WBEZ | Economy http://www.wbez.org/news/economy Latest from WBEZ Chicago Public Radio en Woman alleges housing voucher discrimination in pricey Chicago buildings http://www.wbez.org/news/woman-alleges-housing-voucher-discrimination-pricey-chicago-buildings-110023 <p><p>Tiara is a African-American mother of two small children who longed for a better Chicago public school for her six-year-old son.</p><p>Last year, Tiara decided to move out of Bronzeville and began searching for apartments in the pricey River North area.</p><p>But when she mentioned she had a housing choice voucher, or Section 8, landlords told Tiara they wouldn&rsquo;t take her voucher. A few places said &ldquo;yes&rdquo; over the phone. So she&rsquo;d arrive on time, with a paycheck stub and a rental deposit. But no matter -- Tiara says those places rejected her too.</p><p><a href="http://www.thecha.org/filebin/2014_Mobility_Program_Flier_FINAL.pdf" target="_blank"><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/map.PNG" style="height: 521px; width: 400px; float: right;" title="CHA Opportunity Area Map (Courtesy of the CHA)" /></a>Tiara is painfully shy and asked that her last name not be used. As she recounted her story, Tiara dabbed her teary eyes with a tissue.</p><p>&ldquo;I&rsquo;ve never experienced anything like this. I couldn&rsquo;t believe it. It still took me awhile to like really come to the fact that I was discriminated against. That hurt so bad,&rdquo; she said.</p><p>Tiara filed complaints against four property owners and management companies with the Chicago Commission on Human Relations. The complaints are currently under review.</p><p>Tiara&rsquo;s allegations aren&rsquo;t occurring in a vacuum. Earlier this month, the Chicago Lawyers&rsquo; Committee for Civil Rights Under Law&nbsp;issued a <a href="http://www.wbez.org/news/new-report-reveals-pervasive-discrimination-housing-voucher-program-109946">report that found rampant racial discrimination in housing.</a></p><p>Tens of thousands of Chicago families rent in the private market using a housing voucher. Renters with vouchers only have to pay a portion of their rent. The Chicago Housing Authority administers the program and picks up the rest. CHA has been criticized for putting families in poor segregated neighborhoods in the city.</p><p>In 2011, the public housing agency started&nbsp;a <a href="http://www.thecha.org/pages/mobility_counseling/2639.php">mobility program</a>. In&nbsp;very limited cases, CHA will pay more in rent if a family moves to so-called &ldquo;opportunity areas.&rdquo; About 10 percent of voucher holders are in this program.</p><p>Opportunity areas are communities with fewer than 20 percent in poverty and low-subsidized housing saturation. That&rsquo;s how Tiara was able to consider high rises with monthly rents upwards of $3,000 a month.</p><p>&ldquo;It allows families an opportunity to explore areas of the city that they might not otherwise be familiar with,&rdquo; said Mary Howard, executive vice president of resident services for CHA.</p><p>Many neighborhoods with the highest number of vouchers also have the highest poverty and crime rates in the city.</p><p>&ldquo;Families that live in opportunity areas on average have higher earnings than those that do not live in opportunity areas,&rdquo; Howard said. She added that these areas can have higher retention rates. &ldquo;So that once a family does move and becomes integrated in their new community, that they&rsquo;re not moving is success.&rdquo;</p><p>In segregated Chicago, North Side neighborhoods may seem inaccessible for some families in the voucher program. There can be feelings of isolation. CHA has mobility counselors who try to alleviate those concerns.</p><p>But that was never an issue for Tiara. She said in her case it was pushback from the rental community. It&rsquo;s illegal for Chicago landlords to say at the outset that they won&rsquo;t take Section 8 vouchers.</p><p>Danielle McCain is an attorney with the Chicago Lawyers&rsquo; Committee for Civil Rights Under Law, and she represents Tiara.</p><p>&ldquo;We want her voice heard as a voucher holder. We want these landlords to have to address these issues. Whatever damages we&rsquo;re able to recover, those are ways in which we can influence landlords going forward not to have conduct such as this in the future,&rdquo; McCain said.</p><p>McClain said housing voucher discrimination is common, and not just in affluent areas. She pointed to her group&rsquo;s&nbsp;recent <a href="http://cafha.net/wp-content/uploads/2014/02/CLCCRUL-CHA-testing-report.pdf">report</a> as evidence, but also says a lot of discrimination goes unreported.</p><p>As for Tiara, she eventually found a happy ending in a Streeterville apartment building that accepted her voucher.</p><p>&ldquo;I love it,&rdquo; Tiara said. &ldquo;You have parks everywhere. You have bus stops everywhere. You have stores, easy to get to. Healthy food. Healthy food almost everywhere. So it&rsquo;s more like convenience.&rdquo;</p><p>And most importantly, Tiara said, her six-year-old son attends a high-performing public school. And he&rsquo;s thriving.</p><p><em><a href="http://www.wbez.org/users/nmoore-0" rel="author">Natalie Moore</a> is WBEZ&rsquo;s South Side Bureau reporter. <a href="mailto:nmoore@wbez.org">nmoore@wbez.org</a></em></p><p><em>Follow Natalie on <a href="https://plus.google.com//104033432051539426343" rel="me">Google+</a>, &nbsp;<a href="https://twitter.com/natalieymoore">Twitter</a></em></p></p> Mon, 14 Apr 2014 17:52:00 -0500 http://www.wbez.org/news/woman-alleges-housing-voucher-discrimination-pricey-chicago-buildings-110023 Bigger than burgers and fries, franchising blamed for low wages http://www.wbez.org/news/bigger-burgers-and-fries-franchising-blamed-low-wages-109978 <p><p><iframe frameborder="0" height="310" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/playlists/29724231&amp;color=ff5500&amp;auto_play=false&amp;hide_related=true&amp;show_artwork=false" width="100%"></iframe></p><p><br /><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchising%201%20FINAL_sh.jpg" style="margin: 4px 0px 0px 0px; float: right; height: 233px; width: 350px;" title="Hashim Syed, owner of a 7-Eleven in Chicago, says company rules make it hard for him to cut costs so he could pay employees more. (WBEZ/Shannon Heffernan)" />When we asked what it is like to own a franchise of the world&rsquo;s largest convenience-store chain, Hashim Syed took us to a cramped back room of his store, a 7-Eleven on Chicago&rsquo;s North Side.</p><p>Sitting next to a wall of tubes filled with bright-colored syrup for the soda machine, Syed recalled a young man working the graveyard shift a few years back. This employee wanted to be with his father, who was gravely ill.</p><p>&ldquo;Where we come from,&rdquo; said Syed, 71, who was born in India, &ldquo;it&rsquo;s very important that you spend the final days with parents for the comfort.&rdquo;</p><p>But the worker could not afford to take unpaid leave. And Syed could not afford to replace him. &ldquo;I&rsquo;d have had to have somebody else do his work,&rdquo; Syed said, his voice becoming faint. &ldquo;I would have ended up paying two wages.&rdquo;</p><p>The employee kept most of his shifts and, to this day, Syed regrets it. &ldquo;I wish I would have given him some time off,&rdquo; he said.</p><p>In Syed&rsquo;s nearly quarter century as a 7-Eleven franchisee, he has worked brutally long hours, his profits have fallen far short of his expectations, and the Dallas-based chain has imposed tighter rules on how he runs the store.</p><p><iframe allowfullscreen="" frameborder="0" height="400" src="//www.youtube.com/embed/6fidL51oakg?list=UUkpMCLrDFxb1n74GOOw81-w" width="600"></iframe></p><p>Something else that steams Syed is his role as an employer. He says all of those 7-Eleven rules limit his ability to cut costs and free up resources to treat his workers better. &ldquo;When I lived in Bombay,&rdquo; Syed said, &ldquo;this is not what I thought they meant by the American Dream.&rdquo;</p><p>An array of signs suggests Syed is not the only one questioning the effects of franchising.</p><p>Franchisees are pushing several states to clamp down on allegedly predatory franchisor practices. Web sites such as <a href="http://www.bluemaumau.org/">Blue MauMau</a> and <a href="http://www.unhappyfranchisee.com/">Unhappy Franchisee</a> have sprung up to connect these small business owners and give them a voice.</p><p>In one industry, &ldquo;franchisees&rdquo; have won a string of class-action lawsuits claiming that they are really employees and that their employers are using the franchise model to skirt wage-and-hour laws.</p><p>Franchises, especially those serving fast food, have also become frequent protest sites for a movement demanding higher wages and benefits such as paid sick leave. Those protests have grown louder as some politicians, ranging from Illinois Governor Pat Quinn to President Barack Obama, call for raising the minimum wage.</p><p>And, while many economists and business groups praise franchising as efficient, the model is taking hits from some scholars, including an Obama nominee to head the U.S. Department of Labor&rsquo;s Wage and Hour Division. That nominee says franchising is part of something much bigger &mdash; something bad for the workplace.</p><p><strong>How Franchising Works</strong></p><p>Franchising dates back to the 19th century, when manufacturers such as the Singer Sewing Machines Company developed the model for sales representatives. By the 1960s, franchising was ubiquitous, thanks to fast-food chains such as McDonald&rsquo;s and Burger King. Today franchising takes place in a dizzying range of industries, from tax services to child care, from real estate to car repair.