Employee Practices – Or ‘More Top Down Government Control’

Over the course of time, the Federal government has exerted control over employment.  Each time control has been exerted, freedoms, money, and precious resources have been squandered, wasted, and lost forever.  The following is a high level overview of the legislation and the costs involved.  There are no political leanings contained herein, simply facts about the costs and the freedoms lost.  Tied to each of these pieces of legislation is the utopian ‘Kool-Aid’ goal of full employment previously discussed.

In brief review, modern employment, as we know it, began with a small change.   Soldiers, sailors, marines, and airmen coming home after being drafted to go to war, wanted and needed jobs.  Thus, the Federal Government changed some rules, wrote the legislation, and veteran preference in hiring began.  Sounds good, right?  Everyone loves veterans, so this is going to be a good thing all around; not quite.  By carving out exclusions for veterans, other people wanted to possess special treatment.  These people found lawyers to argue their cause, and special classes emerged for all types of people.  Entire industries have been built to identify, find, and pressure for special classes in the law.

This is not to say some of those people desiring special treatment did not need to have awareness of their particular plight become more known.  For example, people with physical disabilities needed awareness raised to advance hiring practices and level the playing field, but this should not have been a matter for federal legislation.  Each state in the Republic of America was considering laws for physically disabled people.  By forcing federal legislation, states lost the power to dictate, employers lost the freedom to act independently, and those with physical disabilities became second-class employees.  Instead of pride in accomplishment, which was desired while raising awareness, serf-like attitudes and complacency have become the order of the day.

Let us review three federal laws that emerged from these circumstances described above and which influenced employer/employee relations.

Americans with Disabilities Act  – 1990

  • Has its seminal beginning in 1973 Section 504 making it illegal to discriminate against those with disabilities if the organization receives Federal Government subsidies.
    • “No otherwise qualified individual with handicaps in the United States . . . shall, solely by reason of her or his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance….”  (ED.gov, 1995)
    • Classifies disabilities by disease.  Includes “Hidden Disease[s],” is changed constantly to update diseases covered, and dictates the only requirement for the disease is that the disease have a material effect on one’s ability to perform a major life activity.”  (Ed.gov, 1995)
    • Costs to business mostly occur in ‘soft’ costs, i.e., changing procedures, reasonable accommodations, etc.  Something to keep in mind though, “… noncompliance can cost an employer. In fiscal year 2006, for example, the Equal Employment Opportunity Commission (EEOC) resolved 15,045 disability discrimination charges and recovered $48.8 million in monetary benefits for workers who did not receive accommodations to which they are entitled under the ADA…”  (Woog, 2008)  Thus, monetarily speaking, noncompliance costs more than compliance.

Monetary issues are not the only costs involved, and the ‘soft’ discrimination of people with disabilities is reported to remain an ongoing problem.  Regardless of size in the organization, employers report a general consensus:  if the costs of compliance are under $500, it “makes sense” to comply.  If more than $500, the employer and disabled person will be at loggerheads.  The reason so many people have problems with compliance is that disability compliance is difficult to prove in the current employee/employer environment.  Shifting the paradigm and hiring by skill set allows the individual to set the work site accommodations, own the solution, and drive relationship.  Pride in accomplishment is lost when government mandates compliance, forming yet another cost.

Equal Employment Opportunity Commission (EEOC)

  • Begun with Title VII of the Civil Rights Act of 1964.
    • Foundations are discovered in Executive Order 8802, signed by President F. D. Roosevelt, demanding no discrimination based upon Race, Color, or National Origin.  This is the same president with war camps rounding up Japanese descendants and forcing those of German and Italian descent underground, but I digress.
    • Civil Rights Movement forces onto the worldwide stage the disparity between those of color and national descent.
      • Funded by the USSR and other communist and Islamist nations
      • Feeds into the current mindset that those of color should be coddled
      • Strips pride of accomplishment, desire to improve, and need to become better from people of all color, race, and national origin
      • Age discrimination has been added to protected classes against discrimination and the following statistics are known:

Equal Employment Opportunity Commission’s (EEOC) Charge Statistics for 2008. Private sector discrimination filings with the EEOC for 2008 (95,402) surpassed 2007 (82,792) by a staggering 15% – the biggest jump in the federal agency’s entire 44-year history.

