically. Align yourself with the abilities these machines have and think about how you can market products and services more efficiently and more lucrative fashion. Infrastructure is certainly a government play. Tax reform would be a government play. Immigration reform, and we've talked about this ad nauseam, but it is huge. Immigration reform would help unleash this labor force.

Ted Simons: 30 seconds left -- Is Arizona ready for this future?

Dennis Hoffman: Oh, we hope so, Ted. We absolutely hope so. Now, there's some in Arizona that are waiting for the old Arizona to come back. Well, let's just wait this thing out and we'll become this, you know, this growth magnet, this people magnet and construction will take over again. I think as every month goes by, people are really starting to question that. So investing in education, you know, and more investments in higher education, vocational skills, they're needed, they'll be rewarded.

Ted Simons: Absolutely fascinating stuff. Brave new world. Thanks for joining us.

Dennis Hoffman: Great to be here, Ted.

Ted Simons: President Obama recently issued an executive order that bars discrimination against LGBT employees working for federal contractors and the federal government. We spoke with Phoenix labor law attorney Jeff Brodin about the order's impact on workers and businesses here in Arizona. Good to have you here. Thanks so much.

Jeff Brodin: Thank you.

Ted Simons: What exactly did the president do?

Jeff Brodin: Really two big things yesterday. One was to amend executive order, 11246, which prior to yesterday prohibited discrimination by federal contractors, employees of federal contractors on the basis of race, gender, religion, national origin, and sex. And to those categories, the president added with this stroke of the pen yesterday, sexual orientation and gender identity. So this protects federal -- Employees of federal contractors, which is about 25% of the work force.

Ted Simons: And this was originally, you mentioned racial lines and sexual -- This was LBJ, back in that day.

Jeff Brodin: It's 49 years old, the executive order. So pretty close to the same age as the civil rights act which he signed the year before.

Ted Simons: Another one not too far along was president nixon signed something regarding federal employees, that was amended as well?

Jeff Brodin: 11478, and that was signed by president nixon, I believe in '69, to prohibit federal government from discriminating against its employees. So federal employees gained the same protections as under the order that was signed by president Johnson. That was amended in '98 by president Clinton to add sexual orientation, so what President Obama did yesterday is he added gender identity to the federal employee protection.

Ted Simons: And -- So what about religious groups especially with these federal contractors? How does that apply?

Jeff Brodin: There is no carve-out as has been proposed in the federal legislation. But under the bush -- Second bush administration, there was a religious clause that allows an employer that is a religious institution or association to favor a person based upon their religion. So say it's the Catholic church and they're looking to hire someone in the school. They can favor someone who is Catholic, but they can't exclude someone on the basis of the protected categories.

Ted Simons: So that wasn't necessarily amended, that still is in play, but that is changed by these amendments. Correct?

Jeff Brodin: Correct. It actually might become more important to some religious institutions because of the fact that it's a category that some churches view differently, sexual orientation or gender identity than the other protected categories. And it was a topic that was lobbied, President Obama was lobbied about prior to his signing. And there were a number of religious groups in favor of not having an exclusion, keeping it as it was, and there were other groups that argued for a total carve out and exception.

Ted Simons: Before yesterday, was being Gay a firing offense for federal employees and/or federal contractors?

Jeff Brodin: Yes.

Ted Simons: It was? I think that would surprise a lot of people.

Jeff Brodin: When they do surveys on what -- How many employees are protected, on the basis of sexual orientation in particular, most people think it's already law that you can't discriminate against someone on the basis of sexual orientation. However, that protection exists only in 18 states. And a number of municipalities, like Phoenix, and Tucson, and Tempe, there's a ballot initiative coming up in August to see if the action of the city council there will be affirmed.

Ted Simons: And you mentioned previously that there was federal legislation that was supposed to address this, obviously that has not happened. What is going on with that?

Jeff Brodin: Sure. The law is called ENDA. I'm not sure what the acronym stands for. There's been some form of that in Congress proposed and considered over the last 40 years. It's come the closest in this session when the senate in November passed the bipartisan majority, passed it, but it stalled in the house, it looks like it would have a majority and pass if it came to a vote, but speaker Boehner has made it clear he won't bring it to a vote.

Ted Simons: Thus the president says executive order and the president can do this?

Jeff Brodin: Correct. This is an executive order, that's the type of thing only the president has the authority to do. It's federal employees -- It's exactly the nature of the type of action the chief executive has the authority to do.

Ted Simons: OK. Where does title Vii play into this? First describe it.

Jeff Brodin: Title Vii is the first name was the civil rights act of 1964. Also then became known as title Vii by the number of the act. And that prohibits discrimination by an employer on the basis of the same category that -- And more, disabilities under the Americans with Disabilities Act, genetic information is -- But what title Vii does, it prohibits discrimination and gives employees a remedy. So if they believe they have been discriminated against they can file a claim, say I was discriminated against, they can get damages, the EEOC can ask for reinstatement. It's really the statute that allows the employee to get redress if they've been discriminated against.

