Unemployment

“For these companies the penalties are pocket change”

Pressure to settle cases means that the Occupational Safety and Health Administration collects less than half the fines it levies. But the real cost comes in worker health and safety.

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After an explosion tore through a sugar refinery in Port Wentworth, Ga., this February, killing 14 workers and injuring 40, the federal government’s Occupational Safety and Health Administration acted swiftly, announcing an $8.8 million fine against Imperial Sugar for not protecting workers against the hazards of combustible dust. The proposed fine, disclosed in July, is the third highest in the agency’s 37-year history. But if that same history is a guide, OSHA will end up collecting half that much money, or less.

ProPublica reviewed the agency’s previous 25 highest announced penalties. In 19 cases, the fines were sharply reduced after appeals and negotiations, dropping an average of 65 percent. Three others were settled the day they were announced after closed-door talks between the agency and companies. Three remain open. Citations for “willful” violations, which can bring criminal prosecution, were frequently adjusted to lesser charges that carry only civil penalties. Some cases plodded through the system; five dragged out for more than a decade. The reduced penalties are the end result of a system that emphasizes reaching settlements — settlements often proposed by OSHA itself, rather than the company under scrutiny.

An OSHA official told ProPublica that the agency’s impact on workplace safety cannot be calculated in the fines it collects. “When we issue a big penalty and a press release, that has an impact above and beyond the company,” said Richard Fairfax, OSHA’s director of enforcement programs. “Most employers are going to look at that and go back and say, ‘Let me see what I’m doing at my place.’”

Bob Leclerc, compliance manager at Maine Contract Farming, a Maine agricultural company with three OSHA citations in the past five years, seconds the idea that the very announcement of a penalty is a form of punishment. “Most companies are concerned with their public image,” Leclerc said. “Everyone and their mother see your company screwed up.”

But what Fairfax paints as sound policy, ex-OSHA officials and former Labor Department lawyers portray as weaknesses in the department’s legal arm, the solicitor’s office, that have persisted through Democratic and Republican administrations. These officials said department lawyers were overworked, overmatched and sometimes just afraid to stand up to companies that appealed citations, choosing instead to sharply reduce the proposed penalties. When labor attorneys did defend the agency’s findings, the cases often languished before the Occupational Safety and Health Review Commission, a panel of political appointees that has the final word on such cases short of federal court.

“The hard facts are that the department is understaffed,” said J. Davitt McAteer, Labor’s acting solicitor from February 1996 to December 1997. The system “tends to foster settlements and tends to diminish penalties on sometimes quite dubious grounds.”

The case of Donald Smith, a millwright at a General Motors car plant in Oklahoma City, is typical, say former OSHA officials and Labor Department lawyers. Smith was repairing a piece of machinery on the morning of April 4, 1991, when a lift table suddenly turned on, crushing his head and killing him instantly.

Shortly before his death, Smith had asked a supervisor to point out the machine that needed repair, a piece of equipment he was unfamiliar with. According to documents filed in the ensuing health and safety case, the supervisor quoted Smith as saying, “I thought that was it, but wasn’t sure. I didn’t want to get my damned head caught in that thing.” OSHA investigated the death and in September 1991 proposed a $2.78 million fine on the company for 57 violations, mostly regarding so-called lockout/tagout rules that require companies to shut down equipment and ensure the machinery can’t turn back on while workers are doing maintenance.

The case was so egregious, the Department of Labor also referred it to the Department of Justice for criminal prosecution, said Terry Goltz Greenberg, a Labor Department lawyer from 1988 to 1995. The Justice Department declined to pursue the case.

G.M. contested the OSHA fines and citation and took its case to an administrative law judge who ultimately concluded that while the plant had procedures for safe maintenance, they hadn’t been followed. The judge ruled that workers had not been properly trained to secure machines under repair. In April 1994, he reduced the fine to $1.95 million.

Both GM and the Department of Labor appealed the decision and the case went to the Occupational Safety and Health Review Commission, where it sat. And sat. In December 2007, more than 16 years after Smith died, the commission finished reviewing the case. In the end, less than half of the proposed violations remained — 26 of 57 — and the fine dropped 75 percent to $692,000.

G.M. declined to comment on the case.

Delays like those in the Smith case can have an unfortunate side effect: Employers are not required to “abate” potentially dangerous conditions until the case is decided. (In the Smith case, G.M. did address the safety issue as the case was being appealed.)

“Employers can rely on delay,” said Stuart Weisberg, who was appointed to the review commission by President Clinton and served from February 1994 to December 2000 as a member and its chairman. “An employer knows: ‘I don’t have to abate this violation until there’s a commission decision.’”

