Austin workers win paid sick leave

More than 200,000 workers in Austin, Texas won a new benefit on February 15 when the city council passed a new ordinance that requires local employers to provide paid sick leave to workers.

The new paid sick leave ordinance was an initiative of Work Strong Austin, a community/labor organization that includes the Workers Defense Fund, UNITE HERE Local 23, Fight for $15, Young Active Labor Leaders, and the Center for Public Policy Priorities.

“I think this was a big victory for public health and workers’ rights in the city, and just as important a victory for progressive politics of Texas and the South,” said City Council Member Greg Casar to the Austin American-Statesman. “This would not have passed without a strong majority on the council and the election of progressive pro-worker (council members).”

Casar sponsored the ordinance and worked closely with Work Strong Austin to get it passed.

The new ordinance requires private employers to allow workers to earn one hour of paid sick leave for every 30 hours worked. An employee of a business or non-profit organization can accrue up to at least eight hours of paid sick leave a year.

Employees of private employers with fewer than 15 employees may accrue only six days of paid sick leave.

Businesses that already provide more generous paid sick leave will continue to do so.

Prior to the city council’s vote, hundreds of supporters of the ordinance rallied in front of City Hall to urge passage of the ordinance.

Casar, who was at one time the policy director for the Workers Defense Project, told the crowd that other cities in the South had tried and failed to pass paid sick leave ordinances, but “we’re not going to fail because of the amazing organizing and support that you all have brought to the table.”

“We have an unprecedented coalition of organizations coming together, and we are going to make sure that we don’t fail but that we pass (this ordinance tonight),” Casar continued.

Casar also urged people at the rally to register in support of the ordinance; nearly 400 did and many testified in favor of it.

Among those who testified in favor of the ordinance were UNITE HERE Local 23 members Darnell Franklin and Iris Leija.

Casar read off a long list of organizations that supported the ordinance. Among those were the Communication Workers of America (CWA) District 6 and CWA Local 6132, whose members work for AT&T in the Austin area.

Claude Cummings, District 6 vice president, and Jason Peavler, president of Local 6132, co-authored a letter to Austin Mayor Steve Adler and the ten city council members.

In the letter Cummings and Peavler called on the mayor and city council members to vote for the ordinance without delay and to make sure that it applied to all workers.

The CWA letter also explained why paid sick leave is important and why immediate action was needed.

“The fact is this: paid sick time is a basic human right, “the letter stated. “For every day that goes by without passage of the paid sick time ordinance, over 200,000 men and women in Austin are forced to choose between a pay cut or taking care of themselves or a loved one because they do not have access to paid sick days.”

Before the vote took place, opponents of the ordinance including the Austin Chamber of Commerce, tried to get a vote on the measure postponed.

They argued that not enough was known about the impact that paid sick leave for all would have on businesses. They also said that there wasn’t any Austin specific information about the impact that the new benefit would have.

But days before the final vote was taken, the Institute for Women’s Policy Research (IWPR) released the results of a cost benefit analysis of the Austin ordinance.

IWPR said that its researchers specifically studied the impact that giving paid health care to Austin workers would have on Austin businesses and concluded that the ordinance would save businesses $4.5 million a year.

The analysis estimated that providing Austin workers with paid sick leave would cost businesses $34.3 million a year but that it would generate business savings of $38.8 million a year.

After the IWPR cost-benefit was released and before the city council voted for the ordinance, Ann Beeson, executive director of the Center for Public Policy Priorities, said that “this new cost-benefit analysis shows that paid sick days are a win-win-win for employers, for workers, and for our entire community.”


West Virginia teachers will strike to save public education

On a cold, rainy Saturday, 10,000 teachers and school support employees rallied in Charleston, West Virginia to demand that state leaders take action to fix the state’s public education crisis.

At the end of the rally, the leaders of the two state public education unions announced that on Thursday, February 22, teachers and school support staff in all 55 West Virginia counties will begin a two-day, statewide strike.