</p><p>The number of U.S. franchise jobs in recent years has grown, now totaling more than 8.1 million &mdash; about 7 percent of private-sector jobs, according to data from payroll processor ADP. Franchise employment growth has outpaced jobs growth in the economy as a whole for 12 consecutive months, the data show.</p><p>In Illinois, franchise employment totals almost 345,000, according to the<a href="http://www.franchise.org/"> International Franchise Association</a> Educational Foundation. As of January, 1,152 companies had active registrations to sell franchises in Illinois, the state attorney general&rsquo;s office says.</p><p>Here is how the model works. A company thinks it has a good thing going and decides to expand. But it may not be familiar with the new places and may be short on capital. It also does not want to employ the necessary workers. It would rather have someone else do that &mdash; someone with skin in the game.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchising%202%20FINAL_sh.png" style="margin: 4px 0px 0px 0px; float: left; height: 244px; width: 350px;" title="Amjad “AJ” Haj, who co-owns three Al’s Beef franchises in Chicago, praises the company’s support to run them. (WBEZ/Shannon Heffernan)" />&ldquo;A franchisee will do the best job,&rdquo; said David Howey, who bought an old Chicago sandwich brand, <a href="http://alsbeef.com/">Al&rsquo;s Beef</a>, and stepped up the chain&rsquo;s franchising. &ldquo;Instead of a large company having a bunch of managers who are running the stores, a franchisee buys into the system and it becomes their business. It becomes their life. So the brand is represented properly by people who really care.&rdquo;</p><p>For the franchisees, the model allows them to run their own business and take advantage of company resources for things such as property, equipment, training and marketing.</p><p>The franchisees also pay an upfront sum known as the franchise fee, typically five figures. Once in business, they pay a specified royalty &mdash; often 5-10 percent of sales &mdash; and fees for things such as advertising, management and insurance.</p><p>Amjad &ldquo;AJ&rdquo; Haj, who owns three Al&rsquo;s Beef franchises with his brother, says he appreciates being able to focus on day-to-day tasks. &ldquo;You do not have to go test 20 different burgers to see which one you want to sell,&rdquo; Haj said. &ldquo;They&rsquo;ve already done that. They&rsquo;ve tested out all the different mayos for you.&rdquo;</p><p>Successful franchising depends on a good brand &mdash; which means, above all, consistency. At all 16 locations of Al&rsquo;s Beef, the sandwiches not only taste the same, they drip the same, thanks to a uniform recipe for their <em>jus</em>.</p><p>What protects the brand is the franchise agreement, which spells out franchisee rules on topics such as operating hours, dress codes, supply vendors and payroll processes.</p><p>Despite paying all the fees and following the rules, a franchisee has no guarantee the unit will flourish. Franchises go belly up about as often as independent businesses in their industry, according to the<a href="http://www.sba.gov/"> U.S. Small Business Administration</a>.</p><p>Many franchisees do hang on &mdash; some for decades, like Syed, the 7-Eleven operator. A third of franchisees run multiple units, usually two or three, according to Franchise Business Review.</p><p>&ldquo;We see that this is successful &mdash; businesses being franchised &mdash; simply by the fact that they exist all around us,&rdquo; said <a href="http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000119727">Francine LaFontaine</a>, a University of Michigan professor of business economics and public policy. &ldquo;And then consumers are voting with their feet by consuming the goods and services that are offered this way. That means we&rsquo;ve made that sector more efficient.&rdquo;</p><p>That efficiency can lower prices, said LaFontaine, a&nbsp;<a href="http://books.google.com/books/about/The_Economics_of_Franchising.html?id=HaZuDYzXLSYC">leading researcher</a>&nbsp;on franchise economics. &ldquo;That&rsquo;s good for consumers. It probably also means we consume a bit more of these things, which means there are more jobs in this sector than there would be otherwise.&rdquo;</p><p>But the model is fraught with tensions. When a franchise agreement expires, companies sometimes take the opportunity to increase the royalty or impose tighter rules. If the franchisee does not follow the rules, the company might take over that unit. Last summer, 7-Eleven ousted franchisees from several Chicago stores for alleged franchise-agreement violations.</p><p>The company, for its part, has reasons to establish rules &mdash; and enforce them. Making all franchises buy from the same supplier can help bring down costs. Higher fees can fund more advertising. Quality standards help keep franchisees from freeloading on the brand.</p><p>Other tensions stem from the wages and work conditions of franchise employees &mdash; the workers who flip the burgers or ring up the Slurpees.</p><p>Last June, federal <a href="http://www.justice.gov/usao/nye/pr/2013/2013jun17.html">authorities seized</a> fourteen 7-Eleven stores in New York and Virginia and arrested the franchisees for allegedly employing illegal immigrants, forcing them to work long overtime hours, paying them for just a fraction of their work and forcing them to live in substandard housing owned by the franchisees. After the arrests, the corporation said it planned to step up its franchisee monitoring.</p><p>This March, McDonald&rsquo;s workers in California, Michigan and New York <a href="https://drive.google.com/folderview?id=0BwU-XxSsYz21eXluRzFpVFFzMFE&amp;usp=sharing">filed lawsuits</a> claiming that the Oak Brook-based corporation is responsible for alleged wage-and-hour violations, even at franchises. A company statement about the suits said McDonald&rsquo;s was committed &ldquo;to the well-being and fair treatment of all people who work in McDonald&rsquo;s restaurants&rdquo; and that it would investigate the allegations and &ldquo;take any necessary actions.&rdquo;</p><p><img alt="" class="image-original_image" src="http://llnw.wbez.org/styles/original_image/llo/insert-images/book cover.jpg" style="margin: 4px 0px 0px 0px; float: right; height: 296px; width: 200px;" title="A Boston University economist likens franchising to outsourcing." />Economists disagree about what causes such work conditions. Some cite the low-skilled jobs in many heavily franchised industries. They point to cutthroat competition. &ldquo;It&rsquo;s more the industry that determines the working conditions of the employees than it is the way in which this is organized,&rdquo; said LaFontaine, the University of Michigan economist, defending the franchise model.</p><p>Other experts tie the low wages to the franchising. When a company franchises, they point out, it is adding extra owners and a new layer of competition. That means more people taking slices of the pie and more pressure to cut costs such as wages. &ldquo;Each different business is operating on a thinner margin,&rdquo; said David Weil, the Labor Department nominee, who is a business professor at Boston University.</p><p>Weil co-authored a study that found that fast-food restaurants operated by a franchisee are more likely to violate wage-and-hour laws than eateries the big corporation runs itself.</p><p>When workers earn less, a related argument goes, they also consume less &mdash; a drag on the economy.</p><p>In a <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674725447">new book</a>, Weil acknowledges the benefits of franchising for businesses that want to expand, but he also likens the model to&nbsp;various forms of outsourcing. He says they are all ways for big companies to shed employment responsibilities.</p><p><strong>The Slurpee Economy</strong></p><p>Syed says he bought his 7-Eleven franchise in 1990. &ldquo;I was very excited,&rdquo; he said. &ldquo;I could buy everything from where I wanted to.&rdquo;</p><p>After a while, however, Syed decided that being a franchisee was not all it was cracked up to be. It was not just the long hours. The company allowed another 7-Eleven to open just a few blocks away. Then it changed the terms of his franchise agreement.</p><p>Franchisees learned they had to buy 85 percent of supplies from approved vendors. &ldquo;Now everything will be controlled by 7-Eleven Company,&rdquo; Syed said. &ldquo;They will decide what to buy, where to buy.&rdquo;</p><p>Other franchisees complain that 7-Eleven goes as far as to remotely control the temperature in their stores, even the volume on their televisions.</p><p>Many of 7-Eleven&rsquo;s rules do help protect the brand. And the company has reasons to make franchisees purchase supplies from an approved vendor. For one, 7-Eleven can use the collective buying power to keep costs down, a company official said.</p><p>Something 7-Eleven does not control are employment decisions, including the amount Syed pays his workers. Syed said one of his half-dozen employees, the manager, makes $10.50 an hour. He said the rest earn less &mdash; in a state where the minimum is $8.25.