Horace “Topper” Thompson, the current chairman and a Bush administration appointee, declined to discuss specific cases but said he agreed with critics who contend appeals take too long.

“It’s very frustrating to everyone who is involved with OSHA,” he said. “When a case takes this long to come out, abatement is stayed, payment of the fine is stayed, establishment of the principle is stayed until you can get the decision out.”

How does this happen? Labor Department lawyers say they often try to settle cases to assure that workplace safety is improved immediately. Of the top 25 proposed fines, 19 were resolved within two years of the initial citation. Several current and former OSHA officials as well as former Department of Labor attorneys said this reflects a preference to eliminate health and safety hazards rather than haggle over fines. “The settlement becomes a way to resolve a backlog,” said McAteer, the former acting solicitor.

“The theory is, you get safety and health (improvements), and the employees would be protected, which is more important than the money,” said Benjamin Mintz, who was appointed by President Nixon as OSHA’s first associate solicitor for occupational safety and health and served from 1971 to 1981.

But it’s the Department of Labor’s own lawyers, who defend OSHA’s cases on appeal, who are often the ones who reduce the penalty, working with companies on settlement agreements. OSHA proposed $135 million in fines in 2007, according to figures from the Department of Labor. That number has so far been reduced to about $87 million and could be reduced even further as open cases are settled or appeals finish. (The bulk of fine reduction is through settlements as opposed to administrative court decisions, former agency officials said, although an exact breakdown was unavailable.)

On occasion, OSHA has worked out settlements so that the citation and its resolution were announced simultaneously. In two instances, the agency disclosed at the same time both the proposed fine and the lesser amount negotiated by the agency and company that would actually be paid. In three other cases, the agency announced a penalty that had been worked out behind closed doors.

Union officials questioned what incentive companies have to fix hazards when the fines — arguably small as compared to many companies’ bottom lines — are reduced so much that companies can afford to get hit again and again, sometimes for the same unsafe conditions. “For these companies the penalties are pocket change,” said Eric Frumin, health and safety coordinator for the labor federation Change to Win.

The largest fine in OSHA history, like several others that made up the top 25, was followed by repeat offenses. A $21.4 million levy against British Petroleum was unveiled in September 2005 after a Texas City explosion killed 15 and injured more than 170. (The agency did not say whether it had sought a larger amount; the fine was more than twice the previous record.)

Follow-up inspections of BP led to additional citations and more fines including a 2007 penalty for “hazardous conditions similar to those that led to the tragic March 2005 explosion,” Dean McDaniel, OSHA’s regional administrator in Dallas, was quoted as saying in an agency press release.

In a statement to ProPublica, BP wrote: “Workplace injuries, environmental incidents and fines are not and have never been an acceptable ‘cost’ of doing business at BP.”

In 1991 OSHA fined the McCrory Corp. $3.2 million after a mall fire killed two and injured 28. In 1993 the agency settled the case for $500,000. Just one year later, in an inspection at one of the company’s other stores, OSHA found fire safety violations and fined McCrory $53,500. The company went out of business in 2001.

The Department of Labor refused to let us interview anyone now in the solicitor’s office. It did, however, offer a brief statement saying that the department’s lawyers are committed to “obtaining strong settlements that protect the health and safety of workers.”

Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce, said it’s normal for regulatory agencies to husband resources and settle cases. “Like any other enforcement agency, [OSHA] has an interest in coming across as aggressive,” Freedman said. “Just because you go after the largest penalty possible doesn’t mean the largest penalty is necessarily appropriate.”

The pressure to settle cases and reduce penalties is built into the system, former department officials say. A company contesting a citation can historically expect to get some relief by appealing to an administrative law judge and officials said this pushes them toward a negotiated outcome.

“These administrative law judge decisions tend to drive down the value of the penalties and the solicitor’s office is not blind to this effect,” said former acting solicitor McAteer.

If a company, the Department of Labor or both don’t like the judge’s ruling, they can petition the Occupational Safety and Health Review Commission for review. The commission is a three-member, politically appointed body that typically reflects the preferences of the administration in power. The commission has had a hand in reducing several of the high-profile cases.

Stuart Weisberg, a Democrat appointee who served on the commission, including a stint as chairman, for more than six years, said in an interview with ProPublica that the commission has “an institutional problem.” While the commission that reviews mine safety cases has five members, the Occupational Safety and Health Review Commission only has three and it is not uncommon for the commission to have vacant seats. When there are only two members, the commission can’t make any decisions unless the commissioners agree — which doesn’t always happen if one is a Republican and the other a Democrat. Sometimes the commission only has one member and can’t act at all without the required two-member quorum.

