Business
Column: Trump-friendly billionaires are taking aim at the federal agencies that protect workers and consumers
“If the law is against you, talk about the evidence. If the evidence is against you, talk about the law, and, … if the law and the evidence are both against you, then pound on the table and yell like hell.”
Thus the poet Carl Sandburg’s version of an ancient lawyer’s adage in his epic poem, “The People, Yes.” It isn’t his fault that his rendering is incomplete, since he was writing in 1936 and the modern legal mind has cooked up a further advisory, applicable when the entity against you is a government agency: If pounding the table and yelling won’t succeed, then get your adversary declared unconstitutional.
That’s the weapon being wielded at this moment against the National Labor Relations Board and the Consumer Financial Protection Bureau. The first was created by Congress in 1935 to protect workers’ organizing and bargaining rights, the second in 2010 to protect consumers from ripoffs by financial service firms.
The NLRB and the courts have recognized for years that delay to a union certification and the bargaining process causes irreparable loss of support among employees.
— Teamster attorney Julie Gutman Dickinson
Those agencies are under assault by two of the richest men in the world: Elon Musk, who controls Tesla and SpaceX, among other enterprises, and Jeff Bezos, the founder and executive chair of Amazon. To put it succinctly, these are agencies devoted to serving the little guy by fighting battles against Big Business. Is there any mystery about why they’re targeted by billionaires?
I reported in January on the effort by SpaceX to persuade a federal judge to declare the NLRB unconstitutional.
Amazon is pursuing the same goal in its own fight with the NLRB, in which it’s trying to stave off an order that it enter into contract negotiations with 8,000 workers at a warehouse in Staten Island, N.Y. Amazon is also trying to overturn the victory in the workers’ 2022 vote by a union that subsequently affiliated with the Teamsters.
As for the CFPB, Musk on Nov. 26 tweeted, “Delete CFPB…. There are too many duplicative regulatory agencies.” He was responding to a fatuous spiel by venture investor Marc Andreessen, who in an appearance on Joe Rogan’s webcast called the CFPB “Elizabeth Warren’s personal agency, which she gets to control.” Sen. Warren (D-Mass.) conceived of the agency and pushed for its creation after the recession of 2008, but she has zero “control” over it.
As Helaine Olen of the American Economic Liberties Project has observed, what really sticks in Andreessen’s craw about the CFPB is that it has worked to protect consumers from financial services outfits, including fintech firms in which Andreessen, along with other Silicon Valley bros, has invested. (I asked Andreessen via his substack column to expand on his claims, but haven’t heard back.) Rogan, wearing his persona as a babe-in-the-woods naif, listened to this nonsense in slack-jawed stupefaction.
“Duplicative”? What makes the CFPB so important is that it’s virtually unique among federal agencies in possessing the explicit responsibility to protect ordinary Americans from the depredations of financial snake-oil sales forces.
In its more than 13 years of existence, the bureau has secured more than $17.5 billion in compensation and other relief for consumers mulcted by the financial services industry and built up a victims relief fund worth more than $4 billion.
Musk’s campaign against these two agencies warrants notice because of his elevated role within the coming Trump administration. Along with Vivek Ramaswamy, another right-wing activist, he has been anointed as head of a Department of Government Efficiency, with the goal of rooting out supposed sources of government waste. If Musk uses that perch to wage his personal campaign against the NLRB, that could make things, um, complicated for Trump’s nominee for Secretary of Labor, the pro-union Lori Chavez-DeRemer.
That brings us to the claims that the agencies are unconstitutional. I asked SpaceX and Amazon to comment on their lawsuits. SpaceX hasn’t replied. Amazon, through spokesperson Eileen Hards, said it filed its lawsuit raising the issue “because we believe the NLRB is acting beyond its mandate, including by having its Members serving as both prosecutors and judges on the same case. This is a clear violation of separation of powers, and furthermore, they feel emboldened to do so because they are unconstitutionally insulated from removal.”
The company said further that it doesn’t believe the “election process was fair, legitimate, or representative of what the majority of our team wants…. We’ll continue to use all legal avenues available to us as we believe the decision will be overturned when it’s reviewed by an unbiased court.”
The unconstitutionality charge was laid against the CFPB by payday lending firms, supported by credit unions, the U.S. Chamber of Commerce and a passel of right-wing legal organizations, which based their case on the fact that the bureau’s funding comes from the Federal Reserve rather than the U.S. Treasury.