“The entire state of West Virginia will be shut down. We are standing united–all 55 (counties),” said Dale Lee, president of West Virginia Education Association to the 10,000 rally attendees.

“Will you stand with us?” he asked

Six days earlier, local leaders of the American Federation of Teachers-West Virginia and the West Virginia Education Association from all 55 West Virginia counties voted to authorize a statewide strike unless state leaders took action to fix the state’s public education crisis

State budget cuts to education funding have resulted in crowded classrooms, fewer learning resources, and cuts to vital services at schools.

The state also has failed to provide adequate funding for affordable health care and competitive salaries for public school employees.

Low pay and the lack of affordable health care have caused a teacher shortage as many qualified educators have left the state for teaching opportunities elsewhere.

There are currently 727 vacant teaching positions in the state because of the low pay and a string of punishing benefit cuts.

After the strike vote, Christine Campbell, president of American Federation of Teachers-West Virginia, and Lee, called the vote “historic” because it was the first time that the two organizations have joined in voting for a statewide strike.

Lee told reporters that more than 100 delegates from all of the state’s 55 counties “overwhelmingly voted to authorize a statewide action.”

Prior to the Sunday meeting, “quiet a few of the counties including some of our larger ones voted in excess of 90 percent to authorize our action,” added Lee.

“We’re willing to lead any action necessary to fight for public education,” said Campbell, speaking about the historic strike vote.

She went on to say that while state leaders have been short-changing public education, they continue “to give tax breaks to corporations.”

Both Campbell and Lee said that state leaders need to fund salary increases to make public school pay in West Virginia competitive with other states.

Too many of our qualified teachers are leaving the state for better jobs, said Campbell while she explained the strike vote to reporters on February 12.

State leaders also need to fund an affordable health care plane for public school employees.

During the last three years the West Virginia Public Employees Insurance Agency (PEIA) has cut health care funding by $150 million because lawmakers have under funded public employees’ health care plan.

PEIA’s own executive director called the cuts “draconian.”

Because of the cuts, premiums, deductibles, co-payments, and co-insurance costs have soared.

While employee health care cost have increased, their pay has remained stagnant.

PEIA announced in December that for the next school year, which begins in July, it would be cutting benefits again because of a lack of state funding.

The latest round of cuts was too much for public school employees, and they expressed their anger at public hearings, by staging demonstrations, and in some cases, walking off the job to travel to Charleston to demand that the legislature take action to provide affordable health care.

The mobilizations had some effect. West Virginia’s Governor Jim Justice announced that he will propose a freeze on public school health care benefits at their current level, which if enacted would mean that there will be no benefit cuts during the 2018-2019 school year.

But angry teachers and school support employees have told Gov. Justice and the state’s lawmakers that “a freeze is not a fix” and that they want a long-term, lasting  solution to make their health care affordable again.

Friday, the day before the two-day strike was announced, lawmakers got a hint of what was to come.

Teachers and school support employees from Brooke, Cabell, Clay, Lincoln, Mason, Wayne, and Wetzel counties walked off their jobs and drove to Charleston to demand action by lawmakers.

Some of those who walked out went to the Senate gallery to observe the debate on fixing the public school crisis.

At a little after 12 noon, as the Senate started to adjourn, the crowd in the gallery began chanting, “We will strike,” “Do your job,” “We will vote you out.”

Federal contractor charged with labor law violations and wage theft

The National Labor Relations Board has filed a complaint alleging that one of the federal government’s largest contractors has violated federal labor laws.

The complaint issued by Region 5 of the NLRB states that General Dynamics Information Technology (GDIT) took illegal action to prevent workers at its Alexandria, Virginia call center from joining a union.

In a related matter, the Communication Workers of America (CWA) has charged GDIT with massive and systemic wage theft and has called on the Wage and Hours Division of the Department of Labor to take action against the company.

GDIT, which reported $4.4 billion in revenue in 2016, has extensive contracts with the US military, intelligence services, and civilian agencies.