Weisberg served for a stretch from November 1997 until November 1998 as the only member on the commission while President Clinton and the Republican-controlled Congress disagreed on nominees.

“The biggest decision was, ‘Where do I go for lunch today?’” Weisberg said.

As a result of such problems, it’s not uncommon for the commission to have a backlog of cases that grows or shrinks depending not just on the number of petitions for review but also on its ability to act. The commission started fiscal year 2001 with a 10-year high of 88 cases pending. The commission started 2008 with a 10-year low of 25 cases pending. Despite the apparent reduction in pending cases, the commission has had a hard time closing the more complex, often controversial cases. In fiscal year 2007 the commission only disposed of 32 percent of cases that were at least 2 years old, a slight increase from 22 percent in 2006, according to the agency’s annual performance report.

Bob Julian was working on the line at Dayton Tire in Oklahoma City, a subsidiary of Bridgestone Firestone Inc., on Oct. 19, 1993, when a tire assembly machine suddenly turned on. Investigators told his widow, Phyllis Julian, that he had probably placed a tool on top of the machine while he was working and that it must have fallen, hitting the on switch. Julian’s death prompted a massive OSHA investigation and what at the time was the third-highest proposed fine in history, almost $7.5 million for 107 willful violations of lockout/tagout standards — regulations that protect workers from machinery accidentally turning on during maintenance.

Then Secretary of Labor Robert Reich flew to Oklahoma City to announce the citations. But like many companies OSHA hits with large penalties, Dayton Tire appealed. In 1997 an administrative law judge reduced the fine to $518,000 — a 93 percent reduction. Both the company and OSHA appealed the decision to the Occupational Safety and Health Review Commission. More than a decade has passed since that appeal — almost 15 years since Bob Julian’s death — and the case is still under review. The case has even outlived the plant, which Bridgestone Firestone closed in late 2006.

“It bothers me to think they let it go and go and go,” Phyllis Julian told ProPublica when informed OSHA’s case against Dayton Tire was still open. “It’s just hard for me to believe.”

In a statement, Bridgestone Firestone pointed to the judge’s reduction of the fine as proof the case against the company has no merit.

“The Occupational Safety and Health Review Commission’s Administrative Law Judge heard the case in 1995, and we believe it’s important to note that the (judge’s) 1997 ruling substantially rejected OSHA’s original misguided allegations and reduced the proposed penalties by more than 90 percent,” according to the statement. “We have believed from day one that there is no merit to this (case) and continue to believe this more than 10 years later.”

Another case, against E. Smalis Painting Co., in which OSHA found the company had exposed employees working on the Tarentum Bridge in Pennsylvania to high levels of lead, is still under review more than 14 years after the agency proposed a $5 million fine.

No case should take more than three or four years to decide, said Weisberg, the former commission chairman.

“If the case has been open for more than 10 years it’s inexcusable,” he said.

But that doesn’t mean the Dayton Tire or E. Smalis case will be decided any time soon. The commission has had a vacant seat since April 2007. Commission chairman Horace “Topper” Thompson is a Bush appointee, while Thomasina Rogers was first appointed to the commission by President Clinton.

“The fact of the matter is, no decision can be issued when there’s a two-member commission unless they agree on all of the facts and all of the law,” Thompson said. “There are other cases that are pending that are more likely to reach consensus and those are the ones we’re focusing on.”

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OSHA levied its highest fine in history against a service sector company in August 2007 when the agency proposed a $2.78 million fine against Cintas, the nation’s largest industrial launderer, after a worker cooked to death inside a giant clothes dryer. OSHA cited the company for 45 violations including 42 willful violations mostly related to instances where employees climbed on moving machinery to clear jams as opposed to shutting down the system and slowing work. That case led to a flurry of media coverage, congressional hearings and a host of new OSHA inspections — and citations for similar hazards — of Cintas plants around the country.

Now labor leaders expect the agency to settle with Cintas before the end of the year. Current OSHA officials refused to comment on ongoing settlement discussions in an open case. Heather Trainer, Cintas’ corporate communications manager, could only confirm that the company has been working closely with OSHA.

“We look forward to working with them to further improve our safety record,” Trainer said.

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Robert Lewis is a Bay Area-based freelance reporter. His work has appeared in such news outlets as ProPublica.org, ABCNews.com, ABC's "20/20," and the San Francisco Chronicle, among others.

Whitman’s lesson for Romney

Layoffs at Hewlett-Packard show why business leaders aren't automatically a good fit for the White House

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Whitman's lesson for RomneyMitt Romney and Meg Whitman (Credit: AP/Chris Carlson)

When Meg Whitman ran for governor of California in 2010, the former eBay CEO told voters that her business background made her the right choice to boost job creation in a state troubled by high unemployment. Sound familiar? It’s the same spiel we hear from Mitt Romney every single day.

