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Labor Report

Tower, Drexel Take Over St. Chris’ Hospital for Children, Preserving 2,100 Jobs

Reading-based Tower Health and Philadelphia’s Drexel University have completed their acquisition of St. Christopher’s Hospital for Children from a bankrupt subsidiary of American Academic Health System.

The $50 million sale spares the North Philadelphia hospital from the same fate as its former sister facility, Hahnemann University Hospital, which closed its doors earlier this year. In severing ties with the for-profit AAHS, the hospital will return to its historical status as a not-for-profit organization.

In a news release, Tower stated: “The hospital’s acquisition … ensures that St. Christopher’s will remain a source of health and healing, medical education and research, and jobs and economic benefit for its Philadelphia neighborhood and the broader region just as it has for the last 144 years.”

More than 30,000 children use the hospital for primary and secondary care, while 70,000 visit its emergency room annually. The hospital has 188 patient beds and employs 2,105 people, including 1,580 full time, according to the Inquirer.

Tower and Drexel will own the hospital operation with Tower acting as the managing partner. Yet AAHS principal Joel Freedman will retain ownership of the property in partnership with Harrison Street Real Estate of Chicago, the newspaper added.

Children’s Hospital of Philadelphia will provide unspecified technical assistance to the new management, the Inquirer said, while Independence Health Group and University of Pennsylvania Health System have offered unspecified “general support.” Citing unnamed sources, the newspaper reported that Independence and Penn are engaged in an effort to buy the real estate.

OSHA Data Confirm That Union Construction Sites are Safer Than Non-Union Sites

New analysis of federal workplace safety data by the Building Trades Employers Association has provided strong evidence that union construction jobs are safer than non-union jobs.

In fact, the BTEA has concluded that union construction workers in New York City are five times less likely to suffer a fatal jobsite accident than non-union workers. Using OSHA data, the BTEA found that there were 63 nonunion construction fatalities in the Big Apple from 2014 to 2018, compared to 14 fatalities on union jobsites. In 2018 alone, there were 14 nonunion deaths compared to four union deaths. In addition, BTEA contractors were cited for 33% fewer safety violations than non-member contractors in 2018.

Speaking to the Staten Island Advance, BTEA CEO Lou Coletti said, “[This] shows that year in and year out, union construction firms are the safest in New York City. That’s because when you have a skilled and experienced union workforce, the quality of work is better and safety is not just prioritized – it’s part of the culture. These statistics make that clear.”

The organization’s findings follow a statewide report compiled last January by the New York Committee for Occupational Safety & Health (NYCOSH) that revealed the fatality rate in New York City is 52% lower than the statewide rate, while “non-union job sites (are) especially dangerous for workers.”

“This report finds that workers die as a result of employer’s disregard for workers’ health and safety and notes the difference between construction fatality numbers on union versus non-union job sites, proving that unionized construction jobs keep New York’s workers safer,” NYCOSH stated.

“Non-union contractors have little oversight outside of government regulatory agencies, and with OSHA’s underfunding, worksites are not receiving the number of inspections necessary to ensure safety standards are being followed,” the report continued. “(Whereas) union job sites have shop stewards and a trained workforce that is more likely to recognize and report safety violations and have protection from their union against retaliation from their employer.”

Pittsburgh-area Manufacturing Falls to All-Time Low as ‘Creative Core’ Jobs Buoy Region’s Economy

Employment in the tech industry and in corporate headquaters have helped Pittsburgh rebound economically from the collapse of its steel industry, but the region’s manufacturing sector has never recovered. In fact, Pittsburgh City Paper reported that the ratio of manufacturing jobs in the region has just hit another all-time low.

Citing new data published by the U.S. Bureau of Labor Statistics, the news agency wrote that region’s manufacturing employment has dropped below 7% of the total nonfarm workforce for the first time in the modern era, or as University of Pittsburgh economist Chris Briem Tweeted, “(the) lowest since Lord Dunmore’s War buffeted the region.”

