CPD IN THE NEWS

Christine Knapp had been on maternity leave for nearly three months, but on Wednesday the director of the mayor’s Office of Sustainability hoisted a diaper bag on her shoulder, packed her 11-week-old daughter, Sabine, into a stroller, maneuvered into a creaky elevator in City Hall, and rode up to the mayor’s reception room. This was just too important to miss.

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BeyondChron - March 14, 2013, by Christina Livingston - When it comes to foreclosing on Californians, it looks like Wells Fargo may take the prize. According to a report released this week, Wells Fargo is responsible for more homes in the foreclosure pipeline in California than any other single lender.

Wells Fargo is servicing the most loans, but they are providing less principal reduction to struggling borrowers than either Bank of America and Chase – who themselves should be doing more! Wells Fargo trails behind Bank of America and Chase when it comes to the amount of principal reduction given with first lien loan modifications, according to the Monitor of the multi-state Attorneys General settlement with the five big mortgage servicers.

This is the very same Wells Fargo that just had its most profitable year ever in 2012, with earnings of $19 billion.

The report, California in Crisis: How Wells Fargo’s Foreclosure Pipeline Is Damaging Local Communities, by ACCE (Alliance of Californians for Community Empowerment), the Center for Popular Democracy and the Home Defenders League, shows the harm coming to homeowners, communities and the economy unless Wells Fargo reverses its course and averts some or all of the impending foreclosures.

Click here to download the report.

The report uses data from Foreclosure Radar to look at loans currently in the foreclosure pipeline in California – meaning loans that have a Notice of Default or Notice of Trustee Sale. Of the 65,466 loans in the foreclosure pipeline, close to 20% of them are serviced by Wells Fargo.

If Wells Fargo’s 11,616 distressed loans go through foreclosure, California will take a next $3.3 billion hit: Each home will lose approximately 22 percent of its value, for a total loss of approximately $1.07 billion; homes in the surrounding neighborhood will lose value as well, for an additional loss of about $2.2 billion; and government tax revenues will be cut by $20 million, as a result of the depreciation.

And not surprisingly, African American and Latino communities will be particularly hard-hit. The report includes maps for seven major cities showing minority density and dots for each of Wells Fargo’s distressed loans. In city after city, they are heavily clustered in neighborhoods with high African American and Latino populations.

“My community has been absolutely devastated by the foreclosure crisis, and I put a lot of the blame at the doorstep of Wells Fargo,” says ACCE Home Defenders League member Vivian Richardson. “Wells Fargo’s heartless and unfair foreclosure practices are sending far more homes into foreclosure than is necessary.”

“Our communities and our entire State are still reeling from the housing crisis, and will be for years to come,” said San Francisco Supervisor David Campos. “As this report shows, the numbers of homes still facing foreclosure is enormous. Principal reduction is clearly a critical strategy for saving homes and stabilizing the economy. Wells Fargo and the other major banks should be doing more of it.”

The report recommends:

1. Wells Fargo should commit to a broad principal reduction program.  This means that every homeowner facing hardship should be offered a loan modification, when Wells has the legal authority to do so. The modification should be based on an affordable debt-to-income ratio, achieved through a waterfall that prioritizes principal reduction and interest rate reductions. Junior liens must also be modified.

2. Wells Fargo should report data on its principal reduction, short sales, and foreclosures by race, income, and zip code.  Wells Fargo must be more transparent about its mortgage practices. The bank has an egregious history of harming California’s African American and Latino communities through predatory and discriminatory lending. To show the public that it has reformed, Wells Fargo must make this data available. The people of California need to know that Well Fargo is no longer discriminating against people of color and is fairly and equitably providing relief to homeowners and to the hardest hit communities.

3. Wells Fargo should immediately stop all foreclosures until the first two demands are met In the event that it takes a few months to set up a fully functioning principal reduction program, Wells Fargo needs to immediately stop all foreclosures. Wells Fargo has done enough harm. It’s time to stop. California deserves a break.

ACCE is waging a campaign to push Wells Fargo to be a leader in California, their home state, in saving homes – beginning with their performance to comply with the Attorneys General Settlement and with the Homeowner Bill of Rights, but not ending there.

Click here to sign on to a letter to Wells Fargo CEO John Stumpf to support the campaign demands. 

Author info: Christina Livingston is the Executive Director of the Alliance of Californians for Community Empowerment. ACCE is a multi-racial, democratic, non-profit community organization building power in low to moderate income neighborhoods to stand and fight for social, economic and racial justice. ACCE has chapters in eleven counties across the State of California. For more information visit http://www.calorganize.org/ or follow ACCE on twitter@CalOrganize

 

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CBS MoneyWatch - September 26, 2014, by Alain Sherter - Liberte Locke, a 32-year-old "barista" at a Starbucks (SBUX) in New York City, is fed up.

