The 'Camo Economy' Hides Military Costs and Exacerbates Inequality


Pentagon contractors like Lockheed Martin exploit their political connections to maintain a system that generates huge corporate profits and executive pay at taxpayer expense.

STATE CAPITALISM THE AMERICAN WAY

SOCIALISM FOR THE MILITARY INDUSTRIAL COMPLEX

DEBT AND POVERTY FOR THOSE WHO FOOT THE BILL

by Heidi Peltier



In 2018, Lockheed Martin Corporation earned $8 billion in profits. About 85 percent of their business was government contracts. (Photo: Lockheed Martin)


Military contracting was sold to the American people as a way to reduce the cost of military operations, yet the result has been quite the opposite. Recent research of mine has shown that rather than reduce costs, military contracting—or what I call the “Camo Economy” because it camouflages human and financial costs—has resulted in higher costs to taxpayers. It has also distorted labor markets and contributed to rising inequality, as military contractors earn excessive profits that enable them to pay their employees and particularly their top executives much more than their counterparts in the public sector and most other private sector jobs.

Military contracting serves a public purpose and uses public funds, while contractors earn profits at the taxpayer’s expense and are often not subject to the competitive pressures of private markets.

In 2019, $370 billion—more than half of all Department of Defense (DOD) spending—went to contractors. While contracting is sometimes called "privatization," I think this is an inaccurate description, since military contracting serves a public purpose and uses public funds, while contractors earn profits at the taxpayer’s expense and are often not subject to the competitive pressures of private markets.

Many contractors operate more as monopolies than as competitive firms. Last year, 45 percent of DOD contracts were classified as "non-competitive." And even among competitive contracts, many of these are "cost-type" contracts, which means that the firm will be reimbursed all its reasonable costs, and therefore has no incentive to reduce costs as competitive, non-monopolistic firms would. Additionally, firms such as Lockheed Martin have created monopolies for themselves by selling weapons systems (like the F-35 fighter aircraft) and other equipment to the DOD that come with “lifetime service agreements” in which only Lockheed can service the equipment.




Military contractors, then, act more as commercial monopolies than as competitive private firms. And using their monopoly powers they are able to earn excessive profits. In 2018, Lockheed Martin Corporation earned $8 billion in profits. About 85 percent of their business was government contracts.

High profits allow military contractors to pay high wages, which contributes to rising inequality. While the average wage across all occupations in the U.S. last year was about $53,000, at Lockheed Martin the average wage was about $115,000, over twice as much. KBR, a contractor that provides various services in the Middle East, had an average wage of $104,000, nearly twice the national average. The CEO of Lockheed earned nearly $2 million in base pay, well above the national average of $193,000 for CEOs; once we include stock options and other compensation, however, Lockheed’s CEO earnings shoot up to over $24 million.
The Camo Economy has made war more politically palatable by camouflaging its various costs. Contractors now outnumber troops in the Central Command (CENTCOM) region that includes Iraq and Afghanistan, 53,000 to 35,000. Deaths of U.S. contractors since September 2001 are approximately 8,000, compared to 7,000 troops. Yet contractors receive neither the public recognition nor the honor of serving abroad, despite the increased risks they face. The Camo Economy is politically useful, as the White House can claim troop reductions while at the same time increasing U.S. presence abroad by relying more heavily on contractors.

The financial costs of military contracting are also opaque. While we know some top-line numbers, we know very few details about where our tax dollars go once they are paid out to contractors. We do know that contracting is more expensive, as contractors have limited incentives to reduce costs and they build profits into their contract agreements. As contractors then use sub-contractors, who also build in profits, there can be multiple layers of guaranteed profits built into a contract between the sub-contractors performing the work and DOD paying the prime contractor. Add in the waste, fraud, and abuse in addition to the excessive profits, and the costs to government quickly balloon.

It will not be easy to reform the Camo Economy. Firms such as Lockheed Martin, Northrop Grumman, and Raytheon each spent about $13 million on lobbying last year. Political connections operate alongside high profits and paychecks to keep the Camo Economy entrenched and growing. But reforms can be made. Reducing the size of the military budget is a vital first step. The National Priorities Project at the Institute for Policy Studies has detailed various ways to do this.

Next, the portion of military spending that is paid to contractors should be reduced and some services should be brought back in-house, including those on and near the battlefield. And third, the contracting process itself should be reformed, so that more contracts are legitimately competitive and create incentives for firms to reduce costs.

Heidi Peltier is Director of "20 Years of War," a Costs of War initiative based at Boston University’s Pardee Center for the Study of the Longer-Range Future. She is also a board member of the Institute for Policy Studies

SEE PERMANENT ARMS ECONOMY
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Read the email Twitter contractors were sent on Saturday telling them they'd lost their jobs

Jyoti Mann

Sun, November 13, 2022 

Some Twitter contractors received an email on Saturday night notifying them they'd been laid off.Getty Images

• Contractors working at Twitter lost access to company systems on Saturday night.