Among its many government contracts is one with the Pension Benefit Guarantee Board  (PBGB).

Under this contract, 80 GDIT employees at its Alexandria call center answer inquiries from people who receive or are about to receive pension benefits from PBGB.

These workers in 2016 began working with CWA to form a union.

The NLRB’s complaint says that GDIT management responded to the workers’ desire to form a union with coercion and threats.

“I’m happy that GDIT is finally being taken to task for breaking the law,” said Sabrina Batta-Hopson, a union supporter at the Alexandria call center. “I hope this labor board complaint will prevent the company from spreading more misinformation to other workers.”

Among other things, the NLRB alleges that the call center’s program manager “by e-mail promulgated and maintained” a rule against employees talking to other employees about joining a union.

The same program manager during an employee meeting misinformed workers that a union wouldn’t help them get a pay raise because it would take an act of Congress to get one.

At another employee meeting, the program manager threatened employees with the loss of benefits if they joined a union and falsely claimed that if they joined a union, the company would lose its contract with PBGB.

The NLRB’s complaint is due to be heard on May 22 by an administrative judge.

“These federally contracted workers are entitled to the protections of our labor laws,” said Alex van Schaick, a CWA attorney. “GDIT not only abuses workers’ rights, but is also the focus of serious complaints about wage theft and other abuses, and may owe its employees over $100 million in back wages.”

The wage theft to which Van Schaick referred involves workers at 11 GDIT call centers all across the US.

These call centers operate under contract with the Center for Medicare and Medicaid Services (CMS).

These workers answer people’s questions about Medicare, help people enroll in Affordable Care Act health care plans, and help Medicare recipients get medical equipment to manage their health problems.

CWA wants the Wage and Hour Division to investigate its charge that GDIT is violating the law by misclassfying workers in order to pay a wage lower than the prevailing wage required by the Services Contract Act, by which contractors must abide in order get contracts with the federal government.

The union estimates that GDIT owes $107 million in back pay.

The crux of the union complaint is that GDIT’s call center workers are trained extensively and have broad knowledge about services that callers are seeking, but their job classification reflects a much lower level of skill and training.

“I’ve had two rounds of extensive training to get to my current job. It’s a lot of responsibility and a lot of work,” said Adrian Powe, a worker at GDIT’s Hattiesburg, Mississippi call center. “But I’m being paid at a much lower rate. I’m being cheated, and the federal government must hold GDIT accountable. GDIT needs to follow the contract it agreed to.”

Powe makes $9.64 an hour, but said he should make $11 to $12 an hour.

CWA estimates that if workers at the Hattiesburg call center were classified correctly and paid the wage they deserve, their annual wages would increase by between $3682 and $6572.

In addition to the workers in Hattiesburg, CWA has also filed wage theft complaints on behalf of GDIT workers in Kansas, Louisiana, and Virginia.

Kathleen Flick, who works at a GDIT call center in Bogualusa, Louisiana said that it’s wrong for GDIT to be stealing money from the working poor.

“I can’t run my air conditioning in the summer because I can’t afford the electric bills,” Flick said. “When I needed a major car repair, I had to take the money out of my 401(k) retirement plan. I’d like to visit my kids, both of whom are active military, but I can’t afford to do it.”

CWA President Chris Shelton said that the union’s wage theft charges will be test for the Trump administration.

“This will be a real test of whether laws that safeguard working people are actually enforced under the Trump administration,” Shelton said. “We’ve heard a lot of promises from this president about defending American workers. It’s time for action, not rhetoric.”


Fast food workers celebrate the past, fight for the future

Fast food workers on February 12 across the US walked off their jobs in the latest mass action to win a nationwide minimum wage of $15 an hour.

The strike for a $15 minimum wage coincides with the 50th anniversary of the Memphis sanitation workers strike.

Fifty years ago on February 12, African American sanitation workers in Memphis went on strike to protest their racist bosses and because they wanted to form a union.