"Starbucks' attitude is that there's always someone else can who can do the job," she said in running through her complaints about life at the java giant.

If that isn't necessarily the consensus among Starbucks workers, interviews with nine current and former baristas at the company make clear it's not an isolated opinion, either. Even those who say they like their job paint a picture of a business that underpays front-line workers, enforces work rules arbitrarily and too often fails to strike a balance between corporate goals and employee needs.

Of course, such complaints are nothing new in retail, where low pay and erratic schedules are the norm. But by its own account, Starbucks is no ordinary company and is ostensibly a far cry from the fast-food outlets now facing a nationwide uprising by employees tired of working for peanuts.

That's evident in the company's recruitment pitch. Starbucks invites job-seekers to "become a part of something bigger and inspire positive change in the world," describing it as a chance to discover a "deep sense of purpose."

Damage control

That image suffered a serious blow last month after The New York Times vividly chronicled a Starbucks worker struggling with the company's scheduling practices. The story, which centered on a 22-year-old barista and single mother, amounted to a public relations nightmare for Starbucks. Perhaps not coincidentally, within days of the story's publication top executives were promising reform.

In a memo to employees earlier this month, for instance, Chief Operating Officer Troy Alstead vowed to "transform the U.S. partner experience," referring to Starbucks' more than 130,000 baristas. Inviting worker feedback, he said Starbucks will examine its approach to employee pay, revisit its dress code, make it easier for people to ask for time off, and consider other changes aimed at helping baristas balance work and their personal lives.

Among other changes, the company said it would end the practice of "clopening," when an employee responsible for closing a store late at night is also assigned to open it early in the morning.

"We recognize that we can do more for our partners who wear the apron every day," he wrote.

Some baristas did not feel this August memo from Starbucks went far enough in proposing ways to improve work conditions, so they marked it up with their own ideas.

Although Starbucks workers welcome this pledge to respect the apron, they fear the company is more intent on dousing the PR flames than on genuinely improving employees' experience. After the retailer last month sent an email to workers outlining possible solutions to the kind of scheduling problems and related issues detailed by the Times, a group of baristas gave the proposal a C- and posted online a marked-up version of the memo listing their own demands (image above).

"We hope you're ready for a commitment to give us schedules that don't mess with taking care of kids, going to school or holding onto that second job we need because Sbux wages don't make ends meet," wrote the baristas, who are working with a union-backed labor group, the Center for Popular Democracy.

Retail jungle

Despite the recent media focus on Starbucks, the company's labor practices are generally no worse than those of many large retailers. In some ways they're better, with the company offering health care to part-time, as well as full-time, workers; unusually generous 401(k) matching contributions; annual stock grants to employees; and tuition reimbursement.

Starbucks highlights such benefits as an example of its commitment to employees. "Sharing success with one another has been core to the company's heritage for more than 40 years," Alstead said in the September memo.

Meanwhile, some baristas say they enjoy their work and feel valued by Starbucks. "It's a decent place to work, and my manager and co-workers are great," said one employee who asked not to be identified.

But other current and former workers claim Starbucks has changed in recent years, saying that corporate leaders' intense focus on slashing costs has short-circuited its professed commitment to workers. Mostly, they say Starbucks doesn't listen to employees and even punishes those who identify problems.

"The biggest problem is that baristas don't have a voice," said Sarah Madden, a former Starbucks barista who left the company this spring after two years with the coffee vendor. "They can't speak to issues that they know exist. Workers know how to fix them, but when [they] speak up there are serious repercussions -- your hours get cut, you're transferred to another store or isolated from other people."

Employees interviewed for this article said one result of Starbucks' cost-containment push is that stores are frequently understaffed, hurting customer service and forcing managers to scramble to find staff. That problem is common across the big-box stores that dominate the retail sector, experts said.

"One the one hand, retailers overhire, but they're also understaffed, so everybody's running around and then there aren't enough people on the floor," said Susan Lambert, a professor at the University of Chicago and an expert in work-life issues. "Companies are effectively loading all the risk onto workers so that they're not the ones incurring the risks inherent in business."

Starbucks denies that its stores are short-staffed. "We're proud of the level of service we provide in our stores," said Zack Hutson, a spokesman for the company. "We know that the connection our partners have with customers is the foundation of the Starbucks experience. It wouldn't be in our best interest. We want our customers to have the appropriate service level when they come to our stores."

To be sure, Starbucks is hardly the only U.S. corporate giant to keep a gimlet eye on its bottom line -- among Fortune 500 companies that approach to management is the rule, not the exception, and CEOs across the land defend it as an inviolable fiduciary duty to shareholders.