• Shortly after, they got an email notifying them that they were laid off, two sources told Insider. 
  

• Twitter contractors were told in the email it was due to a "reprioritization and savings exercise."

Some Twitter contractors realised they'd been laid off when they lost access to their work email and Slack accounts on Saturday night, two sources told Insider.

The news was first reported by Axios.

The laid-off contractors, who spoke on condition of anonymity, told Insider they did not receive the email until after they realized they'd been locked out of their accounts on Saturday night.

The Twitter workers, employed by Surya Systems, received an email notifying them that they lost their jobs about an hour later, the sources said, adding that those affected worked in content moderation and engineering.

The contractors were told that their assignment at Twitter had ended due to a "reprioritization and savings exercise" and that their last day at the company was Monday.  The email notified them that their badge and system access was "shut off immediately."

Twitter and Surya Systems did not reply to a request for comment from Insider made outside normal working hours.

"I don't understand how they didn't learn from their previous week's debacle of laying off full-time employees without telling them," one worker told Insider. "It might not seem like a big deal, but I don't think it's appropriate to treat employees like this (again)."

Elon Musk took control of Twitter late last month and had laid off about half its full-time employees by November 4. Like the contractors, staff members also realized they lost their job when they were locked out of their Slack and email accounts.

Read the full email that Twitter contractors received notifying them that they were laid off:

As you may be aware of, Twitter has conducted a reprioritization and saving exercise in an effort to better focus during this period of resource constraints.

Please allow this communication to serve as notice on behalf of your employer on record that your assignment at Twitter has ended as part of the reprioritization and savings exercise.

In order to maintain Twitter confidential information and for security reasons, your system and badge access will be shut off immediately.

Your last day at Twitter will be Monday, November 14th. You will not be expected to perform any services on November 14th. You will receive your final pay from November 7th through November 14th. Please ensure that any time cards and expenses that are outstanding are submitted into Magnit VMS immediately.

As a reminder, you have signed a Non-Disclosure Agreement; please remember that all intellectual property information associated with your assignment, business practices, or your specific project is strictly confidential during and after your Contract.

If you have any questions, please reach out to your employer Surya Systems, Inc.

Thank you for your service to Twitter,

Magnit Team

Twitter begins a new wave of firings

by letting go of contractors with

no notice, reports say

Hannah Getahun

Sun, November 13, 2022 

Elon Musk is reportedly planning to slash roughly half of Twitter's 7,500 employees this week. But the conflict between Twitter's old guard and the new owner's loyalists is just getting started.NurPhoto/Getty Images

• Twitter began firing contractors on Saturday, according to reports.

• Some contractors told Axios they found out after being locked out of work accounts.

• Contractors also shared fears that they would not be able to receive their final paychecks.

Twitter has began to lay off its contract workforce, with some contractors finding out through a loss of access to work accounts, according to reports.

Starting on Nov. 4, Twitter — under the new ownership of Tesla CEO Elon Musk — slashed its full-time employee workforce by nearly 50%.

Now, contractors appear to be the next target, with contractors telling Axios they were locked out of work accounts on Saturday. Similarly, many of Twitter's full-time employees also found out that they were being let go when they lost access to work platforms like Slack and email.

Some of these contractors work in content moderation, which had already been hit with layoffs, sources told Axios.

According to journalist Casey Newton, other departments, such as real estate and marketing, were also affected by contractor layoffs.

 

Some contractors told Axios they were worried about whether or not they would be able to receive their final paycheck, as many ended up on teams with no full-time employees following the layoffs.

Melissa Ingle, a content moderation contractor, told Axios that she was worried about how the layoffs would affect her and her family financially.

"This is no way to treat people," Ingle told Axios.

 

Following Musk's acquisition of Twitter, the company staff has been thrown into weeks of chaos.

Some laid-off Twitter staff were asked to come back after the company realized that they were essential to operations. Other Twitter staff filed a lawsuit, saying they were not given enough advance notice before their firings.

Now, employees are being asked by Musk to return to the office 40 hours a week or resign.

One current Twitter employee described the current environment as "ruthless" in an as-told-to essay by Insider's Jyoti Mann.

Twitter and representatives for Musk did not immediately respond to Insider's request for comment.

A Twitter manager says laid-off engineers he's rehired are 'weak, lazy, unmotivated'

Sam Tabahriti

Sun, November 13, 2022 

Twitter headquarters in San Francisco.Tayfun Coskun/Getty Images

• A Twitter manager described laid-off engineers he rehired as "weak, lazy, unmotivated."

• A screenshot of what appeared to be Slack messages has circulated on the Blind app.

• A source confirmed the manager worked for Twitter and said his comments sparked much internal debate.