</p><div class="image-insert-image "><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/banner-edited.jpg" title="Syed, the 7-Eleven franchisee in Chicago, calls himself a 'front man' for the Dallas-based corporation. (WBEZ/Shannon Heffernan)" /></div><p>Syed said he can hardly blame employees who are upset about the pay, but he insisted he is not getting rich either. Last year, his 23rd at the store, Syed took home $53,866, he said. That was one of his best years, he added.</p><p>To Syed, the whole franchise model feels like a setup. &ldquo;We are as much of a victim in it as the workers are,&rdquo; he said. &ldquo;We are nothing more than a glorified manager.&rdquo;</p><p>7-Eleven officials declined to get specific regarding the company&rsquo;s agreements with its approximately 6,200 franchises. But Jay Mitchell, a franchise-sales manager at the Dallas headquarters, said 7-Eleven was not going to take responsibility for wages or work conditions.</p><p>Franchisees are &ldquo;going to be independent operators so they are going to be responsible for employing people and determining what they pay those people as well,&rdquo; Mitchell said. &ldquo;While we will provide them guidance, it is completely up to [the franchisees] how they pay their employees.&rdquo;</p><p>Questioned about such employment policies, 7-Eleven spokeswoman Margaret Chabris said the company provides franchisees &ldquo;very comprehensive&rdquo; training and said the franchise agreement requires them to follow the law.</p><p>But Syed said the rest of the agreement makes it too hard for him to cut costs, leaving him little room to pay his employees more. &ldquo;That worker also thinks &mdash; and I know it for a fact &mdash; that I am just greedy and I want to keep all the money in my pocket instead of giving him fair wages,&rdquo; he said.</p><p>It might have been harder for Syed to run a convenience store without the 7-Eleven brand, said LaFontaine, the economist. &ldquo;Independent businesses or franchises fail all the time. That is just a reality of these kinds of small businesses.&rdquo;</p><p>Syed, who publishes a <a href="http://7-elevenfoac.com/data/newsletter/Final_FOAC_December_2012_Newsletter.pdf">newsletter</a> for Chicago-area 7-Eleven owners,&nbsp;says state and federal lawmakers should do more to protect franchises from the companies that own their brand.</p><p>To date, just 17 states have any laws governing franchisor-franchisee relations, according to Dean Heyl, who directs state government affairs for the <a href="http://www.franchise.org/">International Franchise Association</a>.</p><p>Those states include Illinois, which enacted its&nbsp;<a href="http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2381&amp;ChapterID=67">Franchise Disclosure Act</a>&nbsp;in 1987. That law regulates how franchisors treat prospective franchisees and requires franchisors to have &ldquo;good cause&rdquo; for terminating a franchise.</p><p>Last week, Maine&rsquo;s state Senate voted down a bill that would have, among other things, required franchisors to provide a franchisee a 60-day notice to resolve a problem before termination. The bill also would have allowed franchisees to leave their business to a spouse, partner or heir.</p><p>Heyl said such legislation, if enacted, would &ldquo;hurt franchisees who are playing by the rules.&rdquo;</p><p><strong>Franchising</strong>&rsquo;<strong>s New Frontier</strong></p><p>As franchising has spread, some industries have pushed the model to the extreme. In commercial-cleaning franchising, the customers that need the service usually come through the franchisor. They also make their payments to the franchisor. The franchisee gets just a portion of the payments in periodic checks from the franchisor &mdash; after deductions for insurance, royalties, management and so on.</p><p>In Chicago, the commercial-cleaning franchisees include hundreds of Mexican immigrants. One of them is a woman we will call Gloria Pérez. We agreed not to use her real name because she fears retribution from her franchisor. Pérez entered the commercial-cleaning business four years ago.</p><p>Back then, she and her husband were both unemployed, they had three kids at home and a mortgage, and they were burning through their savings. Pérez saw a newspaper ad placed by CleanNet of Illinois, part of<a href="http://www.cleannetusa.com/"> CleanNet USA</a>, based in McLean, Virginia.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/Franchise%203_sh%20%28CM%20credit%29.JPG" style="margin: 4px 0px 0px 0px; float: right; height: 233px; width: 350px;" title="A CleanNet janitor works after hours in a Chicago-area car dealership. Treated like a franchisee, she says her pay amounts to less than Illinois’s minimum wage. (WBEZ/Chip Mitchell)" />The ad said she could have her &ldquo;own business.&rdquo; Pérez, interviewed by WBEZ in Spanish, said it seemed like &ldquo;a good opportunity because we did not have any other work.&rdquo;</p><p>Pérez went in for an appointment. CleanNet gave her more than 150 pages of legal disclosures &mdash; all in English, she said. She did not understand much except some numbers on a chart the company gave her. &ldquo;It said I could make $6,000 a month if I bought a franchise for $21,000,&rdquo; she said.</p><p>After a discount, Pérez said, she managed to put in $19,000. Since then, she said, she has never come close to earning the monthly $6,000. &ldquo;Every month they take out 20 percent of what I earn&rdquo; and CleanNet does not give her enough customers within range of her home, Pérez said.</p><p>&ldquo;It&rsquo;s a scam,&rdquo; said Chicago attorney Christopher Williams, who filed a class-action lawsuit against the company in March on behalf of janitors such as Pérez. &ldquo;CleanNet is trying to say, &lsquo;We have no unemployment obligation to them. We have no workers-comp obligations to them. We do not pay payroll taxes. We are not their employer. And these are people who need public assistance because they&rsquo;re making so little money. They can&rsquo;t afford health care. If they get injured on the job, they have no workers compensation insurance.&rdquo;</p><p>If a customer falls behind on its payments, CleanNet warns it could deduct that money from paychecks too.</p><p>Another way CleanNet makes money off its janitors is by loaning them money when they cannot afford the franchise fee &mdash; the upfront payment from the workers. Paying off that loan means yet more paycheck deductions.</p><p>&ldquo;All they&rsquo;re left with after that agreement is debt,&rdquo; Williams said.</p><p>The suit against CleanNet, filed in federal court, claims hundreds of the company&rsquo;s Illinois janitors are not franchisees but employees. It accuses the company of violating state and federal laws regulating wages and work hours.</p><p>CleanNet officials did not respond to our requests for comment about the suit. When janitors in Massachusetts filed a similar claim against the company, CleanNet denied any liability or wrongdoing. It did settle with those janitors last November, agreeing to pay out $7.5 million.</p><p>In Illinois, CleanNet is among at least eight commercial-cleaning firms registered to offer franchises, according to the state attorney general&rsquo;s office. The biggest is Jani-King International, based in Addison, Texas.</p><p>Jani-King says it pioneered franchising in the commercial cleaning industry. Asked whether ducking wage-and-hour laws was a big factor in deciding to sell franchises to janitors instead of employing them, the company emailed a statement that did not directly answer the question.</p><p>&ldquo;Franchise owners, like all business owners, have control over their day-to-day operations as well as their profitability,&rdquo; the Jani-King statement said. &ldquo;They can solicit and bid their own business, and they can accept or decline the right to service accounts offered by Jani-King. They can hire employees to clean accounts, or they can clean themselves. They buy all of their own equipment and supplies. The franchise owners receive all revenue generated by their business (less Jani-King&rsquo;s fees).&rdquo;</p><p>But Weil, the Boston University business economist, said the franchise model enables the cleaning companies to shortchange the janitors. &ldquo;If you start doing the math, you realize that people are being paid way below the minimum wage or being denied overtime payment and are really being subjected to inappropriate expenses by another company for, essentially, being an employee of that company,&rdquo; he said.</p><p>In the cleaning industry, it is not just the &ldquo;franchisees&rdquo; who are vulnerable to wage-and-hour violations. Those workers often bring other people to help them with jobs. Pérez gets part-time help from her husband, a son and a neighborhood friend. &ldquo;I can&rsquo;t afford to pay them minimum wage,&rdquo; she said.</p><p>Court rulings in Massachusetts have upended franchising by janitorial companies. &ldquo;Several have closed down or stopped operating the way they were operating,&rdquo; said attorney Shannon Liss-Riordan, who filed the key suits. Now the companies are either treating their janitors like employees or &ldquo;not charging workers upfront for a job,&rdquo; she said.</p><p>&ldquo;My hope is that some of the rulings that we&rsquo;ve gotten [in Massachusetts] will spread,&rdquo; Liss-Riordan said.</p><p>That prospect worries Heyl, the <a href="http://www.franchise.org/">International Franchise Association</a> lobbyist. If lawsuits drive franchised cleaning companies out of business, there will be less competition and increased prices, he warned.