The Supreme Court rejected that argument by a 7-2 vote in May.
The claims against the National Labor Relations Board are different. In separate lawsuits, SpaceX and Amazon assert that because the board members and the board’s administrative law judges are insulated from at-will removal by the president, it’s in violation of several constitutional principles and provisions.
SpaceX’s case arose from an NLRB accusation that it improperly fired nine employees in 2022 for publishing an open letter complaining about safety provisions at the company’s plants. union organizing activities, among other illegal acts. Its lawsuit has had a complicated procedural history.
SpaceX originally filed its lawsuit in federal court in Brownsville, Texas, where it had a 50-50 chance of drawing a Trump-appointed judge but where appeals go to the notably conservative 5th Circuit Court of Appeals, in what appeared to be a flagrant example of forum-shopping.
As it happened, the case came before Rolando Olvera, an Obama appointee. He didn’t think much of a Hawthorne-based company suing the NLRB, which is located in Washington, D.C., over the firings of employees who mostly worked in California. (The lone exception was an employee located in Washington but whose supervisors were in California.)
“It is undisputed that no party resides in the Southern District of Texas,” Olvera ruled. He ordered the case transferred to federal court in Los Angeles. SpaceX appealed to the 5th Circuit Court, which obligingly ordered the case returned to Texas. The case is currently held in abeyance while the appeals court ponders various issues.
Amazon filed its case against the NLRB in September in San Antonio federal court, where three of the five judges are Republican-appointees but appeals also go to the 5th Circuit, even though the company’s dispute with the NLRB involves Teamster-represented workers in Staten Island, N.Y. It was assigned to Xavier Rodriguez, an appointee of George W. Bush.
One can’t overstate the stakes in this battle for the company and the union. The Staten Island warehouse was the first Amazon facility to win a union representation campaign.
Amazon is seeking an injunction blocking the NLRB from “pursuing unconstitutional administrative proceedings,” asserting that the board members are “insulated from removal in contravention of Article II of the Constitution.” The NLRB’s structure, the company argues, “violates the constitutionally mandated separation of powers and Amazon’s due process rights.”
The Teamsters, which represents the Staten Island workers, sees the quest for an injunction as nothing but an effort to use the courts to delay the company’s obligation to meet the workers at the bargaining table.
“Granting the injunction would send the message to all these workers that it’s irrelevant that their bargaining representatives have been certified by the NLRB,” which creates a duty to start bargaining, Julie Gutman Dickinson, the Los Angeles labor attorney representing the Teamsters, told me.
“The NLRB and the courts have recognized for years that delay to a union certification and the bargaining process causes irreparable loss of support among employees,” Dickinson says. “The chilling effect goes far beyond the Amazon employees in the New York facility but extends to hundreds of thousands of employees across the country, many of whom are involved in organizing campaigns to seek union representation, who will see that the NLRB’s legal process is completely futile.”
Oral arguments in a second case, involving unionized drivers and dispatchers at a warehouse in Palmdale that the workers maintain is jointly operated by Amazon and a labor subcontractor, are scheduled for Dec. 18 in Los Angeles federal court.
The Teamsters argues that Amazon appears to be a recent convert to the idea that the NLRB is unconstitutional. For more than two years, or since the Staten island election, Amazon pursued the NLRB’s administrative process to overturn the vote.
“At no time did Amazon assert any constitutional claims or allege the NLRB or its processes were constitutionally deficient,” the union said in a legal filing. Not until September, when it was facing an order to explain why it hadn’t bargained with the union, did the company raise the constitutional question.
It’s worth noting that the constitutionality of the NLRB has already been reviewed by the Supreme Court. That happened in 1937, with a 5-4 vote (the minority votes came from the cadre of reactionary justices known then as the Four Horsemen).
The majority opinion by Chief Justice Charles Evans Hughes didn’t explicitly address the president’s authority to remove the board members at will, but he did find that the “procedural provisions” of the National Labor Relations Act, which created the NLRB, met constitutional muster.
Amazon may be right to believe that it will prevail before what it calls “an unbiased court.” If it’s referring to the Supreme Court, it’s in with a chance, given the overt hostility the current court majority has shown toward organized labor. But declaring the NLRB to be unconstitutional, some 90 years since it was created by Congress, would be a big step indeed.
Business
U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
Business
They graduated from Stanford. Due to AI, they can’t find a job
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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