As a consolation prize for getting clobbered by Jerry Brown in the gubernatorial election, Whitman landed a plum job of her own — CEO of Hewlett-Packard, a company that, like California, has been going through some tough times. But this week Whitman made clear that as a business leader, her approach to job creation doesn’t quite mesh with her political promises. Multiple media outlets are reporting that HP is planning to cut its workforce by around 30,000 jobs — a number that accounts for 7-8 percent of HP’s total workforce.

Whitman’s decision will probably result in some layoffs in California, but it wouldn’t be fair to label her an outright hypocrite on the basis of this strategy alone. Downsizing may well be the right course for Hewlett-Packard, which is having a hard time adjusting to an era where computing is moving to the smartphone and leaving the PC far behind. But there’s a data point in the New York Times’ report on the layoffs that deserves close attention: “China, which is one of H.P.’s highest growth areas, will probably be spared.”

Again, this makes strict bottom-line sense. Hewlett Packard, by its own admission, now derives around 60 percent of its revenues from overseas. China is the world’s fastest-growing market for computer gizmos. Cutting staff in China would be suicidal. And HP’s behavior is in no way extraordinary. In April, the Wall Street Journal reported that between 2009 and 2011, fully three-quarters of the new jobs created at the 35 largest U.S. multinationals were overseas. And this isn’t just about offshoring to cheaper labor. Overseas is where the demand is.

The job creation plan outlined by Whitman when she ran for governor included cutting red tape, lowering various government fees, and tax breaks. Again, it’s an agenda that maps quite closely to Romney’s — and that’s no accident: Whitman was Romney’s finance chair during his 2008 campaign, and hosted a California fundraiser for him in March. But while cutting regulations may boost corporate profits,  it doesn’t do a darn thing for boosting demand. HP is probably more likely to take the money saved via a tax break and spend it on a new R&D center in Shanghai than it is to staff up in Silicon Valley.

All of this explains why having an illustrious business resume doesn’t mean that one is automatically qualified to occupy the White House in a time of economic stress. Business executives have a mandate to act in their own self-interest — to seek profit by any means, including  downsizing in the U.S. and pouring resources into China. That’s why HP’s “Government Affairs” page stresses its support for ” free trade and the reduction of barriers across borders,” even in the face of growing evidence that outsourcing to China has a negative impact on U.S. job creation.

A political leader is supposed to think in terms of the larger public interest — which means things like figuring out how to fund education or pay for the social welfare net that protects the unemployed and feeds the hungry. California’s voters figured that out when they rejected Whitman. Once again, it will be interesting to see where the general public at large comes down in the case of Romney.

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Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

David Brooks, “structuralist”

The New York Times moderate says the welfare state is unsustainable, and buys himself a new $4 million home

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David Brooks,

David Brooks is everything that’s wrong with elite opinion in America. The president reads him and takes him seriously. That is why the opinions of venal faux “reasonable” clowns like Brooks matter. Brooks today sums up the new argument for not actually doing anything to alleviate worldwide unnecessary hardship: The problem is “structural,” not “cyclical”!

Long Op-Ed short, Brooks says “cyclicalists” (unnamed) think we should deficit-spend our way to prosperity, because, according to Brooks, they believe that “the level of government spending is the main factor in determining how fast an economy grows.” (No one actually believes this.) But according to Brooks, all of our problems are “structural,” which is to say that the reason we have mass unemployment and debt and growing wealth disparity is because of “technological change” and crappy schools. And “special-interest deals” in the tax code.

The point of the Brooks argument is simply to make continued non-action to address actual short-term pressing problems sound serious and wise. He’s not even making a partisan argument, you see. Oh, people on “the left” have been having their silly little debate, but all the serious people — “some on the left but mostly in the center and on the right” — have accepted the sad truth, like Brooks. And Brooks is soberly explaining the situation. He is not at all responding to Paul Krugman, his fellow New York Times columnist, who has lately taken to fiercely rebutting arguments put forth by various unnamed “centrists” and “moderates” in his columns.

This is Brooks’ conclusion:

But you can only mask structural problems for so long. The whole thing has gone kablooey. The current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last. The old model is broken. The jig is up.

It’s so sad, but everyone will now just have to accept that social democracy is an impossibility. We have learned that “the old economic and welfare state model is unsustainable,” so shut up about your unemployment benefits running out and there being no jobs still. (Silly me, here I was thinking the recent massive international financial crisis actually exposed post-industrial capitalism as the “unsustainable” thing.)

