Re the below (and thanks Michael for posting it):
- a fine example of capitalism:
- more work from fewer people for less money
- less value to more people for more money
Anyone wonder why I'm a co-operative socialist?
hugs
john
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>From: "Michael Gurstein" <[EMAIL PROTECTED]>
>To: "futurework" <[EMAIL PROTECTED]>
>Subject: Fw: Making Millions off the Homeless
>Date: Tue, Aug 29, 2000, 4:14 AM
>
>
> ----- Original Message -----
> From: radman <[EMAIL PROTECTED]>
> To: <[EMAIL PROTECTED]>
> Sent: Monday, August 28, 2000 12:57 PM
> Subject: Making Millions off the Homeless
>
>
>> Company Criticized for Making Millions Off Homeless Laborers
>> Sunday, August 20, 2000
>>
>> BY PEGGY ANDERSON
>> THE ASSOCIATED PRESS
>> TACOMA, Wash.
>> Labor Ready made more than $850 million last year linking unskilled
>> worker -- often homeless men in desperate straits -- with small businesses
>> desperate for no-hassle part-time help.
>>
>> But what exactly are they profiting from?
>> "Labor Ready is making all that cash off the homeless," says Larry Geo, 40,
>> interviewed at a Seattle tent city of homeless people.
>> The Tacoma-based company, which operates 839 "stores" in 50 states, Canada
>> and the United Kingdom, takes heat from unions and homeless advocates for
>> exploiting those with no skills, no prospects and nowhere else to turn.
>> "They take too big a cut," added James Fradenburg, 43, like Geo a potential
>> member of Labor Ready's work force of low-income urban men.
>> The company takes at least 30 percent of incoming wages to cover workers'
>> comp insurance costs, payroll taxes and other deductions and overhead, says
>> its general counsel, Ron Junck.
>> But defenders say Labor Ready brings order and accountability to the
>> marketplace.
>> "Welcome to the real world," says Christopher Jenks of Harvard University,
>> author of The Homeless. "This is called capitalism."
>> Founded in 1991, Labor Ready went public in 1996, becoming the day-labor
>> equivalent of a fast-food chain. Business boomed, and its stock hit a high
>> of $23 last summer. The Utah office is located in Kearns.
>> There have been some missteps since then founder Glenn Welstad has resigned
>> and shares these days fetch $4 to $5. But the company has opened more than
>> 150 new stores since January.
>> For client companies, Labor Ready takes the risk and the paperwork out of
>> hiring from a high-risk labor pool.
>> Many customers "are probably not making enough money to hire a full-time
>> person," says analyst Jeanne Ernst with First Security Van Kasper in San
>> Francisco. "It's probably a godsend to have somebody come in for two hours"
>> or a couple days a week.
>> Advocates for the homeless worry Labor Ready is part of a
>> contingency-worker trend that could create a permanent underclass with no
>> job security, no health insurance and few rights.
>> "People who are homeless need jobs that pay living wages," said Barbara
>> Duffield at the National Coalition for the Homeless.
>> Labor Ready "is an interim kind of measure that grows and becomes the
>> answer, and then people don't look at the long-term answer," she said.
>> But Junck counters that workers typically work for Labor Ready just 100
>> hours before they move on often to "full-time employment they've landed
>> through working with us."
>> The company has organized what used to be street-corner operations with no
>> worker protections, said analyst Karan Sodhi with Stephens Inc. in Boston.
>> "They're performing a valuable service."
>> But Labor Ready is being sued over the cash-dispensing machines at the
>> heart of its "work today, paid today" slogan.
>> Workers pay a $1-and-change fee to use the machines a worker who earns
>> $38.57 takes away $37. They can also be paid by check, but that is
>> problematic for those without addresses or bank accounts.
>> The company's 10-K filing with the Securities and Exchange Commission (SEC)
>> characterized the fees as insignificant, but they brought in $7.7 million
>> last year.
>> "The machines are . . . a convenience for our workers," Junck said.
>> The Atlanta lawsuit over the machines is one of several salvos fired by
>> the AFL-CIO's Building and Construction Trades Department.
>> The union agency, which holds 515 Labor Ready shares, also accuses the
>> company of "seriously misleading statements" to the SEC.
>>
>> The typical Labor Ready customer wants two temporary workers.
>> The typical daily payout is less than $50.
>> But it adds up. The company had 254,000 customers in 1999 and filled 6.5
>> million work orders.
>>
>> "Last year we employed 700,000 workers," Junck said virtually all earning
>> more than the $5.15 minimum wage.
>> As the employer of record, Labor Ready handles government paperwork and
>> even safety training through videotapes when warranted. The company tracks
>> offices and workers by computer. No-shows and substance abusers are
>> blackballed systemwide.
>> Labor Ready represents "in some sense the privatization of employment
>> offices" without the accountability required of public agencies, says Cathy
>> Ruckelshaus at the National Employment Law Project in New York.
>> There have been growing pains.
>> A 1999 purge of middle managers about 300 account
>> representatives who hustled prospective clients undermined morale and
>> growth, Ernst said, though "for several quarters they were performing above
>> expectations" as a result of the cuts.
>>
>> Then there was Welstad's unauthorized $3.5 million loan from the company to
>> meet a margin call and prevent further decline of its stock. The move
>> prompted his June resignation as president and chief executive officer.
>> "They were very lucky they had Dick King in place when that happened,"
>> Ernst said, referring to Welstad successor Richard King, former president
>> of the Albertson's grocery chain, hired in May.
>> Ernst rates the company a hold.
>> "While the economics of their business are compelling, I'm not totally
>> convinced they can get back where they were," she said.
>> With a 4 percent unemployment rate, "even people with very low skills can
>> get full-time jobs."
>>
>> Sodhi gives Labor Ready a neutral rating, concerned that "they grew a
>> little faster than they could manage."
>>
>> Copyright 2000, The Salt Lake Tribune
>>
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