They told city officials that they needed a union to protect themselves from racial discrimination.

They cited the death of two of their colleagues, Echol Cole and Robert Walker, who were crushed to death by malfunctioning equipment.

The tragedy did not seem to concern the white city officials who took no action to improve safety conditions in the city’s sanitation department.

The striking workers responded by demanding that they be treated like human beings, not disposable parts. Their rallying cry became, “I AM A MAN.”

Fifty years later fast food workers are taking up the same demand–treat us like human beings, pay us a decent wage, and let us form unions to make sure that employers treat employees with respect and dignity.

“Fast-food cooks and cashiers like me are fighting for higher pay and union rights, the same things striking sanitation workers fought for 50 years ago,” said Ashley Cathey, a 29-year-old Memphis fast-food worker explaining why she would be striking on February 12. “We’re not striking and marching just to commemorate what they did; we’re carrying their fight forward. And we won’t stop until everyone in this country can be paid $15 an hour and has the right to join a union.”

Fight for $15 strikes took place in two dozen cities across the US, but the center of the day’s action was Memphis, where striking workers and their supporters rallied at Clayborn Temple and then marched to city hall, the same route taken by striking sanitation workers 50 years ago.

Before they rallied at the Clayborn Temple, 100 Memphis fast food workers and their supporters rallied at a downtown McDonald’s.

One of the workers who walked off the job was Robin Curtis, a Burger King employee and a mother of two who works multiple jobs to support her family.

When she saw the crowd gather outside of the McDonald’s near where she worked, she decided to join the strike.

“$8 (an hour) is not enough to live on. It’s time for a change,” said Curtis to the Memphis Commercial Appeal. “To make a change, if I have to quit, I will.”

At the city hall rally, the Rev. Liz Theoharis, the co-chair of the Poor People’s Campaign: A National Call for Moral Revival, told the crowd that the fight for $15 is a fight for the soul of America.

It’s wrong, said Theoharis that “there are 64 million workers in this country that make less than $15 an hour, and yet 400 families (in America) make $97,000 an hour. This is not just. This is not right.”

Theoharis said that the Poor People’s Campaign beginning on Mothers Day would be initiating a season of organizing, educating, and mobilizing to revitalize the fight for economic justice and civil rights in the US.

For forty days after Mothers Day, Theoharis said, we’ll be taking non-violent direct action including acts of civil disobedience to win a $15 minimum wage, to win the right for workers to form unions, to win the right to live free of racism, to win the right to live free of sexism, and to win the right of all working people to live with dignity and respect.

Also scheduled to speak at the rally was the Rev. William Barber II, also a co-chair of the Poor People’s Campaign, but he was unable to attend because of illness.

In a statement issued prior to the Memphis march and rally, Barber emphasized the link between the sanitation workers’ strike and the fast food workers’ strike.

“The fight for strong unions was at the heart of the original Poor People’s Campaign,” said Barber referring to the 1960s campaign for civil rights and worker rights led by Dr. Martin Luther King, Jr. “It must be at the forefront of our effort as well.”

Barber did deliver an audio message to the Memphis rally.

In his message, he said that the best way to pay homage to striking Memphis garbage workers today is “to say to America . . .  , it’s time to take out the garbage.”

“Racism is garbage,” continued Barber. “Sexism is garbage; mistreating women is garbage; not paying people a living wage is garbage; not being willing to give people health care is garbage; tearing down the environment is garbage; not caring for our Latino and immigrant brothers and sisters is garbage; trying to undermine union rights is garbage; and putting more money into wars than building people’s lives is garbage.

“It’s time for a movement that will take out the garbage and replace it with a new community, a new understanding, a new justice, a new fairness, a new equality, and a new wage.”


Worker advocate: Trump’s proposed tip rule legalizes wage theft

The US Department of Labor (DOL) on February 5 began taking comments on a proposed rule change that would allow restaurant employers to keep tips earned by their wait staff and other tipped employees.

