With wages stagnating in Sacramento and nationwide, economic anxiety this Labor Day has hit not just the low-wage workers who usually feel the brunt of economic uncertainty. It’s also affecting highly skilled professionals. Through the courts and in union elections, many white-collar workers are demanding many of the same things their blue-collar counterparts have sought for years: benefit protections and compensation for long hours spent on the job.
A recent wave of lawsuits has questioned insurance, technology and even brokerage firms’ ability to avoid paying overtime in California. Employees are contending they have been wrongly classified in salaried, rather than hourly, positions.
As the labor movement looks to revitalize, many of the unions that have claimed the most success at recruiting new workers have done so by reaching out to white-collar workers: teachers, nurses, communications workers and even lawyers.
“White-collar work is being affected by some of the greatest technological advances we’ve ever seen,” said Lee Price, director of research at the Economic Policy Institute.
“Companies are finding ways to do more with fewer people. If you look at the people who do paper-pushing jobs – payroll, accounts receivable, accounts payable – a lot of that has been made greatly more efficient because of computers,” he said.
That has fueled concerns about jobs going overseas or disappearing altogether, Price said.
The anxiety is reflected in some recent opinion polls and economic measurements. A survey released last week of 805 union and nonunion workers nationwide by Peter D. Hart Research Associates found that 54 percent of those polled were “worried and concerned” about achieving their economic and financial goals, compared with 43 percent who said they were “hopeful and confident.” The survey was commissioned by the AFL-CIO.
The anxiety comes despite generally strong growth in the overall national economy and a shrinking unemployment rate that, in California, dipped to 5.1 percent in July. But unlike many past recoveries, well-paid workers have faced some challenges during the most recent expansion.
After the U.S. Census Bureau reported last week that household incomes failed to increase for five straight years, an analysis by the Economic Policy Institute found the most significant decline in real income came in the upper-middle of the economic ladder – a bracket that encompasses many working professionals. The average real income of households in the fourth-highest bracket among five income groupings fell 1.1 percent from 2003 to 2004, dropping to a mean of $70,085. That drop is larger than in any other segment.
Although California saw growth in high-wage jobs between 2002 and 2004, the trend has since been reversed. The greatest surge among new jobs is in low-paying fields, such as retail and sales, according to University of California, Berkeley, economist Arindrajit Dube.
Meanwhile, businesses with some of the greatest concentrations of skilled employees have seen their compensation practices challenged in the courtroom.
In Silicon Valley, software workers who during the tech-boom years sometimes spent entire nights working at their desks are now demanding overtime. Electronic Arts and Sony Computer Entertainment America, for instance, have been sued by employees demanding overtime.
In the banking and insurance industries, a wave of similar challenges has hit Bank of America, Farmers Insurance Exchange and State Farm Insurance. On Thursday, Allstate Corp. said it would pay up to $120 million to settle charges that claims adjusters worked nights and weekends without overtime.
Last month Merrill Lynch & Co., in what could be the first in a series of settlements in the financial services industry, settled a California overtime case brought by stockbrokers who said they were wrongly classified as exempt from state and federal overtime laws.
Some of those who have taken legal action on overtime issues say they were overworked to the point of exhaustion.
“With the amount of work we had to do, it was mandatory 10-hour days, plus coming in on Saturdays,” said Gary Oberholtz, a 57-year-old Glendale resident who helped bring a class-action case against Computer Sciences Corp., which settled it for $24 million.
Despite earning $72,000 a year, he considered the arrangement, in which his network engineering job was deemed exempt from overtime, to be unfair and tiring.
“All the time, you’re busy with work,” he said. “You just never rest.”
Efforts to reach Computer Sciences Corp. were unsuccessful.
Not everyone in the technology field, however, approves of fighting management.
“The people who work in the technology industry are smart enough to understand economics. If you demand more than the company can afford, then everyone will be hurt,” said Jeffrey Tarter, executive director of the Association of Support Professionals, the Watertown, Mass.-based group that represents employees in tech support departments.
“They’re not dead-end jobs. If they don’t like their job, they can leave,” Tarter said. “These are high-skilled people.”
Some legal watchers believe the wave of overtime suits in California says less about disgruntled employees than it does about opportunistic attorneys taking advantage of California’s labor laws.
“It’s being driven by the lawyers. They’re constantly looking for areas where they can go in and file these lawsuits,” said John H. Sullivan, president of the business-backed Civil Justice Association of California.
Whatever the case, organizers in the union movement have sought to capitalize on the concerns of professional workers.
Perhaps the biggest recruitment success unions have been able to claim in the past several years has come in health care, where nurses, technicians, pharmacists and other highly trained employees have signed union cards.
This is caused by two factors, labor experts say: frustration with work changes wrought by managed care, and expectations that unionization will prevent jobs from being transferred overseas, as many workers fear in more mobile industries.
After this summer’s split in organized labor, unions in the two competing federations – the AFL-CIO and the Change to Win coalition – will likely find themselves competing to represent health care workers.
Still, challenges remain for any union attempting to bring collective bargaining into workplaces dominated by white-collar workers.
“With the professionals, they don’t hate the boss, they want to be the boss,” said Paul E. Almeida, director of the AFL-CIO’s Department of Professional Employees, in explaining why reaching out to white-collar workers can be tough.
Kathy Ryals, a deputy public defender in Alameda County, echoed a similar theme in explaining her fellow attorneys’ recent decision to join Local 21 of the International Federation of Professional and Technical Engineers.
“We’re not dissatisfied with management; we just wanted a greater voice with the (county) Board of Supervisors,” said Ryals. “We’ve been concerned about all the recent budget cuts and want to make sure our clients don’t suffer.”
A less traditional approach to organizing white-collar workers is being tried by WashTech, a Seattle-based affiliate of the Communication Workers of America. It has an organizing arm whose members don’t necessarily have bargaining rights but who hope to add to public policy discussions about concerns in the technology workplace.
“I feel the American middle class was given a story back in the ’80s when manufacturing disappeared, and we were all told that in the future we’ll all be knowledge workers,” said Peter Tucker, a semiretired Sacramento resident, who said he joined because he wants to see a national dialogue about sending tech jobs overseas.
“It lasted maybe 10 years, and now all the information worker jobs are going overseas,” he said.
Cornell University labor expert Richard Hurd put it this way: “It’s obvious how factories have changed. It’s less obvious how white-collar work has changed, but it’s just as significant.”