  • Legal fees for lawyers, litigation costs pre-trial, and costs for compliance monitoring and training are substantial outlays for all business organizations regardless of size.  Compliance costs do not include ‘soft’ expenses and, as shown above, compliance costs are never about money alone, but many companies place total costs for compliance in monetary figures between $100,000 to $500,000 depending upon business organization size per claim.

Societal costs are staggering and unsustainable.  The need to both protect against litigation and meet the hiring quotas has, instead of bringing together a unified melting pot, broken the nation along more racial and national lines, pitted the experienced against the inexperienced, slandered age, and destroyed knowledge attainment for political connections.  The death of merit, honor, and dignity has been pronounced if changes to employment cannot occur soon.

Affirmative Action

  • This disaster has lead to such ambiguous terms as “Reverse Discrimination,” “White Guilt,” etc.  Affirmative Action was expected to be a temporary measure, but like all governments everywhere nothing is more permanent than a temporary measure.
  • Empowering judges to litigate from the bench to “correct wrongs.”  While the courts straddle the line about applying affirmative action and EEO, specific mathematical formulas detailing compliance are frowned upon, making compliance costs soar.
  • Closely tied to the utopian use of money to sway society.  Local, state, and federal government call this “investing in minorities and women” by spending prescribed amounts of money solely on business organizations owned by minorities and located in minority areas, all based upon quotas and political leadership.

Affirmative action, more than any other piece of legislation, accrues higher compliance costs.  Most of the legal problems will end in the Supreme Court where the basic price tag is $1 million.  Again, the entire cost of this legislation is not found in dollars and cents, but in mindsets, attitudes, and societal shifting.  The government costs for abiding by their rules is staggering; yet, the costs for businesses, schools, non-profits, etc., is worse.  Disney produced the movie, “Remember the Titans;” in this movie, the head coach and his assistant coach are having a conversation with direct merit to Affirmative Action.  The head coach tells the assistant that he “… [I]s crippling the young black kids… by coddling them.”  Society, since the Civil Rights Act of 1964 has crippled black society into being what they are currently, crippled white society, and forged iron chains of captivity around the hands and feet of all Americans in and out of the workforce.

These are but three of the many pieces of legislation stemming from the idealistic desire of the ‘Employment Act of 1946’ and the 1976 revision ‘Full Employment and Balanced Growth Bill.’  Top down government mandates only work in the US Military, and then only rarely work well.  America must re-embrace free enterprise, recognize that knowledge builds value, and exercise the freedom to choose including the inherent responsibility and accountability for consequences.  Until then, employers will continue to be forced into compliance, employees will lose, and politicians at the federal and state levels of government will award winners and losers unequally.

We, the citizens of America, must force the issue of change and reign in government spending, both of which can be accomplished through shifting the employment paradigm from employer/employee relations to an employer/independent contractor model.

© 2012 M. Dave Salisbury

All Rights Reserved

References

Ed.gov. (1995, January 01). The civil rights of students with hidden disabilities under section 504 of the rehabilitation act of 1973. Retrieved from http://www2.ed.gov/about/offices/list/ocr/docs/hq5269.html

Woog, D. (2008, August 22). What is the real cost of ada compliance?. Retrieved from http://hrpeople.monster.com/news/articles/1073-what-is-the-real-cost-of-ada-compliance

Employee Benefits – A History of Corruption and Coercion

From humble beginnings atrocities begin.  Every action must follow immutable and unalterable laws, consequences follow choices; this article follows the influence of choice pieces of legislation from impetus to current event entanglements.  Only through learning history can proper change produce preferred results.