“This new rule would constitute legalized theft of restaurant workers’ hard earned tips,” said Saru Jayaraman, president of Restaurant Opportunities Centers (ROC) United.

Bloomberg Law recently reported that an analysis conducted by DOL staff showed that implementation of the proposed rule will cost restaurant employees billions of dollars in lost wages.

Bloomberg Law also reported that DOL Secretary Alexander Acosta deleted the staff’s estimate of employee wage loss from the department’s published analysis of the proposed rule.

In addition to lost wages, the proposed rule change will leave restaurant workers more vulnerable to sexual harassment, Jayaraman said.

The proposed rule change, whose first draft was published December 5, rescinds a 2011 DOL rule that forbids employers from taking control of tipped workers’ tips.

Currently, restaurants are allowed to pay their tipped staff as little as $2.13 an hour, and tips account for most of the wages earned by tipped workers.

The Department of Labor assumes that by transferring the control of tips to employers, employers will then distribute tips to all of a restaurant’s low-wage workers–wait staff, cooks, workers who bus tables, dishwashers, etc.

But there is nothing in the proposed rule change that requires employers to do so, and there is nothing in the rule that would prevent employers from keeping some of the tips for themselves or distributing them to higher paid managerial staff.

Based on what has happened in the past and to some extent continues through today, it’s reasonable to assume that some employers or supervisory staff will keep some of the tips for themselves.

A 2009 study of the restaurant industry’s compliance with labor laws found that 12 percent of tipped employees surveyed reported that their employer or supervisor had stolen tips from them.

The Economic Policy Institute estimates “that under this rule, employers would pocket $5.8 billion in tips earned by tipped workers each year,” or “16.1 percent of the estimated $36.4 billion in tips earned by tipped workers annually.”

The original analysis by DOL makes roughly the same estimate, but according to Bloomberg Law, Acosta and Office of Management and Budget Director Mick Mulvaney didn’t like the staff’s numbers.

After reviewing the first draft of the analysis, Secretary Acosta asked staff to rework their analysis.

The revised financial impact was lower than the original, but it was still too high for Acosta and Mulvaney.

Analyses for rule changes by the federal government usually include an estimate of the financial impact of the change, but not this time.

Instead, the analysis approved by Acosta and Mulvaney states that there isn’t enough information to quantify the financial impact of the proposed rule.

Christine Owens, executive director of the National Employment Law Project (NELP), said that she and others “were deeply disturbed” by what she called the Department of Labor’s “cover up” of vital information about the financial impact of the proposed rule.

“The only appropriate remedy is to withdraw the rule, and NELP calls on the Department of Labor to do so immediately,” Owens said.

Jayaraman was equally outraged at the decision not to publish important information about the proposed rule.

“The administration’s unethical lack of disclosure of this information–which the public deserves to know–constitutes nothing more than outright deception of the American people,” she said.

Jayaraman said that the National Restaurant Association (NRA) colluded with the Trump administration to transfer control of tips from employees to employers.

“The NRA’s greed has gone way too far,” Jayaraman said. “On top of lobbying for 80 years to keep the wage for tipped workers at a subminium wage of just $2.13 an hour, they have also tried to get away with keeping their workers’ tips.”

In addition to lost wages, Jayaraman said that the proposed rule will make a bad situation worse.

“Tipped restaurant workers in the United States are mostly women who struggle to make ends meet and suffer from the highest rates of sexual harassment of any industry in the United States because they must tolerate inappropriate customer behavior to feed their families in tips,” Jayaraman said. “If passed  (the proposed rule) would exacerbate sexual harassment as it would give employers extraordinary power over their workers’ tips.”

ROC is urging people to support tipped workers by submitting comments opposing the rule to the Department of Labor.

One union, AFSCME, also is encouraging its members to show solidarity with tipped workers by submitting comments to the Department of Labor.