Ezra Klein has the rather polite, policy-based response to Brooks’ argument: Essentially that even if Brooks is right about America’s structural problems needing to be addressed, we should still also give poor people money and indebted people relief and spend money on infrastructure improvements to prevent these structural problems from becoming even worse.

Dean Baker has the response in which it is pointed out that Brooks is full of predictable, repetitive shit. The “we have no jobs because of technology and also there are plenty of jobs but unemployed people have the wrong skills” line is as old as the Great Depression and there is no actual evidence for it. It’s just what people who want to sound serious while dismissing efforts to spend money on economic stimulus say.

Hey, let’s check out some recent real estate news at the Washington Post’s Reliable Source blog, for fun. Looks like a Mr. David Brooks just bought himself a $3.95 million home in Cleveland Park!

The New York Times op-ed columnist and wife Sarah are trading up — from their longtime home near Bethesda’s Burning Tree Club to a century-old (exquisitely renovated) five bedroom, four-and-a-half bath house in Cleveland Park. It includes a two-car garage, iron and stone fence, generous-sized porch and balcony, and what appear to be vast spaces for entertaining. The timing seems to have been right: After only a few days on the market, their old place (which also boasts five bedrooms) is under contract for $1.6 million.

Whoops, sorry about your welfare state collapsing, 12 million out of work Americans, but it was just too “unsustainable” to keep you employed — you should all consider developing new skills and trying to find more “productive” work, like writing bullshit columns for the New York Times, maybe.

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Alex Pareene

Alex Pareene writes about politics for Salon and is the author of "The Rude Guide to Mitt." Email him at apareene@salon.com and follow him on Twitter @pareene

Bush vs. Obama: Jobs

During George W.'s first term, big government boosted employment. For Obama, it's the opposite

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Bush vs. Obama: JobsGeorge W. Bush and Barack Obama(Credit: Reuters/AP)

There is a number buried in today’s government labor report that deserves closer examination: 35,000. That’s the net number of private sector jobs created during the Obama administration to date. That’s right, it’s a positive number. After the worst economic disaster to befall the United States in 80 years, that’s a number that maybe we should be applauding. Remember: The private sector hemorrhaged more than 2 million jobs in the first three months of 2009 alone. The hole was deep.

Unfortunately, it’s still a tiny number, and it is dwarfed by a much larger figure: 607,000. That’s the number of public sector jobs — federal, state and local — that have been lost since Obama took office. It’s a story that probably isn’t getting told enough about the Obama administration: Big government keeps getting smaller.

But the real eye-opener comes when we compare Obama’s numbers to George W. Bush’s. In Bush’s first term, the economy shed 913,000 private sector jobs! 913,000! The only thing that saved Bush’s first term from being a complete economic disaster, in terms of employment, was robust public sector growth: The economy added 900,000 government jobs. One wonders: Without the massive growth in the public sector during Bush’s first term, would he have been reelected?

This is interesting for a number of reasons. First, it punches a big hole in the theory that Bush’s tax cuts were responsible for boosting employment during his first term. Let’s also recall that the Bush recession (which he inherited from Clinton) was far, far milder than the near-Depression Obama inherited from Bush. In that context, Obama’s performance resuscitating the private sector has been miraculous. The Washington Post published an article criticizing Obama for not doing enough to resist job losses in the public sector, without fully acknowledging the political impossibility of additional stimulus after the first round, but we haven’t heard all that much over the years about how the growth of government saved Bush’s bacon.

Of course, Obama isn’t running against Bush, so that’s moot. But as this presidential campaign heats up, it might be worth periodically reminding ourselves: Bush led the U.S. economy out of a weak recession with strong public sector growth. Obama is leading the U.S. economy out of a near-death experience while a steadily shrinking government swells the unemployment rolls. Which magic trick do you think is harder?

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Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

Another jobs report downer

The U.S. economy underperforms again in April, creating only 115,000 jobs. You can almost hear Mitt Romney cackle

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Another jobs report downerJob seekers wait in line during a job fair in Portland, Ore., on April 24. (Credit: AP/Rick Bowmer)

The U.S. economy is stuck in spring mud. For the second month in a row, the United States labor market underperformed expectations. According to the Bureau of Labor Statistics, the economy created a lackluster 115,000 jobs in April. The unemployment rate fell one notch, to 8.1 percent, but for a distressing reason: The overall size of the U.S. labor force dropped by 342,000, a sign that hundreds of thousands of Americans simply gave up looking for work in April. The labor force participation rate fell to 63.6 percent, the lowest mark since 1981.