</p><p>Heyl also sees a threat to franchising in all industries. &ldquo;We&rsquo;re just coming out of a recession, and banks are very skittish and, if they start looking at a franchise system and open up the [newspaper] and say, &lsquo;Look, some of these franchisees are employees,&rsquo; and there&rsquo;s litigation to follow, there&rsquo;s numerous negative economic impacts.&rdquo;</p><p><em>Follow <a href="http://www.wbez.org/users/cmitchell-0">Chip Mitchell</a> at <a href="https://twitter.com/ChipMitchell1">@ChipMitchell1</a>.&nbsp;Follow <a href="http://www.wbez.org/users/shannon-0">Shannon Heffernan</a> at <a href="https://twitter.com/shannon_h">@shannon_h</a>.&nbsp;</em><em>This report, edited by <a href="http://www.wbez.org/users/djohn">Derek John</a>, is part of WBEZ</em>&rsquo;<em>s&nbsp;</em>&ldquo;<em>Front and Center</em>&rdquo;<em>&nbsp;series, funded by the Joyce Foundation,&nbsp;</em>&ldquo;<em>Improving the quality of life in the Great Lakes region and across the country.</em>&rdquo;</p></p> Mon, 07 Apr 2014 05:01:00 -0500 http://www.wbez.org/news/bigger-burgers-and-fries-franchising-blamed-low-wages-109978 Selling bikes, watches and civic pride http://www.wbez.org/news/selling-bikes-watches-and-civic-pride-109960 <p><p>What if the answer to saving a great old American city is what made the city great in the first place: Quality stuff, made right at home.</p><p>In Midtown Detroit, a new company is taking a big bet on local manufacturing to help bring its city back. And it&rsquo;s counting on the century-old traditions of a Chicago factory to get there.</p><p>You probably have already heard of the company - but not necessarily in this context. In its heyday, <a href="http://www.google.com/url?q=http%3A%2F%2Fwww.shinola.com%2F%3Fgclid%3DCIvz3uLgwr0CFQsSMwodkQEAhg&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNGcqZ_-Q3bKthGYHH7XdDolsOLwUQ">Shinola</a> was a popular brand of shoe polish. You might remember the catch phrase it inspired: &ldquo;You don&rsquo;t know s**t from Shinola.&rdquo; But you probably don&rsquo;t associate it with a squeaky clean watch-making factory in Midtown Detroit.</p><p>The new Shinola company headquarters was built inside the guts of what used to be a General Motors research and design lab. It&rsquo;s where some 60 factory workers and a bold branding team are trying to connect the muscle of the manufacturing floor with a new image and reality for Detroit.</p><p>&ldquo;This is really about quality and making product in the United States and that we can make amazing products in this country - on a small scale and a large scale - and be successful at it,&rdquo; creative director Daniel Caudill said.</p><p><object height="465" width="620"><param name="flashvars" value="offsite=true&amp;lang=en-us&amp;page_show_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326778624%2Fshow%2F&amp;page_show_back_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326778624%2F&amp;set_id=72157643326778624&amp;jump_to=" /><param name="movie" value="https://www.flickr.com/apps/slideshow/show.swf?v=140556" /><param name="allowFullScreen" value="true" /><embed allowfullscreen="true" flashvars="offsite=true&amp;lang=en-us&amp;page_show_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326778624%2Fshow%2F&amp;page_show_back_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326778624%2F&amp;set_id=72157643326778624&amp;jump_to=" height="465" src="https://www.flickr.com/apps/slideshow/show.swf?v=140556" type="application/x-shockwave-flash" width="620"></embed></object></p><p>The founders of Shinola, backed by a Texas company called Bedrock Manufacturing, bought out the rights to that old shoe polish brand in 2011, and have been repurposing it into a pristine, new watch, bike and leather goods company ever since.</p><p>The company launched its website last year, and the first watches were sold last March. In the first six months, company reps say, Shinola generated more than $20 million in sales.</p><p>Caudill says he couldn&rsquo;t be prouder that they chose Detroit.</p><p>&ldquo;It was really sort of the people and the sense of optimism and excitement that kept us coming back,&rdquo; he said.</p><p>And that sense of pride in Detroit and quality goods doesn&rsquo;t just come from inside Shinola&rsquo;s well-branded&nbsp; business office&hellip;</p><p>Taenna Schumake was working on the repairs side of the assembly line the day I visited the Shinola factory. As she snapped a newly aligned watch face back together, she explained why precision is important in their work - and not just for keeping time.</p><p>&ldquo;We care about the quality and the way that it looks as far as the hands - or just everything. It&rsquo;s like because my name is on it, it has to be right,&rdquo; she said.&nbsp;</p><p>Schumake&rsquo;s name wasn&rsquo;t always on watches - that&rsquo;s true of a lot of people here--their hands worked with car parts or chopped vegetables or washed hair.</p><p>Imagine the transition for Yati Hairston, moving from the roar of the automotive world to the whisper of this watch factory.</p><p>&ldquo;It&rsquo;s quiet in here,&rdquo; she says, &ldquo;Sit down, so it&rsquo;s a whole lot less stress.&rdquo;</p><p>Shinola began hiring in 2012, and they weren&rsquo;t just looking for watchmakers.They put applicants through dexterity training to make sure they had keen eyesight and nimble fingers - taking those who used to be part of the engine of this motor city and retraining them to tinker inside the movements of a watch.</p><p>Robert Swope came from the food industry - and now works in customer service repairs.</p><p>&ldquo;You know you wouldn&rsquo;t think you&rsquo;d be able to do something like this in this country. You think you&rsquo;d have to go to Switzerland or something to be a part of something like this, but I didn&rsquo;t even have to leave my home town,&rdquo; Swope told me.</p><p>And when a customer opens the American-made wooden box for the $600 watch - that punch of pride in Detroit and American-made is part of what Shinola is selling.</p><p>Take their <a href="http://www.google.com/url?q=http%3A%2F%2Fmedia-cache-ec0.pinimg.com%2F736x%2F93%2F3e%2Ff1%2F933ef14a35b3e39c28a5f65c1be1f5c7.jpg&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNG0qJpcTfMfG43sXfnFbFRHL-PpNA">full color ad</a> in the New York Times last year:&nbsp; &ldquo;To those who have written off Detroit - we give you the Birdy&rdquo;</p><p>They mean birdy, as in their <a href="http://www.shinola.com/shop/the-birdy-metal-band-watch-s006.html">Birdy watch</a>.</p><p>But bold branding doesn&rsquo;t come cheap: The company spent $10 million on marketing alone in 2013.</p><p>The watches do include parts that Shinola brings in from as far as Switzerland and China-- which has brought on some criticism of their American-made claim - but the timepieces&nbsp; are assembled on factory lines in Detroit.</p><p>And if you&rsquo;re building your brand on &ldquo;predominantly American made&rdquo;&nbsp; and obsession with quality - you&rsquo;d&nbsp; better get American suppliers with the same sensibilities - like inside an old tannery on the Northwest Side of Chicago--where old-fashioned is their way of doing business. Shinola chose the Horween Leather Company to supply all of the leather for Shinola&#39;s watch straps and leather goods.</p><p>The story of &nbsp;<a href="http://www.google.com/url?q=http%3A%2F%2Fhorween.com%2F&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNHOZPp3rtTQgXXLhArnp-ZFO4DDGA">Horween </a>&nbsp;began in Chicago in 1893 - when Nick Horween&rsquo;s great, great grandfather Isidore Horween traveled from Ukraine to the World&rsquo;s Fair in Chicago.</p><p>And for a tanner like Horween - Chicago turned out to be a great place to do business.</p><p><object height="465" width="620"><param name="flashvars" value="offsite=true&amp;lang=en-us&amp;page_show_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326816713%2Fshow%2F&amp;page_show_back_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326816713%2F&amp;set_id=72157643326816713&amp;jump_to=" /><param name="movie" value="https://www.flickr.com/apps/slideshow/show.swf?v=140556" /><param name="allowFullScreen" value="true" /><embed allowfullscreen="true" flashvars="offsite=true&amp;lang=en-us&amp;page_show_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326816713%2Fshow%2F&amp;page_show_back_url=%2Fphotos%2Fchicagopublicradio%2Fsets%2F72157643326816713%2F&amp;set_id=72157643326816713&amp;jump_to=" height="465" src="https://www.flickr.com/apps/slideshow/show.swf?v=140556" type="application/x-shockwave-flash" width="620"></embed></object></p><p>&ldquo;A lot of the tanning industry in the United States was concentrated here at that point because the stockyards were here,&rdquo; Nick Horween said. &ldquo;The business was easy to develop at that point because so much of what he needed to start the business and so much of what those businesses needed was within miles of the factories.&rdquo;</p><p>The stockyards might be gone - but the factory remains at 2815 North Elston Avenue. And the employees inside follow the exact guidelines on many of the same cast iron machines that Nick Horween&rsquo;s great great grandfather set up when he opened his first factory in 1905.&nbsp;</p><p>It all starts with animal hides shipped from around North America and Europe - then stored in stacks in the basement of the old building in Bucktown. And tanning takes months: The hides will be taken through a process that includes dehairing, trimming, shaving, tanning and retanning, conditioning drying and coloring&hellip;.</p><p>The steps vary, depending on whether&nbsp; the hide&rsquo;s next life will be as a shell cordovan shoe, for instance, or a baseball glove.