Modern employment, as we know it, began with a small change from the republic principles of free enterprise morphing into the democratic philosophies of top-down government control.  Soldiers, sailors, marines, and airmen coming home from WWII had left jobs and wanted those jobs back; so, the Federal Government changed policies, wrote legislation, and veteran preference in hiring began.  Sounds good, right?  But by carving out exclusions for veterans, other people wanted to possess special treatment.

What occurred in Federal Legislation has caused some serious problems; the first of these problems began with the altruistic ideal of full employment.  Full employment refers to  “the continuing policy and responsibility of the Federal Government . . . to coordinate and utilize all its plans, functions, and resources for the purpose of creating and maintaining . . . conditions under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production, and purchasing power.”  (Scitovszky, 1946)

The Federal Government in 1945, with enough good intentions to pave a super-highway from New York to Beijing, sought to avoid the natural swings which occur in finance and wrote a bill, eventually entitled the ‘Employment Act of 1946’ to avoid future problems experienced between the prosperous 1920’s and the depression of the 1930’s.   To try to improve financial situations for the Federal Government, employment was considered and tied to economic indicators, suggesting low unemployment equates to higher tax revenues and dollar strength.  This reasoning is valid; however, the consequences spinning off these legislative nightmares are self-defeating.

The next time these economic indicators were reviewed was in 1976 with the ‘Full Employment and Balanced Growth Bill.’  Both of these bills, 1946 and 1976, show tremendous influence from Keynes and his theories of being able to spin into prosperity by incurring unsustainable debt.  Sections 2b and 2c of the original bill from 1945 are crucial to understanding the nightmare problem.  In 1945 the legislators declared full employment is possible for all those who desire it, and proposed full employment through federal government spending.  See the problem, especially in the current fiscal cliff negotiations; the Federal Government has become a consumer of goods and exercises a little known principle “Those who pay, control.”  By becoming a consumer of goods and spending money as a customer, the Federal Government can now demand private enterprise obeisance.

Section 3 of the 1945 version of this legislation requires that the president forecasts and writes a budget to increase or decrease spending based upon unemployment numbers and percentages.  The president must forecast spending on a yearly basis to which Congress must then write the underlying legislation as part of the budgeting process.  The president was made directly responsible for the employment of every person in the US who wanted to work, desired to work, was healthy enough to work, and the legislative bodies would produce the needed bills to make it happen.

Flash forward from 1945 to 2012 and the problem is glaringly obvious.  With a disinterested president failing in his legal duties to propose legislation and forecast employment and spending to the House of Representatives and the Senate, a contentious House and Senate that is more interested in internal politics, divisive sound-bites, class warfare and race games, and world economy fluctuating between dead and dying, the problem with this legislation becomes clear.  There is no control mechanism that compensates for the above.  Dictating through top-down government what businesses need to produce and still call it free enterprise is not possible.  The principle of full employment limits choices by forcing people to become employees through inflation, limiting markets, and the over regulation of enterprise.  These laws do not treat people equally because of the definition of employee, which feeds into the description of full employment.  Ranchers, farmers, and other independents suffer because of these laws and the definitions and classifications of the term ‘employee’ and ‘employment’ including ‘self-employment.’  Making the Federal Government a consumer has failed to provide true economic freedom and prosperity.

The nightmare of compensatory finance, as established by Keynes, is the main problem facing America today.  These two little known bills continue to rob America of greatness, steal future generations of prosperity through debt, and keep the Federal Government wasting tax dollars on frivolous projects.  Full employment is a worthy goal, but it is not obtainable due to the following reasons:  Federal Government spending into debt just to buy goods not used; Federal Government spending simply to keep unemployment numbers low; or Federal Government spending to soften financial cycles, all of which are unerringly wrong.

© 2012 M. Dave Salisbury

All Rights Reserved

References

Barro, R. J. (2011, August 24). Keynesian economics vs. regular economics. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424053111903596904576516412073445854.html

Sanotini, G. J. (1986). The employment act of 1946: Some history notes. Federal Reserve Bank of St. Louis.

Scitovszky, A. (1946). The employment act of 1946. Social Security Bulletin,