Law regulating scheduling would help both workers, economy

SEPTEMBER 04, 2018

A long-standing myth that pits business interests against workers’ rights goes something like this: Every gain made by workers — think wages, working conditions or hours — automatically diminishes employers’ ability to turn a profit and keep their businesses afloat.

This tired argument has been trotted out for decades by economic conservatives and big business. Child labor laws that prevented children under 14 from working full-time jobs? Bad for business — not only did the labor pool shrink, but employers also had to pay adult workers higher wages than they paid children. Pay parity for women workers? Minimum wage? Those things are nice ideas, but they’ll simply cost businesses too much, and the ripple effects will slow down the economy.

The modern incarnation of this anti-labor tactic surrounds an ordinance up for a vote in Chicago’s City Council over predictive scheduling, the latest innovation in the workers’ rights movement. The Chicago Tribune called the Chicago Fair Workweek Ordinance, a “boneheaded proposal” because it would be too onerous for employers, despite the fact that a similar ordinance has been in place in San Francisco since 2014. Others have subsequently been passed in Seattle, New York City, Emeryville, Calif., and Oregon without disaster striking any of their economies.

The Chicago ordinance protects workers by regulating how employers schedule hourly shift workers in companies with more than 50 employees. Employers would be required to provide employees with their scheduled shifts two weeks in advance and offer “predictability pay” for any changes to the schedule inside that window, including adding or subtracting hours. The ordinance also protects workers’ “right to rest” — to refuse to be scheduled for the opening and the closing shift in the same 11-hour period — as well as their right to decline additional hours added to a shift without fear of repercussions from the employer.

Research shows that workers with the lowest income are most likely to work irregular hours, with at least 10 percent of American labor working in jobs with unpredictable schedules. Indeed, 41 percent of hourly workers report receiving their schedules one week or less in advance of their shifts. This uncertainty leads to instability across the board: income volatility, increased work stress, and heightened work-family conflicts. Together, these obstacles plaguing low-wage workers exacerbate rising inequality, which is arguably the
biggest actual threat to our economy.

It works like this: Predictability pay accrues on top of an employee’s wages per shift and is equivalent to her hourly wage. If an employer changes the schedule with less than two weeks’ notice but more than 24 hours’ notice, they are only required to pay the employee one hour of predictability pay; if they provide less than 24 hours’ notice, employers could owe up to four hours of predictability pay for reducing hours in a shift. In other words, employers are incentivized to plan ahead, but they’re not prevented from making game-time scheduling changes.

To help businesses, the tech sector has stepped up and created multiple platforms to allow employers to easily schedule workers, helping them to limit the additional bureaucracy the Fair Workweek Ordinance entails. These tools will hardly break the bank for the vast majority of businesses affected, namely fast-food chains and large scale retailers.

Opponents say that if, for example, there’s a heat wave and more people are stopping into a drugstore to buy water, owners will face burdensome costs to add workers to the shift to cover increased demand. But don’t workers deserve a greater share of the increased profits made by the store that day, since they provided the means necessary to sell the product? Predictability pay ensures that workers get a bigger piece of a bigger pie.

These protections are a necessary step as business owners and labor adapt to the gig economy, where more people work multiple jobs and retailers are open for longer hours. Some have pointed out that the labor insecurity inherent to the gig economy is not a product of technology, but of policy. Policy, then, is needed to ease the transition away from the old nine-to-five workday. Workers are often juggling multiple jobs, school, and taking care of their families. Balancing these various priorities is practically impossible without being able to predict when you’ll be working, and how much you’ll earn every two weeks. Workers shouldn’t have to worry that they won’t make rent on time or be able to buy their kids school supplies if their boss cuts back their hours.

The Chicago Fair Workweek Ordinance will make for happier, more loyal workers, which is good for business. It will reduce income inequality, which is good for the economy. Businesses should work hand-in-hand with labor to accomplish something great for Chicago.

Isabelle Dienstag is a research fellow with Innovation Illinois.