</p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/IMG_3893_web.jpg" style="height: 373px; width: 280px; float: left; margin-left: 5px; margin-right: 5px;" title="Embossed and colored football leather at the Horween Leather Company factory. Embossing leather for a football takes a lot of heat and a lot of pressure to make sure the pebbles stay in the ball permanently. (WBEZ/Lauren Chooljian)" />&ldquo;We&rsquo;re really trying to showcase the natural beauty of the leather,&rdquo; Horween said. &ldquo;The quality, the natural characteristics, and also when you make leather like that it looks better when it ages better and it feels nicer.&rdquo;</p><p>And when they say natural - they mean it.</p><p>If you take a closer look - you might see some small scratches or minor discolorations in a piece of leather - evidence of a hide&rsquo;s previous life. Horween pointed out some scratches that he said could be from the animal rubbing up against barbed wire. And some little dots that he said were likely bug bites.</p><p>According to Horween, adapting to new technologies is not their style. And his family will spare no expense to continue the traditional way of doing things - so long as it improves their product.</p><p>So a business plan bent on quality and American made has kept Horween going for a century. And Shinola is growing: Since I visited, they&rsquo;ve expanded to a second movement assembly line, and they continue to hire.</p><p>But can&nbsp; that - and a good dose of civic pride - make a real difference in Detroit&rsquo;s bottom line?</p><p>Wallace Hopp is a senior associate dean at the Roth School of Business at the University of Michigan - and it happens he also lives part time in Chicago.</p><p>He says Shinola represents a feel good story for Detroit - and the focus on high-end quality goods will help Shinola, as a business, do well for itself.</p><p>&ldquo;A passion for quality goes a long way,&rdquo; Hopp said. &ldquo;We forget that at the end of the day you&rsquo;re buying an experience - and so focusing on that is really important - people will pay for quality.&rdquo;</p><p>But when it comes to Shinola helping Detroit&rsquo;s economy, Hopp says the company will likely create&nbsp; more of a ripple than a splash. On the jobs side, for example, they&rsquo;re only a small factory, with only so many positions.</p><p>&ldquo;The truth is, that most of the manufacturing that we see swinging back into the U.S. has many, many fewer jobs than the manufacturing that left a couple of decades ago,&rdquo; Hopp said.</p><p>But he says, think about how Silicon Valley works: One of the reasons it rules the tech industry is everyone who lives there has experience in the industry. They jump from firm to firm and businesses end up training each others&rsquo; workforce, creating a vibrant environment that multiplies success.</p><p>&ldquo;We call it network clustering...you cluster for the benefits of being around other manufacturers. And once upon a time here in Detroit we had a really powerful network for the auto industry.&rdquo; Hopp said. &ldquo;Now that&rsquo;s kind of frayed at the edges, obviously, and Detroit&rsquo;s not what it once was,&nbsp; but it&rsquo;s not nothing in manufacturing.&rdquo;</p><p>So while high end watches and bikes alone might not be enough to scrub away the graffiti and pay Motor City&rsquo;s bills, over the next few years, Hopp says, Shinola could be a harbinger for a comeback of American manufacturing in the industrial Midwest.</p><p><em>Lauren Chooljian is a WBEZ reporter. Follow her <a href="http://www.google.com/url?q=http%3A%2F%2Ftwitter.com%2Flaurenchooljian&amp;sa=D&amp;sntz=1&amp;usg=AFQjCNHcnGpDz9asMs9-8gT33xl2O3rxmA">@laurenchooljian</a>.</em><br />&nbsp;</p></p> Thu, 03 Apr 2014 07:43:00 -0500 http://www.wbez.org/news/selling-bikes-watches-and-civic-pride-109960 Quinn’s tax refund plan locks out most Illinois renters http://www.wbez.org/news/quinn%E2%80%99s-tax-refund-plan-locks-out-most-illinois-renters-109939 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/For rent WBEZ file.jpg" alt="" /><p><p><iframe frameborder="no" height="166" scrolling="no" src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/142354518&amp;color=ff5500&amp;auto_play=false&amp;hide_related=false&amp;show_artwork=true" width="100%"></iframe></p><p>Illinois Gov. Pat Quinn&rsquo;s proposal to give Illinois homeowners&rsquo; a guaranteed $500 property tax refund could leave most renters out in the cold, according to tax experts and renters&rsquo; rights groups.</p><p dir="ltr">The election-year budget proposal Quinn presented to lawmakers <a href="http://www.wbez.org/news/quinn-predicts-radical-budget-cuts-without-revenue-109918">last week</a> came with a big, bitter pill: his call to keep the state&rsquo;s personal income tax rate at 5 percent next year, &nbsp;instead of letting it drop down to 3.75 percent as was the <a href="http://www.wbez.org/story/income-tax/temporary-tax-hikes-dont-always-stay-way">original plan</a>.</p><p>But Quinn, a Democrat, also offered some sugar in last week&rsquo;s budget speech: a $500 tax refund for every Illinois homeowner, every year.</p><p>That might sound pretty sweet for the 92 percent of Illinois homeowners Quinn says would benefit from that refund. (The 8 percent of homeowners who pay more than $10,000 in property taxes would see their refunds shrink.)</p><p>But as for all you apartment dwellers out there?</p><p>&ldquo;Renters are not going to share in any of the givebacks in terms of the property tax rebate,&rdquo; said Laurence Msall, who heads up the Chicago-based Civic Federation, a budget watchdog group.</p><p>Msall points out Illinois&rsquo; property tax credit <a href="http://tax.illinois.gov/Publications/Pubs/Pub-108.pdf">does not apply</a> to renters, even though they do pay for property taxes indirectly each time they cut their landlord a check.</p><p>That means a third of Illinois&rsquo; households -- and more than half of Chicago&rsquo;s -- are not eligible for Quinn&rsquo;s proposed refund.</p><p>But most will still be stuck subsidizing the program with their income tax dollars, Msall said.</p><p>&ldquo;The overall population -- everyone at every level who earns income -- is gonna pay a higher tax rate going forward than they would otherwise if the temporary income tax were allowed to expire,&rdquo; he said.</p><p>Under the governor&#39;s plan to maintain the current 5 percent personal income tax rate, instead of letting it drop next year, Illinoians who make more than $40,000 in taxable income would end up paying more in taxes than the $500 refund is worth, Msall said.</p><p>If approved by the state legislature, the refunds would cost nearly $1.3 billion next year -- more than twice as much as the current property tax credit program.</p><p>Quinn says it is part of his larger plan to give homeowners and working families some relief from an onerous, unfair property tax system that disproportionately benefits high-income areas.</p><p>But renters should be included too, said John Bartlett, who leads up the Metropolitan Tenants Organization, a Chicago renters&rsquo; rights group.</p><p>&ldquo;Renters tend to be the lowest-income population in Illinois, and they&rsquo;re not gonna be getting a tax break, and that&rsquo;s really unfortunate and unfair because they probably need it the most,&rdquo; Bartlett said.</p><p>When asked this week about the effects of his budget proposal on renters, Quinn pointed to the state&rsquo;s <a href="http://www.dhs.state.il.us/page.aspx?item=34995">Earned Income Tax Credit</a>, a tax break for the working poor. It&rsquo;s for individuals who make less than $14,340 a year, or less than $48,378 for a family of four.</p><p>For a family, that is a tax break worth a few thousand dollars -- and over the next five years, Quinn wants to double the EITC.</p><p>&ldquo;There are many, many renters who would benefit from that particular tax relief measure,&rdquo; Quinn said Thursday. &ldquo;We&rsquo;ve already done it once. We&rsquo;re gonna do it again. We&rsquo;re gonna double the value of the Earned Income Tax Credit which helps so many renting families raising children.&rdquo;</p><p>But only about a quarter of Illinois rental households would qualify for the EITC, according to a WBEZ analysis of U.S. Census data. The vast majority would end up paying the current heightened income tax rate, while not benefitting from Quinn&rsquo;s refund.</p><p>University of Illinois Professor David Merriman says that leaves middle-class renters in the lurch.</p><p>&ldquo;We&rsquo;re talking about people whose incomes [are] in the 40, 50, 60,000 dollar range and are renters,&rdquo; Merriman said. &ldquo;Those are the people who I think are gonna get hit the hardest.&rdquo;</p><p>Quinn&rsquo;s administration points out it does not want to raise the current personal income tax rate next year, but wants to maintain the current 5 percent level. But it is also not lowering the rate, as was the original plan.</p><p>Kevin Jackson, who heads up the Chicago Rehab Network coalition, says that is especially bad news right now, as rents in Illinois are already becoming less affordable and more burdensome to tenants.</p><p>&ldquo;Renters are a vibrant and significant part of the economy,&rdquo; Jackson said. &ldquo;And so if we&rsquo;re thinking about this homeowner support as a way of reinforcing economic activity, renters should also be included.