The only good news in the report: The numbers for February and March were both revised upward, from 240,000 to 259,000 in February, and from 120,000 to 154,000 in March. The economy is still growing.  Indeed, over the past 12 months, the U.S has added 1.8 million private sector jobs.

The glum report comes as little surprise. While economic data points were all over the map in April, some key indicators — jobless claims, Wednesday’s ADP private sector labor report, and the first estimate of GDP growth for the first quarter of 2012 — all suggested that the economic recovery that seemed so robust over the winter was losing steam. The numbers aren’t bad enough to justify outright panic; Americans are still lustily buying cars, the manufacturing sector appears strong, and gas prices are dropping steadily for their recent highs  – but it’s still very difficult to see signs of sustained momentum. This is the economy we’ve got right now. We can’t even blame austerity: Government payrolls dropped by only 15,000.

Ironically, on Thursday, Gallup’s presidential approval survey showed Obama at 51 percent, the highest mark he’s received since Seal Team Six took out Osama bin Laden. Conventional wisdom has assumed that Obama’s steadily improving approval ratings tracked the growing economy. If so, it will be interesting to see if those numbers start coming down again.

Mitt Romney, as one might expect, is already on the case. He promptly told Fox News that it was a “terrible job report.” That, strictly speaking, is not true. A “terrible” jobs report is one in which the economy loses half a million jobs or more in a single month — as was the case when Obama took office in 2009. (In fact, economist Justin Wolfers tweeted, April’s jobs report marks a milestone of sorts: Private sector job creation is, for the first time, in positive territory for the entirety of Obama’s term. Since January 2009, the private sector has added 35,000 jobs. The public sector, in contrast, has shed 607,000. So much for Big Government!)

April’s jobs report is disappointing, and could signal worse news to come, but there’s still a decent chance that we are just experiencing a bump in the road. By most measures, the U.S. economy is performing much better than it was a year ago.

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Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

Healthcare’s foreign invasion

Obama risked a trade war with China about manufacturing -- so why isn't he outraged about medical jobs?

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Healthcare's foreign invasion (Credit: gualtiero boffi via Shutterstock/Salon)
This article was adapted from the new book, "Insourced", available May 8 from Dartmouth College Press.

Approximately 15 percent of all healthcare workers and 25 percent of all physicians in the United States were born and educated elsewhere. This means that 1.5 million healthcare jobs are “insourced,” occupied by foreign-born, foreign-trained workers brought into the United States on special visas earmarked for healthcare jobs. This number is 50 percent greater than the total number of jobs in the U.S. auto-manufacturing industry. It’s amazing to consider that in 2008 and 2009, the auto industry, which makes up just 3.6 percent of the U.S. economy, received a $97 billion bailout. If we estimate that each of these 1.5 million insourced healthcare jobs has an average wage of $60,000, that’s $90 billion a year in wages going to people brought into the United States to work rather than training Americans to do the same jobs.

The healthcare industry makes up 16 percent of our economy. Yet even in these days of close to 10 percent unemployment, we do not invest enough money in our young people to train them for jobs in healthcare — an already understaffed industry that will have to serve an additional 32 million people once the provisions of the 2010 health-reform law take full effect. Instead, when faced with pressure from hospitals and nursing homes for more healthcare workers, the federal government grants visas to import nurses, physicians, pharmacists, physical therapists, and many other types of healthcare workers from countries that can ill afford to lose them.

In some U.S. industries, the outcome of globalization is positive or neutral. Take the sugar industry. Due to lower labor and land costs and better weather conditions, it’s far cheaper to grow sugar cane in the Caribbean than sugar beets in North Dakota. As import taxes fall, global transportation improves, and the number of sugar beet farms in the United States declines, more Americans are sweetening their cereal with sugar from Jamaican sugar cane. Americans save money buying cheaper sugar; the economy of the poorer sugar-growing countries improves, lifting thousands of people out of poverty; and the few displaced American sugar beet farmers generally find other work. But sugar is not a strategic commodity. If CARICOM, the Caribbean Community, were to halt sugar exports to the United States, we would experience no crisis. Sugar is not essential to our diet or life, and we have plenty of substitutes, from honey and corn syrup to NutraSweet. If necessary, within a year we could again be producing sugar in the United States.