But baristas say Starbucks' focus on profits and cost-cutting has increasingly led its leadership to tune workers out. Locke, who has worked for the company since 2006 and who earns roughly $16,000 a year, said she yearned for the Starbucks of old.

"When I started they had a training program and taught you how to be a coffee expert. There was more of a culture of supporting each other as co-workers. Store managers were sympathetic. I really enjoyed it."

Asked why she stays at Starbucks, Locke said her employment options are limited because she lacks a college education and because her only professional experience is in retail.

Living wage?

According to workers, the best thing Starbucks can do for its apron-wearers is to raise their pay and offer full-time hours instead of the 20 to 30 hours that most employees work.

Samantha Cole, a barista in Omaha, Neb., said she struggles to get by on her supervisor's salary of $11.25 an hour. Such pay may be better than what she would earn working for other retailers, but the 30-year-old mother of two say it's still not a living wage.

"I'm definitely not making enough money," said Cole, who has been with the company for six years. "A lot of us are right there with what fast-food workers are making."

Such frustrations are also evident in comments on the Facebook page Starbucks uses to communicate with employees and where it is asking baristas for input regarding the company's labor practices. Wrote one employee: "I've worked for the company for 7 years in January, and I don't make enough to support myself on one job so I work 2 jobs, 6 days a week.... I've seen a lot of amazing partners leave because they don't make enough."

Starbucks declined to disclose compensation data, citing competitive reasons and saying that pay varies widely according to workers' experience and where in the U.S. stores are located. It didn't respond to emails requesting clarification regarding other aspects of its labor policies.

It's worth noting that low pay isn't unique to Starbucks -- in retail it is the norm. As of 2012 (the latest year for which data is available), the median hourly income for retail salespeople is $10.29 per hour, or $21,410 a year, according to the Bureau of Labor Statistics. Hourly pay for full-time retail workers range from a high of $14.42 to $9.61 for lower-paid people, according to Demos, a liberal-leaning think tank in New York. Part-timers typically make much less, with the average cashier earning $18,500 a year.

"Until [Starbucks] gives a living wage to every employee, they can't claim to be a good employer," Locke said, who added that it has been roughly two years since her last pay raise.

"Race to the bottom"

Another priority for baristas: stable, regular schedules. Like most large retailers, Starbucks uses scheduling software to try to match the number of workers it has in a store at any given time to the amount of business it gets. Workers also may be scheduled according to the sales they generate or their facility in promoting certain products. The technology also can enable other savings, such as limiting overtime.

For employees, however, that approach -- known as "just-in-time" or "on-call" scheduling -- often results in lower income and chaotic hours.

Stephanie Luce, a professor of labor studies at City University of New York's Murphy Institute, characterizes the widespread adoption of scheduling and so-called workforce optimization technologies as a "new race to the bottom."

"Companies that have already reduced operating costs by making deals with irresponsible subcontractors and using the cheapest available materials are now cutting corners in the form of the 'just-in- time scheduling' of their workforce," she and her co-authors wrote in a recent report. "These 'lean' manufacturing practices take advantage of sophisticated software and an increasingly desperate workforce to cut labor costs to the bone."

By the same token, tighter control of worker schedules helps Starbucks contain payroll costs. But it also means employees who had expected to work a certain number of hours every week can see their schedules dramatically cut back and fluctuate wildly. The result? Smaller paychecks and a disturbance to family life.

"It makes it very hard for parents to participate in an intimate family routine and structure it in such a way that experts agree is good for children," Lambert said.

Irregular schedules also make it hard for workers who do need extra income to work a second job, schedule appointments and plan other aspects of their lives.

Baristas said Starbucks posts their schedule only days in advance and that they are often subject to change. Following the Times story, Starbucks said it would post schedules at least one week in advance. That's not enough time, several workers said, asking the company to provide at least two or three weeks notice, as retailers ranging from Walmart (WMT) and H&M to Victoria's Secret (LB) do.

Meanwhile, despite Starbucks' promise to end clopening, the practice continues, some workers said, although the company insists that this is only in cases when people request such shifts.

"Partners should never be required to work opening and closing shifts. That policy is clear," Starbucks' Hutson said, adding that the company is studying ways to give workers more input in their schedules. "If there are cases where that's not happening, we want to know about that."

Given the scrutiny on Starbucks, the company can count on baristas to do just that.

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"The members of Congress do not think of Puerto Rico as a part of their constituency and responsibility, and that is what is underneath this crisis," says Ana Maria Archila from the Center for Popular Democracy. "It is a crisis of democracy as much as it's a climate crisis, as much as it's an economic crisis."

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