Ted Simons: What the president did is to the employer say you can't do X, Y, and Z, what title Vii would be to the employee if they do X, Y, and Z, here's your remedy.

Jeff Brodin: Correct. And what's -- The development -- The new development in that area is that sexual orientation and gender identity are not specifically protected characteristics or categories under title Vii. But what the EEOC has -- Takes a position is that title Vii does include protections against sexual orientation, discrimination, and gender identity under the prohibition of sex discrimination of title Vii. So as far as EEOC is concerned, it's already there. And there is a district court case that's ruled the same way. Like same-sex marriage developed through the courts, I think this is an area that will follow that. And the courts are likely to rule in the -- With the position of the EEOC. That's a prediction, but it looks like it's a possible one.

Ted Simons: Aside from the critics who you look at this as yet another example, they see it as the president's imperial presidency and those criticisms. There's also concern that it opens employers up to the threats of costly legal action. Valid concerns? What do you think?

Jeff Brodin: Every time a category has been added to protections against discrimination, that's the argument. Traditionally that businesses have made. This area, protection based on sexual orientation or gender identity, it's been a sea change in the position businesses take. Businesses on the whole favor this protection. They believe it's good business to have these protections in their policies to have programs that really promote diversity, and this is -- I think in this day and age and economy and workplace, employers have really come to learn the value of diversity, so most employers do have policies that protect based on sexual orientation, and gender identity. However, there are many who don't, and it's for those employees who may be working for one of those employers they need the protection.

Ted Simons: Impact of the executive orders on Arizona.

Jeff Brodin: Arizona, 25% of the work force work for federal contractors. Arizona is a state where we have a lot of federal contracts through the various big businesses we have in town. So that I've not seen statistics on it, but my guess it would be larger than 25% of the work force is now protected under the executive order.

Ted Simons: All right. Jeff, good to have you here.

Jeff Brodin: Thank you.

Ted Simons: We wrap up our Labor Day special with a look at a ruling that gives some college athletes the right to unionize. A regional director of the national labor relations board recently ruled that college athletes at northwestern University are employees and thus have the right to unionize. We talked about the ruling with Phoenix labor attorney Stanley Lubin. It's good to have you here.

Stanley Lubin: My pleasure.

Ted Simons: This is a really big deal, and in the future it could be a really big deal. What's going on here?

Stanley Lubin: It could be a big deal, but when you count the numbers today, it really isn't. It applies only to private schools, and anything that is not a public school. A publicly owned school. Because they're exempt from the statute. So out of all the major colleges, 17 of them are covered by this decision.

Ted Simons: Some of those 17 schools obviously northwestern, Stanford, Notre Dame, USC, those are big college sports.

Stanley Lubin: Miami.

Ted Simons: Yeah.

Stanley Lubin: Yeah. That's true. And the Loyola schools.

Ted Simons: OK. So what did the national labor relations board, and this was not the full board, this was --

Stanley Lubin: just the regional director in Chicago.

Ted Simons: What did -- Exactly did they rule?

Stanley Lubin: He basically said these football players are athletes are employed by the University. They're basically -- Not paid in cash, but they're paid. They get scholarships, they get room and board, they get clothing, they get travel, they get food. And in return for that, their lives are controlled by the University's athletic department. They are told when to eat, what to eat, where to eat, how to dress. They are required to be at practices sometimes up to 40 to 60 hours a week. And even during the school year, their football takes priority over their academics on occasion. So it's a very big thing for them to decide whether or not -- What is their life going to be like, and it's that of an employee. An employee is not necessarily just paid in cash, if you work for somebody and you get remuneration for it, it does not have to be in cash. You're an employee.

Ted Simons: Compensation for service.

Stanley Lubin: Compensation for service.

Ted Simons: Schools are saying and the NCAA is saying, the scholarships, that's not compensation, that's a grant.

Stanley Lubin: They, call it whatever they want, but it's compensation when you require the students, the athletes to be present for half their summer, then when they're in school, they're working 20 to 40 hours a week, sometimes more, to the point where, for example, in the record at the northwestern case, there is evidence that, for example, if a student wasn't available at the time a test was given they would ask the professor to move the date of the test. And most of them would. In addition, they would actually hold the bus back for students so they could take a test if the professor wouldn't yield on it. This is no question about it, these kids are being paid.

Ted Simons: And again, compensation for service, also they're under the direct control, you say of the school, but really of managers in & those managers happen to be their coaches.

Stanley Lubin: That's correct. They have to get permission to leave campus, for example, if they wanted to go home for a weekend or something, even during the nonseason. A good example of what happens is that the players have to be where the coaches want them to be, when they want them there, and doing what the coaches say. That's what an employer does. When you're at work.

Ted Simons: You're being managed.

Stanley Lubin: You're being managed; you're totally controlled by them when you're at work.

Ted Simons: So other college players, again, at private universities, this could be an issue. Not public universities, because the national labor relations board does not have authority over public Universities?