According to Briem, manufacturing employment in and around the city peaked at about 382,000 in the 1950s and has been steadily declining since then. There are now about 83,000 manufacturing jobs in the region. Meanwhile, the greatest sector of employment growth in the region since the Great Recession of 2008 has been in “super creative core” jobs, including executives, administrators, and “managers related to a professional specialty,” which has accounted for more than 26,000 new jobs, the newspaper reported.

By comparison, the region has lost 10,000 manufacturing jobs since the Great Recession and gained just 7,000 jobs in natural gas drilling, which is widely considered a rapidly growing industry.

“When natural gas drilling started to produce large quantities of gas in 2012, boosters promised the industry would lead to the renaissance of manufacturing in the Pittsburgh region,” City Paper wrote. “… (But) since October 2012, the Pittsburgh region has lost about 6,900 manufacturing jobs.”

Separately, City Paper also reported on new comparative analysis published by the Journal of Urban Affairs about postindustrial labor market restructuring in Pittsburgh and Detroit.

The study’s authors wrote in summary, “Of course, there is some truth to the idea that Pittsburgh has managed the process of postindustrial transition successfully, while even the most enthusiastic Detroit boosters cannot ignore its serious ongoing challenges. But in both cases, these narratives of postindustrial transition inadequately convey the nuances labor market changes occurred in the two metro areas, and their significance for workers’ circumstances.”

New Federal Overtime Rules to Take Effect in January

On December 12, the U.S. Department of Labor announced a final rule that will allow employers to exclude bonuses, travel expenses, wellness programs, unused vacation pay, and other types of incidental or discretionary compensation from the regular pay rate they use to calculate an employee’s overtime pay.

In a news release posted on its website, the department framed the rule as a policy that “will allow employers to more easily offer perks and benefits to their employees” without incurring additional overtime expenses.

“(The) requirements define what forms of payment employers include and exclude in the FLSA’s ‘time and one-half’ calculation when determining overtime rates,” the department stated. “The previous regulatory landscape left employers uncertain about the role that perks and benefits play when calculating the regular rate of pay.”

Yet labor advocates aren’t necessarily buying that narrative.

“The change will effectively lower employees’ overtime pay,” reported.

The final rule will take effect on January 15.

Meanwhile, the department’s new earnings threshold for mandatory overtime pay will take effect on January 1, when the threshold will be raised from $455 to $684. It will be the first threshold update in nearly 15 years.

So, starting next year, employers will be required to pay at the time-and-a-half rate for all overtime hours worked by employees who earn less than $35,568 a year (compared to $23,660 per year under the old rule). However, executive, administrative, and professional employees who make more than the new threshold will not be covered by the mandatory overtime pay rule.

‘Retail Apocalypse’ Has Gotten Worse in 2019 and Is Expected to Continue

By the end of 2019, more than 9,300 retail stores across the country will have closed their doors for good during the calendar year, according to Business Insider, continuing a downward spiral for the sector that has become known as the “retail apocalypse.”

The reeling sector lost a record 102 million square feet of store space in 2017, followed by another 155 million square feet last year, the news agency reported, citing estimates released by the commercial real estate firm CoStar Group. The square footage total for 2019 is expected to surpass last year’s record.

Among the chains with the largest number of closings were Payless ShoeSource (2,500 locations), Gymboree (805), Dress Barn (650), Charlotte Russe (520), Fred’s (520), Family Dollar (390), Gap (230), Walgreens (200), GameStop (up to 200), Forever 21 (up to 178), Sears (175), Kmart (160), A.C. Moore (145), CVS Health (68), JCPenney (27), Lowe’s (20), Walmart (17), and Macy’s (9), among others.

There were 5,864 store closings in 2018 and 8,139 in 2017, according to USA Today, which cited a report by the global marketing research firm Coresight Research.

“The pain is expected to continue into future years, according to an April report from UBS Securities (which) said 75,000 more stores would need to be shuttered by 2026 if e-commerce penetration rises to 25% from its current level of 16%,” USA Today wrote. “A separate analysis by UBS said tariffs on Chinese imports could put $40 billion of sales and 12,000 stores at risk."