&rdquo;</p><p>Twenty-two other states and the District of Columbia include renters in some sort of tax benefit program, according to the <a href="http://www.lincolninst.edu/subcenters/significant-features-property-tax/Report_Residential_Property_Tax_Relief_Programs.aspx">Lincoln Land Institute</a>.</p><p>Quinn would not say whether he would seriously consider adding Illinois to that list.</p><p><a href="http://www.wbez.org/users/akeefe">Alex Keefe</a> is a political reporter at WBEZ. You can follow him on <a href="https://twitter.com/WBEZpolitics">Twitter</a> and <a href="https://plus.google.com/102759794640397640028">Googl</a><u>e+</u></p><p><em>Correction: An earlier version of this story incorrectly stated that Quinn&#39;s plan includes doubling the state&#39;s Earned Income Tax Credit next year. In fact, the governor&#39;s proposal would double the EITC over the next five years.&nbsp;</em></p></p> Fri, 28 Mar 2014 18:14:00 -0500 http://www.wbez.org/news/quinn%E2%80%99s-tax-refund-plan-locks-out-most-illinois-renters-109939 Illinois gets federal money to demolish blighted homes http://www.wbez.org/news/illinois-gets-federal-money-demolish-blighted-homes-109930 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/blight.png" alt="" /><p><p>Some parts of Illinois&rsquo; housing market seem to be on a somewhat steady recovery. But communities such as Englewood on Chicago&rsquo;s South Side struggle to even stabilize.</p><p>Illinois was awarded $445 million in federal foreclosure prevention resources under the U.S. Treasury Department&rsquo;s Hardest Hit Fund. Today, the Treasury announced it will allow $30 million from that fund to help demolish vacant properties in blighted areas around the state.</p><p>Mark McArdle is the chief homeowner preservation officer of the Treasury Department. He says blighted properties not only bring down property values in a neighborhood, but can attract crime.</p><p>&ldquo;You have homeowners that are trying everything they can to stay in their house, but when they have two or three vacant houses on their block at some point they say, &lsquo;Why am I fighting so hard to stay in this home?&rsquo; So this [puts them] in a more sustainable position,&rdquo; he said.</p><p>McArdle said only a few other states have used the funds for demolition. Michigan was the first. He said it is too early to quantify direct results, but said research shows blighted homes are a destabilizing force.</p><p>&ldquo;You want to keep the person not only in their home but make sure the neighborhood where that home is located is stable as well,&rdquo; he said.</p><p>Not everyone in the neighborhood will agree with demolition as a solution to stabilize. Mary Kenney, executive director for Illinois Housing Development Authority said the state has helped to keep people in their homes and helped rehab troubled properties, but not every house can be saved. Kenney said demolition is the next step in neighborhood stabilization.</p><p>&ldquo;Aside from the fact that they&rsquo;re eyesores, they&rsquo;re often dangerous. We see a lot of mischief around these properties. I think our first goal is to really make sure we&rsquo;re eliminating that from these communities,&rdquo; Kenney said.</p><p>Eligible communities can apply for demolition assistance starting this summer and will also be responsible for upkeep of the resulting vacant lot.</p><p>The first demolitions with federal funding could happen as soon as this fall.</p><p><em>Susie An is WBEZ&rsquo;s business reporter. Follow her <a href="http://twitter.com/soosieon" target="_blank">@soosieon</a>.&nbsp;</em></p></p> Thu, 27 Mar 2014 16:17:00 -0500 http://www.wbez.org/news/illinois-gets-federal-money-demolish-blighted-homes-109930 In tougher market, taxi drivers sue Chicago cab companies http://www.wbez.org/news/tougher-market-taxi-drivers-sue-chicago-cab-companies-109921 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/taxis.jpg" alt="" /><p><p>Chicago cab drivers today added to the frenzy of litigation that has recently besieged the for-hire transportation industry, filing a federal lawsuit against the city&rsquo;s four largest cab companies. They&rsquo;ve enlisted the help of a Boston labor attorney who has had success in arguing that taxi drivers are inappropriately classified as &ldquo;independent contractors,&rdquo; rather than &ldquo;employees&rdquo; of cab companies. The Chicago drivers seek class-action status, and significant back pay.</p><p>&ldquo;You know, I had a guy pull a gun on me the other day,&rdquo; recounted Karen Chamberlain, a longtime Chicago taxi driver and a plaintiff in the case, &ldquo;and I looked at him, I&rsquo;m going, &lsquo;you better shoot me, because I&rsquo;m not in the mood.&rsquo; And he got out.&rdquo;</p><p>Chamberlain laughs at the incident now, but says it&rsquo;s harder to find the comic relief these days in a job that&rsquo;s always had its share of ups and downs.</p><p>&ldquo;I used to work 4-5 days a week, 8-10 hours a day. Now, to make the same amount of money &ndash; and I&rsquo;m not even making as much &ndash; I&rsquo;m working 7 days a week,&rdquo; she said. &ldquo;I take three days off a year now. And I&rsquo;m not making the same amount of money. And I&rsquo;m working 10-12 hours a day.&rdquo;</p><p>Amid higher gas prices and a lingering recession, Chamberlain says business has been a struggle. Drivers have not seen an increase in taxi meter rates in eight years, and Chicago voters last week rejected a referendum on the primary ballot to raise fares. But Chamberlain says the city did the most harm when it allowed cab companies to raise lease rates on their vehicles two years ago.</p><p>&ldquo;In 2006 I was paying $450 a week for my taxi. Right now I am paying $752 a week for my cab,&rdquo; Chamberlain said. She also blames newly popular&nbsp;<a href="http://www.wbez.org/news/cab-livery-companies-sue-city-over-rideshare-companies-109655" id="docs-internal-guid-a50f0055-0050-9da4-cf44-75a347e40a83">&ldquo;ride sharing&rdquo; companies</a>, such as uberX, Lyft and Sidecar, for taking business away from taxis. The companies make smartphone apps that help regular people use their cars for hire.</p><p>&ldquo;I&rsquo;m sitting there waiting for a fare and some guy with a pink mustache drives up and takes a fare,&rdquo; she said, referring to the fuzzy emblem that Lyft drivers mount on the front of their cars.</p><p>&ldquo;You see cab drivers out there,&rdquo; said Shannon Liss-Riordan, the Boston-based attorney who represents Chamberlain and the other plaintiffs in the lawsuit. &ldquo;They&rsquo;re working around the clock, long, long, long hours for very, very, very little pay. And this system of the drivers being classified as independent contractors really contributes (to the problem).&rdquo;</p><p>Liss-Riordan is fighting a similar case on behalf of Boston taxi drivers, and has had some initial success. Last year she got a judge to freeze the assets of Boston&rsquo;s largest taxi fleet owner. The case isn&rsquo;t over yet, but the court said there&rsquo;s a &ldquo;reasonable likelihood&rdquo; that cab drivers were misclassified.</p><p>She says labor laws in Illinois are similar to those in Massachusetts, which is why she believes her plaintiffs here will have a chance. In the Chicago lawsuit, Liss-Riordan expects the question to come down to whether the cab companies can prove that taxi drivers perform their service outside the companies&rsquo; usual place of business.</p><p>&ldquo;The case law in the driving context establishes that the place of business, if you&rsquo;re a driver, is out on the road,&rdquo; said Liss-Riordan. She does not believe that cab companies will be able to prove that cab drivers perform their work anywhere else. The cab companies named in the lawsuit were not prepared to speak with WBEZ on Wednesday.</p><p>The outcome of the lawsuit is likely many years off, but if the drivers prevail, it could have significant repercussions throughout Chicago&rsquo;s taxi industry. For starters, cab companies would be required to pay back wages for thousands of cab drivers, dating back to ten years, if it&rsquo;s found that drivers earned less than the hourly minimum wage.</p><p>&ldquo;Tens or even hundreds of millions of dollars are at stake,&rdquo; said attorney James Zouras, who is working with Liss-Riordan to represent the drivers. It would also mean that cab drivers would be entitled to overtime pay, among other benefits. Zouras said if a court rules that cab drivers are &ldquo;employees,&rdquo; it would also allow them to unionize.</p><p>Gregory McGee, another plaintiff in the case, has tried to organize Chicago cab drivers for nearly twelve years, with little success. He said a win in the courts could finally give many the confidence to unite. Still, he said he laments the extent to which conditions in the industry have already deteriorated.</p><p>&ldquo;I am now 54 years old, I have no savings, and I have had no days off for practical purposes,&rdquo; he said. &ldquo;As a matter of fact, I probably have no more than 30 full calendar days off, where I did nothing cab-related, in the almost twelve years now.&rdquo;</p><p>The lawsuit now becomes the second in federal court, where Chicago cab drivers assert that they&rsquo;ve been misclassified. The other,&nbsp;<a href="http://www.wbez.org/cabbie%E2%80%99s-lawsuit-against-chicago-moves-forward-104355" id="docs-internal-guid-a50f0055-0050-f8e7-9a90-ac65802c6419">brought by taxi driver Melissa Callahan</a>, seeks to show that cab drivers should properly be classified as employees of the City of Chicago. Liss-Riordan said she is not concerned about having these two suits progressing simultaneously.