A Twitter manager who rehired engineers after they lost their jobs in the recent mass layoffs appeared to criticize them on the company's internal messaging system.

A screenshot of the comments made by the senior director of engineering were posted by another Twitter worker on the anonymous forum Blind. They read: "This is going to be the challenge. The engineers I am bringing back are weak, lazy, unmotivated, and they may even be against an Elon Twitter."

"They were cut for a reason, so we need to think of these people as just needing to be around until the knowledge transition is completed," the manager continued.

A source at Twitter who spoke on condition on anonymity confirmed the manager's identity to Insider. The individual's LinkedIn profile showed that they had worked for Twitter since 2013.

The manager has been contacted for comment by Insider.

The comments have sparked much internal debate on Slack, according to Insider's source.

A screenshot of the messages also circulated online, which was also shared by data journalist Joshua Byrd.

The managing editor of the tech-and-democracy focused newsletter Platformer, Zoë Schiffer, tweeted that she had confirmed the manager did work at Twitter but later deleted her tweet saying: "I don't think naming someone at his level is necessary (not because the screenshot isn't real)."

Insider also surveyed Blind, a forum where employees can hold anonymous conversations, and found a post asking users whether they thought Elon Musk would take action following the manager's comments.

Of 157 responses, 60 thought Musk would promote the manager, 56 thought he would do nothing and 41 said he would fire the individual.

Musk fired half Twitter's workforce after taking control, but a few days later some employees were already been asked to come back.

RUMSFELD, CHENEY, BUSH OUTSOURCED WAR

Study: Pentagon reliance on contractors hurt US in 9/11 wars

By ELLEN KNICKMEYER

 In this Oct. 27, 2010, file photo a private security contractor watches a NATO supply truck drive past in the province of Ghazni, south-west of Kabul, Afghanistan. Military contractors got up to half of the $14 trillion spent by the Pentagon since 9/11, a study by Brown University’s Costs of War project and the Center for International Policy said Monday, Sept. 13, 2021. (AP Photo/Rahmatullah Naikzad, File)

Up to half of the $14 trillion spent by the Pentagon since 9/11 went to for-profit defense contractors, a study released Monday found. It’s the latest work to argue the U.S. reliance on private corporations for war-zone duties that used to be done by troops contributed to mission failure in Afghanistan.

In the post-9/11 wars, U.S. corporations contracted by the Defense Department not only handled war-zone logistics like running fuel convoys and staffing chow lines but performed mission-crucial work like training and equipping Afghan security forces — security forces that collapsed last month as the Taliban swept the country.

Within weeks, and before the U.S. military had even completed its withdrawal from Afghanistan, the Taliban easily routed an Afghan government and military that Americans had spent 20 years and billions of dollars to stand up. President Joe Biden placed blame squarely on the Afghans themselves. “We gave them every chance,” he said last month. “What we could not provide them was the will to fight.”

But William Hartung, the author of Monday’s study by Brown University’s Costs of War project and the Center for International Policy, and others say it’s essential that Americans examine what role the reliance on private contractors played in the post-9/11 wars. In Afghanistan, that included contractors allegedly paying protection money to warlords and the Taliban themselves, and the Defense Department insisting on equipping the Afghan air force with complex Blackhawk helicopters and other aircraft that few but U.S. contractors knew how to maintain.

“If it were only the money, that would be outrageous enough,” Hartung, the director of the arms and security program at the Center for International Policy, said of instances where the Pentagon’s reliance on contractors backfired. “But the fact it undermined the mission and put troops at risk is even more outrageous.”

At the start of this year, before Biden began the final American withdrawal from Afghanistan, there were far more contractors in Afghanistan and also in Iraq than U.S. troops.

The U.S. saw about 7,000 military members die in all post-9/11 conflicts, and nearly 8,000 contractors, another Costs of War study estimates.

The Professional Services Council, an organization representing businesses contracting with the government, cited a lower figure from the U.S. Department of Labor saying nearly 4,000 federal contractors have been killed since 2001.

A spokeswoman pointed to a statement last month from the organization’s president, David J. Berteau: “For almost two decades, government contractors have provided broad and essential support for U.S. and allied forces, for the Afghan military and other elements of the Afghan government, and for humanitarian and economic development assistance.”
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U.S. officials after the Sept. 11, 2001, attacks embraced private contractors as an essential part of the U.S. military response.

It started with then-Vice President Dick Cheney, the former CEO of Halliburton. Halliburton received more than $30 billion to help set up and run bases, feed troops and carry out other work in Iraq and Afghanistan by 2008, the study says. Cheney and defense contractors argued that relying on private contractors for work that service members did in previous wars would allow for a trimmer U.S. military, and be more efficient and cost effective.

By 2010, Pentagon spending had surged by more than one-third, as the U.S. fought dual wars in Iraq and Afghanistan. In a post-9/11 American, politicians vied to show support for the military in a country grown far more security conscious.