“A proposal by the Trump administration’s Labor Department would . . . give (restaurant) bosses permission to take some of those tips for themselves,” said AFSCME in message to its members.

The union then provides a link to the Department of Labor’s comment page and urges members to speak out against the department’s attempt to legalize wage theft.


USDA says no to industry speed up petition

After receiving 100,000 comments about an industry proposal to allow the unregulated speed up of production lines at chicken processing plants, the US Department of Agriculture (USDA) announced that it was rejecting the industry’s proposal.

The National Chicken Council (NCC), the chicken processing industry’s trade association, in September petitioned USDA to lift its cap of 140 birds per minute on production line speeds at some chicken processing plants.

Consumer and labor groups mobilized people to oppose the speed up arguing that higher line speeds will degrade both worker safety and food safety.

Worker advocates applauded USDA’s decision.

“This is a huge victory for thousands of poultry workers who often risk their health and safety by processing chicken at high speeds,”said Magaly Licolli, executive director of the Northwest Arkansas Workers’ Justice Center, an Interfaith Worker Justice (IWJ) affiliate.

“This decision is a victory for hard-working poultry workers who hold one of the most dangerous and difficult jobs in America and the consumers who depend upon them to provide chicken that is safe to eat,” said Marc Perrone, president of United Food and Commercial Workers (UFCW).

The union mobilized its members to flood USDA with comments on NCC’s speed up request.

Debbie Berkowitz, senior fellow for worker safety and health with the National Employment Law Project (NELP), said that high line speeds have created “harsh and dangerous conditions” for poultry workers.

“The highly profitable poultry industry, which already pays poverty wages and keeps workers in disturbingly unsafe and unhealthy workplaces, should stop lobbying the government to allow it to further endanger workers,” Berkowitz said. “Instead, it should lift labor standards for the 250,000 workers who help feed this nation.”

The NCC’s petition asked USDA to create a new waiver process that would allow processing facilities that slaughter and butcher new chickens to operate without any cap on their production line speed.

To qualify for the waiver, a processing plant would have to join USDA’s New Poultry Inspection System (NPIS), which requires new chicken processing plants to implement prescribed food safety improvements but also privatizes much of the food safety inspection work.

Processing plants seeking waivers  would also have to participate in USDA’s Salmonella Initiative Program and develop a system for monitoring and responding to the loss of process control.

In a letter denying NCC’s petition, Carmen Rottenberg, USDA’s acting undersecretary for food safety, said that there was already a waiver system in place similar to the one requested by NCC and the agency didn’t want to create another one.

She also said that the agency was rejecting the NCC request to lift the cap on production line speeds.

Rottenberg, however, did note that there are currently 20 companies that have been granted waivers to operate their production lines at up to 175 birds per minute, the maximum speed at which USDA says proper food safety inspections can be conducted.

She said that USDA may consider more waiver requests seeking to raise production line speed.

The USDA’s apparent willingness to consider higher line speeds raised concerns among food safety and worker advocacy groups.

In order for processing plants to be allowed to increase production lines speeds, they would have to join the USDA’s New Poultry Inspection System, which relies heavily on privatized inspections.

Food and Water Watch notes that the combination of higher line speeds and privatized inspections has harmed food safety.

There is, according to Food and Water Watch, already evidence showing that plants that have been allowed to privatize food safety inspections under the New Poultry Inspection System have a “greater propensity” for failing USDA’s salmonella performance standard.

UFCW observes that “as line speeds increase, so does the risk of injury—including serious and bloody cuts and amputations,” which is why Perrone said, “We remain concerned that poultry companies can request line speed waivers for individual plants.”

NELP warned USDA not to conduct its waiver process in secret.

“NELP calls on the USDA to follow the law and announce any new system for individual waivers in the Federal Register for public notice and comment,” Berkowitz said. “Further, the USDA must be open and transparent and publish on its website every request they receive for a waiver of line speeds and make them available for public notice and comment.”

Interfaith Worker Justice said that USDA’s decision was cause for celebration, but there is still much work to do to do.