Stanley Lubin: That's correct. The definition of employee under the national labor relations act excludes all employees of any public entity.

Ted Simons: So what happens to athletes at public universities?

Stanley Lubin: It depends on what state they're in. For example, if you're back in New York or Michigan or Ohio, or some of other states back east, or California, you may have a statute that applies equally or as well as or differently than the national labor relations act, that allows those employees to claim it. There's no decision that says they are employees, but that doesn't mean somebody is not going to try for it now.

Ted Simons: So you could have 50 different definitions of an employee of a student athlete employee.

Stanley Lubin: Some of these -- Somebody said that to me earlier and I said yeah, but not in Arizona.

Ted Simons: 49 then.

Stanley Lubin: Right. The only school in Arizona that would be covered would be grant canyon.

Ted Simons: That's true.

Stanley Lubin: U of A and ASU are both public schools.

Ted Simons: I know the NCAA and the schools are saying the athletes, they're students, they're not -- They're not the same as truckers. They're not the same as workers in the traditional sense of employees. Is that going to stand?

Stanley Lubin: Is a trucker the same as the University professor? That's maybe a bad example. Is the trucker the same as -- An auto work Jose Herrera builds a car? The same as the pilot as an airplane? The statutes cover different types of employees. These are different types of employee. Baseball players, football players of the professionals legion are covered by this statute.

Ted Simons: Considering the unique nature of a student athlete, is there case law out there, is there anything similar to this?

Stanley Lubin: No.

Ted Simons: Nothing?

Stanley Lubin: No. The University argue that the brown -- The case involving brown University involving graduate student teachers, and they were held not be employees because they were there for a very short period of time, a year or two generally, and that they -- Their primary purpose was education of themselves. To get their education. And this is a way they were paying for it. These regional director here distinguished that case by saying that's all well and good, but they're not working 40 to 60 hours a week, and their goal here is not to teach other students, or to learn, it's to play football and win a game, as the northwestern said, in a video that was in evidence. The goal is to win games. And they make a lot of money off football.

Ted Simons: We have this guy in Chicago with this ruling now, does it go back to D.C. and the full board?

Stanley Lubin: If the University appeals, and they said they will, they have 30 days, they have a right to request for review. They will -- A very quick preliminary decision from the labor board if it's a yes. If it's a no it will take time. But generally the board issues a quick decision, they hold an election, lock the ballots up without counting them and wait for a full decision to come down. My guess is that we'll know the answer to that within three months.

Ted Simons: If the full board says, these are employees, you better get used to it, how does college sports get used to it?

Stanley Lubin: I don't think it's a big deal.

Ted Simons: Interesting.

Stanley Lubin: They just have to sit down and bargain with them. Overturn some conditions of employment. They may have to bargain over wages. That would be an interesting one because of the NCAA rules.

Ted Simons: You're going to have strikes, you're going to have University locking out some of these student athletes?

Stanley Lubin: I don't know that's ever going to happen, but who knows?

Ted Simons: It's possible.

Stanley Lubin: It's possible. It's possible now. What's to stop the athletes from saying, we're not going to play this weekend? In fact, it happened last season, earlier this season one of the colleges in the south, if I remember right, the players refused to travel to a game because they were mistreated by the coach.

Ted Simons: Exactly. And the coach I believe got the boot.

Stanley Lubin: I think so. I'm not sure about all the facts.

Ted Simons: So last question -- Are you a college sports fan?

Stanley Lubin: Big one.

Ted Simons: All right. Do you think that in three to five years, or in the foreseeable future, we will look back on this and look back on college sports as it now exists and say, wow. Things have certainly changed.

Stanley Lubin: They're going to change anyway. The NCAA is under incredible pressure to pass rules to allow these athletes to be paid something, or do something different. They're uncustomer incredible pressure to change the rules now. I respective of this decision. So will there be change? Yes. Will this decision drive the change? Probably in part, yes. But in part, it depends on whether it stands.

Ted Simons: Yes.

Stanley Lubin: And I think it's going to be a question of a lot of other factors coming in as well.

Ted Simons: Very quickly, if the Universities decide a stipend is a way to go, a certain -- Every athlete gets paid X does that alleviate concerns here?

Stanley Lubin: It might. It might. But the concern here that has been driving this train has been injuries. What happens if I get hurt? What happens for the rest of my life?

Ted Simons: And there are other lawsuits right now along those lines.

Stanley Lubin: True. In fact the coaches at north western are not opposed to this.

Ted Simons: This is fascinating stuff. Good to have you here.

Stanley Lubin: My pleasure.

Ted Simons: That is it for now. Thank you so much for joining us on this special Labor Day edition of "Arizona Horizon." I'm Ted Simons.

Dennis Hoffman:Economist, W.P. Carey School of Business at Arizona State University; Jeff Brodin:Labor Law Attorney, Phoenix; Stanley Lubin:Labor Attorney, Phoenix;

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