“Any member of Congress who doesn’t vote for the funds we need to defend this country will be looking for a new job after next November,” the study notes Harry Stonecipher, then the vice president of Boeing, telling The Wall Street Journal the month after the attacks.

And up to a third of the Pentagon contracts went to just five weapons suppliers. Last fiscal year, for example, the money Lockheed Martin alone got from Pentagon contracts was one and a half times the entire budgets of the State Department and the U.S. Agency for International Development, according to the study.

The Pentagon pumped out more contracts than it could oversee, lawmakers and government special investigators said.

For example, a Florida Republican Party official made millions on what lawmakers charged were excess profits when the U.S. granted a one-of-a-kind contract for fuel convoys from Jordan to Iraq, the study notes. The electrocution of at least 18 service members by bad wiring in bases in Iraq, some of it blamed on major contractor Kellogg, Brown and Root, was another of many instances where government investigations pointed to shoddy logistics and reconstruction work.

The stunning Taliban victory last month in Afghanistan is drawing attention now to even graver consequences: the extent to which the U.S. reliance on contractors may have heightened the difficulties of the Afghan security forces.

Jodi Vittori, a former Air Force lieutenant colonel and scholar of corruption and fragile states at the Carnegie Endowment for International Peace, who was not involved in the study, points to the U.S. insistence that the Afghan air force use U.S.-made helicopters. Afghans preferred Russian helicopters, which were easier to fly, could be maintained by Afghans, and were suited to rugged Afghanistan.

When U.S. contractors pulled out with U.S. troops this spring and summer, taking their knowledge of how to maintain U.S.-provided aircraft with them, top Afghan leaders bitterly complained to the U.S. that it had deprived them of one essential advantage over the Taliban.

Hartung, like others, also points to the corruption engendered by the billions of loosely monitored dollars that the U.S. poured into Afghanistan as one central reason that Afghanistan’s U.S.-backed government lost popular support, and Afghan fighters lost morale.

Hillary Clinton, while secretary of state under President Barack Obama, accused defense contractors at risk in war zones of resorting to payoffs to armed groups, making protection money one of the biggest sources of funding for the Taliban.

The United States also relied, in part, on defense contractors to carry out one of the tasks most central to its hopes of success in Afghanistan — helping to set up and train an Afghan military and other security forces that could stand up to extremist groups and to insurgents, including the Taliban.

Tellingly, Vittori said, it was Afghan commandos who had consistent training by U.S. special operations forces and others who did most of the fighting against the Taliban last month.

Relying less on private contractors, and more on the U.S. military as in past wars, might have given the U.S. better chances of victory in Afghanistan, Vittori noted. She said that would have meant U.S. presidents accepting the political risks of sending more U.S. troops to Afghanistan, and getting more body bags of U.S. troops back.

“Using contractors allowed America to fight a war that a lot of Americans forgot we were fighting,” Vittori said.

Contract coal miners face longer hours, higher risk than full-time peers

Mining companies increasingly rely on cheaper contractors who are reluctant to report safety problems or decline overtime, experts say

A miner holds a Peabody Coal pin badge at his home in Sparta Illinois. Credit: © Neeta Satam

Trebr Lenich always called his mother before driving home from his overnight shift at Hamilton County Coal’s Mine #1.

The call she got on the morning of Aug. 14, 2017, worried her.

“He said, ‘Mom, I am just so exhausted, so wore out,’” said Teresa Lenich, who worried about the long hours and consecutive days her son routinely worked.

That night, Trebr Lenich never made it home.

Coworkers driving behind Lenich saw him driving erratically and suspected he was falling asleep at the wheel, they told his mother. On the way to the West Frankfort home he shared with his parents, girlfriend and baby daughter, he drove off the road into a ditch and hit an embankment, then the engine of his car caught fire, according to a sheriff’s report.


Trebr Lenich Credit: Teresa Lenich / Courtesy

Like many young miners, Lenich was employed through a contracting company that provides temporary employees for mines, usually at lower wages than direct hires and with no promise the mining company will hire them permanently.

This staffing structure, and the disappearance of labor unions from Illinois mines, have made conditions less safe in mines and work more grueling for miners, according to experts and studies. With no job security, temporary staffers are reluctant to complain about potentially unsafe conditions — including long work hours — or report minor accidents, experts say. And temporary workers often have less experience in a given mine, so they may not understand the specific conditions and risks in that mine as well as a longtime employee.

A miner who retired in 2014 after 25 years in several Illinois mines said he saw firsthand the loss of union representation, the increasing use of contractors, and the increasing pressure to work long hours, with debilitating consequences for mine safety and miners’ well-being.