“We will continue our organizing to challenge the already-breakneck speed and inhumane conditions that working people endure in so many poultry processing plants from coast to coast,” said IWJ.


Second UK outsourcing company in financial trouble

Capita, a prominent private contractor that provides a wide array of public services for the United Kingdom and its local governments, on January 30 issued a profit warning and announced that it was initiating a dramatic rescue plan.

The announcement caused further anxiety about the viability of the government’s privatization strategy.

Earlier this year, Carillion, another prominent government contractor, was forced to liquidate because it could no longer pay its massive debts.

Carillion’s liquidation left its 20,000 workers without jobs and the government scrambling to figure out a way to provide services that the defunct company no longer did.

If Capita’s rescue plan fails, its workers and those who rely on the services provided by the company will be facing the same fate.

These services are extensive. They include operating call centers that help people apply for and receive unemployment benefits, managing the teachers’ pension fund, helping people with disabilities find work, providing services to the UK’s National Health Service, and operating NHS’ online payment system to name just a few.

As soon as Capita announced its rescue plan, Unite, Britain’s largest trade union, called on the Ministry of Defense to reconsider its plan to privatize firefighters and defense workers.

Capita is one of two companies bidding on the department’s privatization proposal.

“Following Carillion’s collapse and the profit warning issued by Capita today the government must order a moratorium on the privatization of the MoD firefighters contract,” said Gail Cartmail, Unite’s assistant general secretary.

Cartmail added that these workers, who protect Ministry of Defense building, equipment, and munitions, “could swiftly find themselves in the same position as Carillion workers.”

“Rather than outsourcing public services, the government should be bringing all its outsourced contracts back in house” continued Cartmail

Like Carillion, Capita suffers from a lack of cash flow that has resulted in an unacceptable accumulation of debt.

The Telegraph reports that Capita has a net debt of  £1.1 billion and owes £380 million in pension contributions.

Jonathan Lewis, Capita’s new CEO, said that the company got itself in trouble by spreading itself too thin.

Capita went on a spending spree buying up other companies in order to increase its market share, but its income could not pay for all of its new purchases.

Lewis said that his rescue plan for Capita would include selling some of the businesses that the company acquired during its spending spree, not paying dividends to investors, and issuing new stock that he hopes will raise £700 million to recapitalize the company.

The bad news from Capita, which saw its share price drop by 40 percent, comes on the heels of the Carillion disaster.

Like Capita, Carillion was a big player in the UK’s privatization game.

For more than thirty years, Britain’s government has aggressively moved to sell off public assets and privatize many government services.

When privatization was first implemented in a big way back in the 1980s, economists and business leaders alike hailed the move as an innovative way to make government services more efficient and cost effective.

But those high hopes have begun to unravel in the UK.

One area of privatization that has come under fire, is the privatization of British Rail. The UK privatized its national rail system in 1993, but a little more than 20 years later, the public has soured on its privatization and critics are calling it a disaster.

More recently, Carillion’s demise has further dimmed the shine on privatization’s luster.

Carillion piled up huge debts while the government tried to keep it afloat by awarding it new contracts.

In addition to its private creditors, Carillion owes nearly £1 billion in unpaid pension contributions.

“The developing picture of the level of incompetence and mismanagement at Carillion is simply staggering,” Cartmail said.

She added that “while Carillion’s employees face losing their livelihoods and the taxpayer has to pick up a huge bill for the company’s collapse, it remains unclear if anyone will ever be held responsible.”

GMB, another union whose members were hurt by Carillion’s demise, criticized the company and the government’s handling of the crisis.

“The more we see, the more it appears that the workers are paying the price for the failures of corporate bosses and government ministers,” said Rehana Azam, GMB national secretary.

“Thousands of Carillion workers still don’t know what will happen to them as their pay, terms and conditions hang in the balance–and worse, the prospect of their pensions being raided.

“The system that has allowed this to happen is broken and it must change.”