The U.S. healthcare industry is 200 times larger than the U.S. tire-manufacturing industry, yet President Obama risked a trade war with China, our biggest trade partner, over tires. He was understandably trying to protect well-paying manufacturing jobs for American workers. Yet each year, we bring thousands of nurses from China to work in even better-paying jobs rather than train young people in this country to become nurses. The irony is that the economic costs of “insourcing” healthcare workers, including the loss of jobs no longer available to Americans, are far greater than the costs when we import Chinese tires. In 2003 the Commission on Graduates of Foreign Nursing Schools (CGFNS), a U.S.-based nongovernmental organization that administers the U.S. nursing licensing exam for foreign-trained nurses, opened a testing center in Beijing. The opening of this center initiated a “mushrooming” of new nursing schools in China and led to credible predictions that China will soon surpass the Philippines as the number one source of foreign-trained nurses imported to the United States.

Given the publicity and furor over the loss of manufacturing jobs, the lack of protest over healthcare-worker insourcing is surprising. Congress passed legislation and President George W. Bush signed a law in 2007 to protect the American sock industry from the rival Honduran sock industry. Yes, that’s right: socks. Protecting a few hundred $15-an-hour sock-manufacturing jobs based solely in the small town of Fort Payne, Ala., was worth acting on. Yet insourcing hundreds of thousands of $60-an-hour healthcare jobs has prompted no such similarly high-level response from our leaders.

Instead, on a regular basis, Congress approves and presidents from both political parties sign legislation to enable the legal entry of an ever-increasing number of foreign healthcare workers. Each year, about 20,000 new healthcare-specific visas are issued for these workers.

The United States has traditionally not allowed strategic industries to be outsourced. That’s why the U.S. steel industry and the U.S. car industry have received bailout after bailout. Access to enough steel and automobiles is essential to our economy; without a sufficient supply of each, our economy would be severely damaged. It’s time we acknowledged that the health of the population is just as important as steel and autos in keeping our economy strong. Healthcare is too important to risk continuing to insource it.

It’s not just a matter of protecting and expanding jobs for American workers. Every year, thousands of Americans die, and the health of thousands more is compromised, because of the shortage of healthcare workers in every one of the healthcare professions.

On the surface, insourcing may appear to be a harmless or even win-win solution to the country’s healthcare-worker shortage. The hospital receives a much-needed worker, and the worker escapes life in a struggling country for a better life here. But we should be training more people in this country to work in those professions, especially people from poor and minority communities. Rather than investing in our own people and communities, however, the U.S. government has decided to take the best and brightest workers from struggling countries.

Many foreign-trained healthcare workers, no matter how smart, are not adequately prepared for practice in the fast-paced, high-tech world of U.S. medicine. Whether in operating rooms, hospital wards, or nursing homes, inadequately qualified and poorly oriented foreign healthcare workers endanger the lives of their patients, as well as the lives and careers of their American-trained colleagues.

But the main reason for this country’s rise in unnecessary deaths and delayed care is understaffing — a result of the failure to train and place enough healthcare workers, especially in rural and underserved communities. Americans who live in rural areas make fewer visits to healthcare providers and are less likely to receive preventive care. The infant-mortality rate for African-Americans is twice that for the average American; Latinos are twice as likely as white Americans to die from diabetes. These health disparities are due in large part to a lack of healthcare workers, especially primary-care workers, in their communities. The quick fix has been importing foreign healthcare workers for these unfilled positions. Unfortunately, once these workers fulfill their initial contracts, most move to communities without healthcare-worker shortages; in fact, foreign-trained healthcare workers are more likely to practice in the well-served, major metropolitan areas than their American-trained counterparts.

Even if good foreign-trained healthcare workers were here in numbers adequate to meet our needs, the U.S. healthcare system is about encounter a tidal wave of demand as 78 million baby boomers approach their 60s. Older people make, on average, six visits to a healthcare provider a year, compared with two visits per year for people under 60. The healthcare workforce is aging, too: More than 50 percent of practicing healthcare workers are eligible to retire during the next 10 years, which will leave us with fewer workers to treat more and sicker patients.

In the eyes of employers, of course, insourcing healthcare workers appears to offer many benefits. Most doctors and nurses in developing countries earn a fraction of what American doctors and nurses earn: A Caribbean nurse makes around $1,000 a month; an Ethiopian physician, about $100 a month. Not only are many foreign-trained healthcare workers accustomed to lower salaries and quality of life, but they also carry little or no education debt, while their American-trained colleagues typically graduate with five- and six-figure debt burdens. With average student debt burdens of $155,00011 for newly graduated physicians and $30,375 for nurses, American-trained health workers require a higher salary just to help pay for their education. Trained in a much more hierarchical environment, foreign workers are much less likely to unionize, or even express dissatisfaction with their work. As the percentage of imported healthcare workers increases, their attitudes toward salary and terms of employment undermine the bargaining power of U.S. workers, and even affect the important feedback loop between employees and management.