“Guys are working as contractors because, guess what, there are no other jobs in the industry,” said the miner, who asked his name not be used since he has family working in mines and fears retaliation. “If you have two little kids at home you’re trying to feed and they say, ‘Hey you’re staying over tonight or you’re working [overtime] tomorrow,’ basically you’re doing the job or you’re not going to be there anymore. It was never that way in the union.”

Nationwide coal mine work by contractors
The proportion of total coal mine work nationwide done by contractors increased steadily and significantly from 1983 to 2018, from 4% in 1983 to 26% in 2018.Nationwide coal mine work by contractors | Created with Datawrapper

The most recent death in an Illinois mine was a contractor, like Lenich, in Hamilton County Coal’s Mine #1. John Ditterline had been a miner for 28 years at various mines in Illinois. He had been working for six weeks as a contractor through S&L Industries when he died in the mine in the early morning hours of Jan. 5, 2019. At the time of his death, 11 of the 34 people working in the mine were contract workers, according to Mine Safety and Health Administration records. MSHA determined that Ditterline died after being pinned by a pneumatic door in the mine that malfunctioned while he and three other contract workers were investigating a power cable.

 
Data provided by MSHA in response to a public records request showed that between 1983 and 2018, the proportion of total coal mine work nationwide done by contractors increased steadily and significantly, from 4% in 1983 to 26% in 2018. The percent of total coal fatalities among contractors also generally increased during that time, with some years being exceptions, even as fatalities overall declined.


Longer hours, lower pay

Teresa Lenich said that her son feared losing his job if he declined to work the seven-day-a-week shifts he was assigned. An Illinois state law that mandates all employees get a full day of rest each week has an exception for coal miners, as well as for agricultural workers, workers canning perishable goods and several other jobs.

According to Lenich’s pay stub from Custom Staffing Services, the Indiana firm that employed him, he worked 65 and 67.5 hours for $18 an hour in each of the two weeks before he was killed. Teresa Lenich said her son told her that the miners were under pressure to work overtime, and he felt the job he did on the overnight shift required twice as many miners as were assigned to it.

Heather Dunlap, a representative of Custom Staffing, said that mining companies like Hamilton County Coal, not Custom Staffing, set miners’ hours. A representative of Hamilton County Coal referred questions about work with contractors and Lenich’s schedule to a lawyer for parent company Alliance Resource Partners, who did not return calls and emails.


A roadside memorial for Trebr Lenich. Credit: Teresa Lenich / Courtesyby Kari Lydersen
July 13, 2021

Teresa Lenich said she sometimes urged her son to refuse overtime or call in sick.

“He said, ‘Mom, you don’t understand, I can’t. I’ll lose my job, and if I lose my job I can’t support my daughter,’” she recalled in an interview. “I said, ‘Buddy, we’ll help support you until you find something else.’ He said, ‘Mom, it’s not your responsibility. I’m an adult now.’”

Researchers have found that a reliance on contract miners can correlate to longer hours worked and higher rates of injuries and fatalities. Lee S. Friedman, an associate professor at the School of Public Health at the University of Illinois at Chicago, found in a 2018 study that “working for a contractor was strongly associated with injuries occurring during extended work hours,” as Friedman described it. Contract employees’ “odds are significantly and substantially higher than non-contract labor of being injured after eight hours of work,” he said.

Friedman’s study concluded that injuries occurring after nine hours of work are more likely to be fatal and more likely to involve more than one miner. And miners new to the mine or working irregular shifts were more likely to suffer fatal injuries.

“Working for contractors is associated with working extended hours and irregular shifts, and the use of contract labour has been reported to be associated with inadequate training, lower compliance with occupational safety laws and higher injury rates,” Friedman’s study found. “An international shift towards using contract labour and extended workdays indicates that injuries during long working hours will likely continue to grow as a problem in the mining industry.”

Mining experts agree there is an important role for contractors in mines. They can provide specialized services and extra help in times of high production. And temporary or contract work often functions as a probationary process, with the mining company eventually hiring some employees directly. But critics say that mines rely too heavily on contract workers, in part to save money.

Custom Staffing’s website says it helps mining companies “reduce employment costs.” Ditterline’s employer, S&L Industries, based in Kentucky, offered a similar pitch. “With labor costs continuing to rise, our manpower services can provide a cost-effective solution,” the S&L website said at the time.

Bob Sandidge, then the primary owner of S&L and now the owner and CEO of a mining contracting company called RWS Resources, said that miners employed through his company typically earn between $1 and $6 per hour less than those directly hired by the mine.

He said that for S&L, miners may work long hours for several-week stretches, but “you can’t drive them into the ground.”

“If you have a special project and someone has to hammer 60 hours a week for a couple weeks, then everyone jumps in and does it,” he said, “but then we give them a break.”