</p><p>&ldquo;It&rsquo;s possible for employees to have multiple employers,&rdquo; she said, &ldquo;So they&rsquo;re not mutually exclusive.&rdquo;</p><p>McGee said if anything, the two suits bolster taxi drivers&rsquo; argument that the industry needs to be restructured. &ldquo;That&rsquo;s how serious the situation is here, folks, that we have not just one class action (lawsuit) in the Northern District Federal Court here in the Seventh Circuit,&rdquo; he said, &ldquo;we have two now, as of today.&rdquo;</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her&nbsp;<a href="https://twitter.com/oyousef" id="docs-internal-guid-a50f0055-0051-42cc-56fa-d64424314b8e">@oyousef</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>.</em></p></p> Wed, 26 Mar 2014 16:30:00 -0500 http://www.wbez.org/news/tougher-market-taxi-drivers-sue-chicago-cab-companies-109921 BP contains oil spill in Lake Michigan, begins cleanup http://www.wbez.org/news/bp-contains-oil-spill-lake-michigan-begins-cleanup-109914 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/puente whiting.PNG" alt="" /><p><p>WHITING, Ind. &mdash; BP says it has contained and is now cleaning up crude oil that spilled into Lake Michigan&nbsp; from its Whiting, Indiana refinery near Chicago.</p><p>The spill was detected about 4:30 Monday afternoon.</p><p>Reminiscent of the tar balls collected off the Gulf Coast after a different BP spill a few years ago, this one was confined to a shallow cove between the massive refinery and a steel mill.</p><p>BP spokesman Scott Dean said it appears the crude oil somehow seeped into the refinery&#39;s water filtration plant adjacent to the lake.</p><p>&ldquo;We were able to quickly deploy our oil spill response contractor and we&rsquo;ve seen the leak stopped yesterday and we&rsquo;ve got a containment boom in place that&rsquo;s holding the amount of oil that was released from the discharge into this cove,&rdquo; Dean said.</p><p>Dean said there have been no injuries, and cleanup activities along the 2,700 feet of affected shore line are still going on.</p><p>&ldquo;The good news is the leak stopped and we&rsquo;ve got it contained,&rdquo; Dean said.</p><p>Dean said the cold temperature of the lake and air may have actually aided in containing the oil, turning the crude oil into like a gel-like substance.</p><p>But questions remain about how the crude oil got into the lake in the first place.</p><p>BP just completed a $4 billion modernization to the 100-year-old Whiting Refinery, the largest inland refinery in the United States.</p><p>Sources helping with the cleanup estimate about a dozen barrels of crude spilled into the lake, with some containing what&rsquo;s considered sweet crude oil and some containing oil from Canada&rsquo;s tar sands region.</p><p>After discovering the discharge, BP notified the U.S. Coast Guard, U.S. EPA and the Indiana Department of Environmental Management. Representatives from the agencies were at the refinery Monday evening.</p><p>BP says it will continue to work in full cooperation with the agencies to ensure the protection of personnel, the environment and surrounding communities.</p><p>The U.S. EPA says is unaware of any other spills from the refinery.</p><p>Mike Beslow, the onsite coordinator for the EPA at the scene, said the oil spill should not affect the quality of Lake Michigan&rsquo;s drinking water.</p><p>He says it appears the oil was released from one of BP&rsquo;s separators into the lake.</p><p>Beslow says the separator is like a holding pond and normally does not have oil in it.<br />He adds that BP&rsquo;s own systems immediately detected oil that got into the water filtration plant and into the lake.</p><p>Beslow says it&rsquo;s too early to determine if any fines will be assessed against BP for the spill.</p></p> Tue, 25 Mar 2014 13:38:00 -0500 http://www.wbez.org/news/bp-contains-oil-spill-lake-michigan-begins-cleanup-109914 Shadowy lobbyists influence rideshare debate http://www.wbez.org/news/shadowy-lobbyists-influence-rideshare-debate-109770 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/Rideshare lawsuit_0.jpg" alt="" /><p><p>The fight over the future of ridesharing in Chicago is increasingly being waged through shadowy lobbyists. This has some aldermen concerned about how that could influence the current regulatory debate.</p><p>At a hearing at City Council&rsquo;s Joint Committee on Transportation and Finance on Monday, some noted that the lobbying activity on the issue appeared different from the usual at City Hall. They said they were disturbed by the apparent emergence of advocates for ride-sharing companies like Uber, Lyft and Sidecar, who have not identified their interests upfront.</p><p>&ldquo;I&rsquo;m concerned with the amount of lobbyists on this that we won&rsquo;t hear from today,&rdquo; said Ald. Bob Fioretti (2nd), after noting that he had been handed an unmarked packet of information on his way into the hearing, with no information about its source. &ldquo;I&rsquo;d like to see all the lobbyists come up and forward on who we&rsquo;re dealing with and what&rsquo;s happening in this controversy here.&rdquo;</p><p>Ridesharing services offer smartphone apps to connect people with cars to people who need rides. Drivers do not have public chauffeur licenses, and they use their personal vehicles. Lately, several cities in the country, including Chicago, have been considering whether, and how, to regulate these services to ensure public safety.</p><p>Earlier this month, city officials offered <a href="http://www.wbez.org/news/city-moves-regulate-rideshare-companies-109639" target="_blank">competing proposals</a> on rules for ridesharing. Almost immediately, media outlets (including WBEZ) began receiving phone calls and emails about the issue from a public relations firm that did not immediately identify its ties to the ridesharing industry.</p><p>A Chicago-based communications firm called Resolute Consulting has offered to connect reporters with community-based organizations in neighborhoods such as Little Village, Belmont-Cragin and Pilsen, who support ridesharing services. It did not initially disclose that its client is Uber, one of the technology companies behind a ridesharing app.</p><p>The consulting firm similarly publicized a press conference led by Alderman Joe Moreno (1st) just minutes before Monday&rsquo;s committee hearing on ridesharing rules. Moreno was joined by drivers and passengers of ridesharing services to voice support of &ldquo;reasonable regulations&rdquo; for the technologies.</p><p>&ldquo;Today is, I think, the difference between the Flintstones and the Jetsons,&rdquo; said Moreno. &ldquo;And we&rsquo;re here today to support the Jetsons.&rdquo;</p><p>Moreno said regulating ridesharing services under taxi rules, as proposed in a resolution by Aldermen Anthony Beale (9th) and Ed Burke (14th), would stifle innovation in Chicago. Other supporters at the press conference said they feel safe using ridesharing services, and that driving for these services helps them supplement low incomes.</p><p>They denied that a company had lobbied them to be at the press conference, with Moreno adding that riders, drivers and the industry are organizing on their own around the issue. But reporters were handed unlabeled, white folders containing reports about Uber, copies of letters written to the city on behalf of Uber, and other information highlighting troubles within the city&rsquo;s taxi industry. Resolute Consulting&rsquo;s name is nowhere cited in the packet, though a listed contact&rsquo;s name and number are associated with the company.</p><p>Additionally, all the riders and drivers present at the press conference disclosed, upon being asked, that they were only affiliated with Uber, rather than other ridesharing companies. Afterward, a consultant for Resolute told WBEZ that Uber had put out a request to its members to organize on behalf of limiting city regulations. Alderman Moreno admitted that he had met with an Uber lobbyist, whose name, he said, he could not recall. But he maintained that his advocacy on the issue was motivated by concerns he had heard from constituents who use the service.</p><p>&ldquo;There are lobbyists on both sides of this issue,&rdquo; Moreno offered at the committee hearing, in response to Fioretti&rsquo;s suggestion that ridesharing companies have been surreptitious in their lobbying effort. &ldquo;It&rsquo;s not just lobbyists that are on the rideshare side,&rdquo; he added, &ldquo;There&rsquo;s lobbyists that we all know that are on the taxi side of this, as well.&rdquo;</p><p>Interests aligned with the taxi industry have also mounted their own public campaign. In recent weeks, public relations firm Edelman has reached out to the media on behalf of client Taxi Magic, which produces an alternative transportation app. Taxi Magic partners with nine metro area cab companies, including Yellow Cab and Checker. Yellow is among several plaintiffs who recently filed a <a href="http://www.wbez.org/news/cab-livery-companies-sue-city-over-rideshare-companies-109655" target="_blank">federal lawsuit</a> against the City of Chicago, demanding that the city regulate ridesharing apps as it does their industry.</p><p>The coalition of companies behind the lawsuit have also hired former Daley administration lawyer, and City Hall insider, Mara Georges to represent their interests to aldermen in this debate. At Monday&rsquo;s committee hearing, Georges started off testimony by offering evidence to bolster Aldermen Burke and Beale&rsquo;s resolution to treat ridesharing companies the same as taxis.