Polls indicate that 70 to 80 percent of Americans want to reduce the rate of immigration into the United States. Yet the American public is not aware of our policy of using healthcare-worker-specific visas to solve the healthcare-worker shortage.

Some legislators who publicly support stabilizing immigration consistently vote to increase the number of healthcare-worker-specific visas granted each year. It’s not that American citizens don’t want to become healthcare workers and fill these jobs. This distinction is critical, because every industry that has brought in foreign workers has argued that American workers won’t do the work for the prevailing wage, or won’t do the work no matter how high the pay is. In the healthcare industry, this argument does not apply. U.S. citizens want the jobs. They just can’t access the training. The United States does not have enough positions in health-professional schools to meet industry demands.

The tens of thousands of qualified nursing school and medical school applicants who are denied entry to school each year permanently lose out on their chosen careers, work that is consistently ranked in the top tier of salaries, with excellent benefits and almost guaranteed job security. This loss of career opportunity is even greater for rural and minority young people, who are grossly underrepresented in the higher-level health professions, such as physicians and nurses, and overrepresented in the lower-level professions, such as technicians and home health assistants. Something is wrong when so many young Americans are forced to pursue other, lower-paying careers at a time when we desperately need more healthcare providers. In exchange we get foreign healthcare workers who are less well trained (they consistently score lower on licensing exams than U.S.-trained healthcare workers) and far less culturally competent than native-born Americans.

The most tragic and most preventable effect of our hiring so many healthcare workers from other countries is the unnecessary deaths of hundreds of thousands of men, women and children in developing countries. The World Health Organization (WHO) estimates that each year more than 10 million people die needlessly, from easily treatable maladies such as diarrhea, pneumonia, malaria, tuberculosis, vaccine-preventable diseases, and complications of childbirth. The WHO Global Health Workforce Alliance estimates that there are a billion people alive today who will never see a health worker in their lives. In Ethiopia, one in 10 Ethiopian children will die before his or her fifth birthday — yet there are more Ethiopian physicians in the Chicago area than in all of Ethiopia, which, with 80 million people, is the second most populous country in Africa. As their most skilled nurses emigrate to work in U.S. nursing homes, middle-income countries such as Jamaica and Trinidad have nurse-vacancy rates of 60 percent or higher.

Throughout the developing world, nurses, pharmacists, physical therapists, and many other types of healthcare workers are being approached and offered 10 times their salaries to practice in modern U.S. healthcare facilities with state-of-the-art technologies. Even the most dedicated, socially conscious worker would be tempted by such an offer. A colleague of mine relayed a conversation he’d had with the head of the Nursing Council of Kenya, who told him about the damage the exodus of senior nurses was doing to her country’s healthcare system. In the next breath, she confessed that the next time he visited Kenya, she might not be there. She was thinking about emigrating herself.

Our unofficial policy of relying on the world’s poorest countries to pay for the training of workers whom we then entice and bring to this country is devastating healthcare systems around the world. The loss to a developing country when a single physician, representing what may be a significant portion of their total number of physicians, emigrates is far greater than our gain. Our failure to provide education for our own citizens and to better plan for healthcare staffing and distribution does not justify poaching nurses and physicians from the countries that can least afford to lose them. How many additional deaths, how much more needless disability and suffering, will we allow this misguided policy to cause?

And consider American competitiveness. Certain industries are vital to U.S. global leadership. Recognizing their importance, we protect those industries. We don’t allow them to move overseas and make the United States vulnerable to the actions of other countries. Poor farmers in the developing world can certainly grow food staples more cheaply than American farmers do. But because of the strategic importance of the U.S. food supply, we subsidize some basic food crops, such as corn and soybeans.

And yet we are overreliant on foreign healthcare workers to meet our most basic health needs. This is particularly dangerous because many countries, almost completely drained of healthcare workers and tired of subsidizing the U.S. healthcare system, are trying to slam the door shut for emigrating healthcare workers. Meantime, of the world’s wealthiest nations, the United States has the worst health outcomes, with lower life expectancies and higher rates of deaths from preventable causes. In infant mortality, for instance, we rank 27th, behind Poland and Hungary. Our disability levels are higher than in most former Soviet countries.

If the United States is to remain competitive in the global economy, we need a healthy workforce. In order to achieve that, we need a healthcare workforce made up of adequate numbers of properly trained physicians, nurses, pharmacists, community-health workers, and other healthcare providers.

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Dr. Kate Tulenko is a physician with degrees from Harvard University, Cambridge University and the Johns Hopkins School of Medicine. The former coordinator of the World Bank's Africa Health Workforce Program, she currently serves as director of clinical services for a global health nonprofit.

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