The data

Friedman and his colleagues found that nationally the proportion of injuries to contract miners compared with direct hires increased fourfold from 3.3% to 12.5% between 1983 and 2015. Meanwhile, an analysis of Mine Safety and Health Administration data by the Centers for Disease Control and Prevention found that between 2006 and 2015, mining contractors had higher odds of being killed than direct hires.

A study by the University of Pennsylvania published in 2013 found that contract coal miners in surface and underground mines were more likely to be killed than direct hires, and were more likely to be killed after working more than eight hours on a shift, especially if they were on the overnight shift.


“We found that for contractors, a higher proportion of injuries that occurred more than eight hours into a shift and on the first [overnight] shift were fatal, compared to other times of day,” said study co-author Kristin Cummings, who is now with the National Institute for Occupational Safety and Health but worked on the study before joining the government. “We did not see the same pattern for [direct hires]. We do not know the reason why, but speculated that contractors may have less experience and more difficulty functioning safely after working overnight into the morning.”

Her team found that contractors’ odds of fatal versus nonfatal injuries were about three times higher than those of direct hires, but direct hires had higher overall injury rates.

“There are two ways to look at this,” Cummings said. “It could be because contractors were actually at greater risk of having a fatal injury, or it could be that contractors were just less likely to report a nonfatal injury.”

The University of Pennsylvania study also found that contractors had higher odds of being terminated or transferred due to injury.

“Possible explanations are the contractors had more severe injuries, so couldn’t continue in the same job; that there was a lower threshold to transfer injured contractors; or there were fewer options for modified jobs for contractors, so they couldn’t be transferred to another job and instead had their employment terminated,” Cummings said.

While Friedman’s and Cummings’ studies did not examine the reasons for increased risk during long shifts, they said they believe fatigue is a “critical element,” as Friedman put it. He said he sees longer shifts and exhaustion as an increasing concern for both contractors and direct hires.

“The mining industry has moved away from eight-hour shifts and is moving toward 10- and 12-hour shifts,” Friedman said. Federal data shows that workers in mining and logging — which are lumped together — work more weekly hours on average than other private sector occupational categories, with an average of 46.1 weekly hours in February 2019 for miners and loggers, compared to an average 34.4 weekly hours across the private sector.

No unions, little recourse

Union officials say contract miners may work longer hours and in more dangerous conditions because they can be easily terminated and, as a result, don’t want to speak up about concerns. Since contractors also typically earn lower wages, they also may be more eager to accept overtime.

“They’ve got contractors coming in and doing the same job regular employees do for half the money with no future,” said Ronnie Huff, an international representative of the United Mine Workers of America who is based in Illinois.

The labor union once represented tens of thousands of workers in Illinois mines, but today there is not a single unionized mine in the state. The last underground coal mine with union representation — Peabody’s Willow Lake — closed in 2012. Foresight Energy, the state’s largest coal mining company, has never had unions in its mines.

If direct hires were unionized, the union would likely fight against the extensive use of contractors. But without a union, Huff and other labor experts say, miners hired by contractors or the mining company have less power to demand better conditions or shorter hours.

Since her son’s death, Teresa Lenich has tried to highlight and change the law that exempts miners from a guaranteed day of rest each week. She contacted then-Illinois Attorney General Lisa Madigan and wrote to former President Donald Trump in hopes they’d help. Madigan’s office communicated with her periodically, but Madigan is no longer in office and Lenich has not been in touch with the current state attorney general. Lenich said she was surprised not to hear back from Trump, “since he says he’s for the people.”

She sometimes scrolls through photos on her son’s phone, of the mine, and his family. She reminisces about how Trebr seemed to grow up overnight after his daughter was born. Earning money to support his daughter was what kept him going during his long shifts, she said, but now he won’t see her grow up.

“I can’t do nothing for my son. But if I could get it where no other mother has to hurt like this, that would be something,” she said. “He was just so tired. Nobody should lose their life because the company won’t give them a day off.”

DANGER UNDERGROUND

Faulty equipment, poor training are main factors in Illinois coal mining deaths

A small price to pay: Illinois mines routinely appeal safety penalties

For generations of Illinois coal mining families, risk is part of everyday life

Contract coal miners face longer hours, higher risk than full-time peers

Black lung, a scourge of the past, still plagues Illinois mines



KARI LYDERSEN
Kari has written for Midwest Energy News since January 2011. She is an author and journalist who worked for the Washington Post's Midwest bureau from 1997 through 2009. Her work has also appeared in the New York Times, Chicago News Cooperative, Chicago Reader and other publications. Kari covers Illinois, Wisconsin and Indiana as well as environmental justice topics.More by Kari Lydersen

INDIA

As strike continues, SDMC asks new contractors to register themselves

The SDMC contractors’ union has been on strike since November 2021 over the non-payment of dues for the past three years. With municipal elections approaching, the pressure from municipal councillors to showcase development works is growing in the executive wing.