</p><p>In 2014, city data show the industry has four registered lobbyists at City Hall. Among ridesharing companies, Uber has three and Lyft has one. A single lobbyist represents taxi drivers&rsquo; interests.</p><p><em>Odette Yousef is WBEZ&rsquo;s North Side Bureau reporter. Follow her <a href="https://twitter.com/oyousef">@oyousef</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>.</em></p></p> Tue, 25 Feb 2014 17:04:00 -0600 http://www.wbez.org/news/shadowy-lobbyists-influence-rideshare-debate-109770 Metal shredder proposed for Pilsen clears zoning hurdle http://www.wbez.org/news/metal-shredder-proposed-pilsen-clears-zoning-hurdle-109755 <p><p><img alt="" class="image-original_image" src="http://www.wbez.org/system/files/styles/original_image/llo/insert-images/NuestroPilsenSCALED.jpg" style="margin: 4px 0px 0px 0px; float: left; height: 212px; width: 300px;" title="Before a Chicago Zoning Board of Appeals hearing Friday, neighborhood residents in favor of the facility tout the jobs it would create and downplay environmental concerns. (WBEZ/Chip Mitchell)" />A proposed metal shredder near a high school on Chicago&rsquo;s Southwest Side&nbsp;has cleared a key hurdle.</p><p>The city&rsquo;s Zoning Board of Appeals voted unanimously Friday night to approve a special-use application for the project, according to Peter Strazzabosco, deputy commissioner of the Chicago Department of Planning and Development, which provides the board&rsquo;s staffing.</p><p>Board chairman Jonathan Swain and members Catherine Budzinski and Sol Flores were present for the closed-door vote, Strazzabosco said.</p><p>The application came from Pure Metal Recycling, LLC, a company with ties to Acme Metal Refinery, a major contributor to a campaign fund controlled by Pilsen&rsquo;s alderman, Danny Solis (25th). Acme was in the public eye last August after the Internal Revenue Service raided the company&rsquo;s Bridgeport headquarters.</p><p>Solis endorsed the proposed Pilsen metal shredder in a letter presented to the zoning board Friday.</p><p>The board vote followed more than four hours of testimony. Rev. Emma Lozano, an immigrant-rights advocate and pastor of nearby Lincoln United Methodist, led neighborhood residents in favor of the metal shredder.</p><p>&ldquo;The residents of Pilsen, including the members of my church, want Pilsen to be a place where we can both live and work,&rdquo; Lozano told the board, noting the neighborhood&rsquo;s creeping gentrification. &ldquo;We want to live in a community which is mixed &mdash; residential and manufacturing.&rdquo;</p><p>Mark Swedlow, Pure Metal Recycling&rsquo;s president, last week signed a one-page &ldquo;covenant&rdquo; with Solis and community residents. In the document, the company vows to give &ldquo;first priority in hiring to Pilsen residents&rdquo; and to not discriminate against them &ldquo;because of immigration status or past criminal records.&rdquo;</p><p>The metal shredder would stand on a 15-acre industrial parcel along South Loomis Avenue just south of West Cermak Road. The land is across the road from Benito Juárez Community Academy, the neighborhood&rsquo;s biggest high school.</p><p>The project&rsquo;s opponents, including the Pilsen Alliance and the Pilsen Environmental Rights and Reform Organization (PERRO), are complaining about Acme&rsquo;s record in Bridgeport and warning that metal shredders are known for pollution, fires and explosions. They are also voicing concerns about increased traffic and noise.</p><p>&ldquo;We don&rsquo;t want another Sims in the neighborhood,&rdquo; PERRO organizer Jerry Mead-Lucero said, referring to an existing Pilsen metal shredder owned by Australian-based Sims Metal Management.</p><p>Pilsen environmentalists led a campaign to close Fisk Generating Station, a coal-fired power plant that had operated in the neighborhood for more than a century. In 2012, California-based Edison International shut down Fisk and a coal-fired generator in nearby Little Village.</p><p><em><a href="http://www.wbez.org/users/cmitchell-0">Chip Mitchell</a> is WBEZ&rsquo;s West Side bureau reporter. Follow him on Twitter <a href="https://twitter.com/ChipMitchell1">@ChipMitchell1</a> and <a href="https://twitter.com/WBEZoutloud">@WBEZoutloud</a>, and connect with him through <a href="https://www.facebook.com/chipmitchell1">Facebook</a>, <a href="https://plus.google.com/111079509307132701769" rel="me">Google+</a> and <a href="http://www.linkedin.com/in/ChipMitchell1">LinkedIn</a>.</em></p></p> Sun, 23 Feb 2014 21:53:00 -0600 http://www.wbez.org/news/metal-shredder-proposed-pilsen-clears-zoning-hurdle-109755 Economist: College football like NFL but for pay http://www.wbez.org/news/economist-college-football-nfl-pay-109737 <img typeof="foaf:Image" src="http://llnw.wbez.org/main-images/AP565441140271.jpg" alt="" /><p><p>Major colleges run their football teams just like those in the NFL, relying on players to generate millions of dollars in revenue, an economist testified Wednesday before a federal agency that will decide whether Northwestern football players may form the first union for college athletes in U.S. history.</p><p>&quot;The difference would be ... the NFL pays their players,&quot; Southern Utah University sports economist David Berri told the National Labor Relations Board on the second day of a hearing in Chicago that could stretch into Friday. That colleges don&#39;t pay their football players, he said, likely boosts their programs&#39; profitability further.</p><p>The NLRB is considering whether Wildcats&#39; football players can be categorized under U.S. law as employees, which would give them rights to unionize. The university, the Big Ten Conference and NCAA have all maintained college players are student-athletes, not employees.</p><p>Attorneys for Northwestern began presenting their case opposing unionization, endeavoring to show that the newly formed College Athletes Players Association would provide little tangible benefit to the Northwestern players.</p><p>Asked whether one of CAPA&#39;s stated goals &mdash; to improve football-player graduation rates &mdash; made any sense for Northwestern, the university&#39;s associate athletic director, Brian Baptiste, noted the school&#39;s rate was already No. 1 in the nation &mdash; at 97 percent.</p><p>&quot;I guess you can increase 97 percent,&quot; he said wryly.</p><p>Union supporters say they would be able to force schools to better protect football players from head injuries. Baptiste suggested that only the NCAA, with oversight power across the country, was in position to address that.</p><p>&quot;That has to be done on a national level,&quot; he said. &quot;Northwestern wouldn&#39;t have control over that.&quot;</p><p>Supporters argue a union would provide athletes a vehicle to lobby for greater financial security. They contend scholarships sometimes don&#39;t even cover livings expenses for a full year.</p><p>Baptiste said NCAA rules tie Northwestern&#39;s hands, and they would bar it from assenting to demands from an on-campus football union, including calls to increase the value of scholarships. He said the NCAA caps scholarship amounts.</p><p>Berri, the economist, was called to testify on behalf of the proposed union, which is pushing the unionization bid with support from the United Steelworkers. He sought to illustrate how the relationship between Northwestern and its football players was one of employer to employees.</p><p>Profit numbers attest to the program being a commercial enterprise, he told the hearing,</p><p>Northwestern&#39;s football program reported a total profit of $76 million from 2003 to 2012, with revenues of $235 million and costs of $159 million, Berri testified. The numbers were adjusted for inflation for the private school.</p><p>Berri conceded he didn&#39;t know that maintenance of the Wildcats&#39; stadium was not included in the expense numbers. And he said he also did not know if football profits made up for losses in other, less popular school sports.</p><p>Schools with revenue-generating football teams were in the business of entertainment, Berri said. Asked who provided those services, he responded, &quot;Players are the ones you are watching.&quot;</p><p>Northwestern attorney Alex Barbour pressed Berri about whether he was trying to say the school exploits its football players.</p><p>&quot;There is an economic definition of the word &#39;exploitation,&#39;&quot; he responded. &quot;A worker is exploited ... if their economic value is greater than their wages. ... By that definition, they are exploited.&quot;</p><p>Whether the economist should have been allowed to testify was a point of contention, with Barbour complaining that Berri&#39;s analysis was irrelevant to the central question: Are college football players are employees?</p><p>But after allow the side to debate the issue, the hearing officer overseeing the case, Joyce Hofstra, agreed to let Berri speak, saying the hearing was &quot;novel&quot; and she would err on the side of admitting evidence.</p><p>Barbour had said during his opening statement that allowing a college athletes&#39; union to collectively bargain would be &quot;a Rube Goldberg contraption that would not work in the real world&quot; and would fundamentally change college sports.</p><p>Berri, though, pointed to the NFL and its embrace of a union, saying unionization in its case &quot;did not cause the professional sport to collapse.&quot;</p><p>&nbsp;</p></p> Wed, 19 Feb 2014 16:38:00 -0600 http://www.wbez.org/news/economist-college-football-nfl-pay-109737