Contracts association says that threats of debarment/blacklisting are being issued to protesting contractors.(Representative image)

Updated on Jan 06, 2022

ByParas Singh

Facing a prolonged strike from contractors’ unions over non-payment of pending dues, the South Delhi Municipal Corporation (SDMC) on Wednesday decided to allow the registration OF more new contractors in its tendering process.

The SDMC contractors’ union has been on strike since November 2021 over the non-payment of dues for the past three years. With municipal elections approaching, the pressure from municipal councillors to showcase development works is growing in the executive wing.

On Wednesday, the SDMC spokesperson said that the corporation has allowed the registration of new contractors registered with the central public works department (CPWD), the state public works department and other urban local bodies (ULBs) in the tendering process. “With the decision, contractors registered with CPWD, state PWDs and ULBs are eligible to participate in the e-tendering process of the SDMC. As part of the current system, the SDMC allows only registered and enlisted contractors under various categories in South, North and East Delhi Municipal Corporation to participate in the tendering process,” a senior engineering department official explained.

“The step has been taken for better competition and higher quality standards in the tendering process and completion of work. The enlistment rules laid down by SDMC will be applicable to newly registered contractors. The parties will have to be registered on e-tendering website www.etendersgov.in,” the spokesperson said.

Leader of the House Inderjeet Sehrawat said that enlisting more contractors will improve the quality of work as more parties will be able to participate in the process. “We have held a meeting with the striking contractors’ unions on Tuesday. Payments worth ₹160 crore have been made this year, and while we are facing an acute financial crunch, we are able to release ₹20-25 crore every month. A solution to the strike will also be found soon,” he added.

Netra Kumar Sharma, the head of All SDMC Contractors’ Association said that the expansion of the list is being undertaken to create pressure on the protesting contractors. “We are also being threatened and notices of blacklisting and debarment are being sent to contractors. The corporation has pending dues worth ₹450 crore for the works which have been completed in the last three years. The association has submitted a memorandum to the corporation regarding the threats of debarment being issued by the executive engineers. This is a violation of our basic right to protest. If this does not stop, we will have to move court,” he added.

Earlier, HT had reported that municipal councillors have been raising the issues of pending development works over the last two months due to the strikes during the committee and House meetings even as the municipal elections are due in April this year.

Departure of U.S. Contractors Poses Myriad Problems for Afghan Military


Thomas Gibbons-Neff, Helene Cooper and Eric Schmitt

NEW YOPRK TIMES
Sun., June 20, 2021


An Afghan Air Force helicopter lands at Camp Shorabak, Afghanistan, May 11, 2021. (Jim Huylebroek/The New York Times)

KABUL, Afghanistan — An Afghan Air Force UH-60 Black Hawk helicopter, shelled while on the ground by the Taliban on Wednesday, sat helpless at a small outpost in the country’s southeast, its burning and damaged airframe displayed in a video on Twitter.

Even if it could get to the chopper to try to service it, the Afghan military would face another escalating problem: It is heavily reliant on American and other foreign contractors for repairs, maintenance, fueling, training and other jobs necessary to keep their forces operating, and those contractors are now departing along with the U.S. military, leaving a void that leaders on both sides say could be crippling to Afghan forces as they face the Taliban alone.

The problem is especially acute for the Afghan Air Force. Not only does the small but professional fleet provide air support to beleaguered troops, but it is also essential to supplying and evacuating hundreds of outposts and bases across the country — the quickly thinning line that separates government and Taliban-controlled territory.

With their ability to maintain their aircraft diminishing, Afghan pilots who fly over Taliban-held territory are finding that the condition of their aircraft upon their return is as pressing a concern as the success of their mission.

There are “a lot of problems” in the Afghan Air Force and it needs “American support,” one pilot said bluntly shortly before he flew to retrieve Afghan troops in a besieged district. His helicopter was hit with several bullets and narrowly missed a rocket-propelled grenade.

The Pentagon’s command to train, advise and assist the Afghan Air Force, known as TAAC-Air, concluded in January that no Afghan aircraft could be sustained as combat effective for more than a few months in the absence of contractor support.

“I am concerned about the ability of the Afghan military to hold on after we leave, the ability of the Afghan Air Force to fly, in particular, after we remove the support for those aircraft,” Gen. Kenneth McKenzie Jr., head of the Pentagon’s Central Command, which oversees Afghanistan, told a Senate committee in Washington in April.

The issue is at the center of tortuous discussions among Biden administration officials, who are trying to devise workarounds for the myriad problems associated with President Joe Biden’s decision to withdraw all American troops — and the contractors who support them — from Afghanistan. The withdrawal is expected to be complete by early to mid-July.

Officials at the Pentagon say that one possible solution would be to transfer contracts with private companies now paid for by the United States to the Afghan government. Under such an arrangement, American and other foreign contractors would stay in Afghanistan, but they would be paid by Afghan officials in overseas aid, mainly from the United States.

That way, the Pentagon and the Afghan government could get around the terms of the deal the United States struck with the Taliban, which implies that the Americans will not have private contractors in the country after the withdrawal.

“We should encourage the Afghan government to retain or engage contractor support for the Afghan Air Force and other key logistical and operational elements of the Afghan security forces — and we should pay for that support (including private security to protect those contractors),” former Defense Secretary Robert Gates said in an essay this past week in The New York Times.

Contractors in Afghanistan have long operated under a system that is susceptible to corruption and mismanagement. Transferring their payments through another entity — in this case the Afghan government — is bound to make the contracts even more open to charges of corruption, lawmakers and independent analysts warn.

Even if the contracts are transferred, several senior American commanders and policymakers say it is unclear how many foreign contractors will choose to keep working in Afghanistan with the American security umbrella gone or if those companies will stomach the risk.

Another idea is to relocate aircraft out of the country for any major overhauls. But that would most likely become hugely expensive, one Pentagon official said, and could end up costing American taxpayers more than they pay now to maintain the Afghan Air Force and its planes inside the country.

Maj. Robert Lodewick, a Pentagon spokesman, said in an email Saturday that contracts with the Afghan Air Force and its special mission wing “have been modified, and the contractors continue their support.” Lodewick said he could not identify specific contractors or provide details on how the maintenance and logistics support would be provided.

These issues, fundamental to the survival of the Afghan national security forces once the U.S. military withdraws, are still being hashed out. That they are still being addressed even as the last U.S. troops are preparing to leave speaks to the years of disconnect between the Pentagon and a succession of presidents, all of whom, at one point or another, sought a more reduced American presence in the country than officials in the military and the Defense Department.

How to deal with the contractors is just one of a number of pressing problems created by the rapid withdrawal of American troops. The CIA is struggling to ensure that it can gather intelligence about potential threats from Afghanistan once the U.S. military presence ends.

The Pentagon is still weighing how it will strike terrorist groups such as al-Qaida from afar once it no longer has troops or warplanes in Afghanistan. And the Biden administration has yet to strike deals to position troops in any nearby nations for counterterrorism operations.

The Afghan government has always relied heavily on foreign contractors and trainers. As of this spring, there were over 18,000 Defense Department contractors in Afghanistan, including 6,000 Americans, 5,000 Afghans and 7,000 from other countries, 40% of whom are responsible for logistics, maintenance or training tasks, according to John Sopko, special inspector general for Afghanistan reconstruction.

The Afghan security forces rely on these contractors to maintain their equipment, manage supply chains, and train their military and police to operate the advanced equipment that the United States has bought for them.

For instance, during a virtual forum this year, Sopko spoke of the challenges the Afghans were facing with maintenance work. As of December, he said, the Afghan National Army was completing just under 20% of its own maintenance work orders, well below the goal of 80% that had been set and the 51% that they completed in 2018. The Afghan National Police carried out only 12% of its own maintenance work against a target of 35%.

Since 2010, the Defense Department has appropriated over $8.5 billion to develop a capable and sustainable Afghan Air Force and its special mission wing, but American policymakers and commanders have always known that both would need continued, expensive logistics support from contractors for aircraft maintenance and maintainer training, the inspector general’s office concluded in a report in February.

Contractors currently provide 100% of the maintenance for the Afghan Air Force’s UH-60 helicopters and C-130 cargo aircraft, and a significant portion of Afghan’s light combat support aircraft, Sopko said.

Problems with contractor support were mounting well before Biden’s decision in April to withdraw all American military personnel and contractors.

An assessment last fall by the inspectors general of the Pentagon, the State Department and the U.S. Agency for International Development, found that worker shortages, coronavirus-related restrictions and a lack of oversight made it difficult for American military officials to hold contractors accountable to performance standards.

Coupled with reduced training time and a lack of American officials to assess Afghans’ proficiency, the assessment found that basic skills for Afghan aircrews and aircraft maintenance workers declined.

By the end of last year, the American training command reported that only 136 of the 167 aircraft in the Afghan fleet were ready for combat missions or would be after minor maintenance, a drop of 24 aircraft from the previous quarter.

Even then, Afghan aircrews overworked what planes they had, the training command found, regularly exceeding the recommended number of flying hours between scheduled maintenance checks.

Another logistical headache emerged several years ago, after U.S. lawmakers lobbied to phase out Afghanistan’s fleet of Russian-made helicopters, called MI-17s, replacing them with U.S.-made Black Hawks.

Aside from not being able to carry as much cargo at higher elevations as the MI-17s, the more complicated Black Hawks effectively reset maintenance training for Afghan mechanics. One U.S. official said it would take until the mid-2030s for the Afghans to be able to maintain the Black Hawk fleet on their own.

“This plan we have for over the horizon,” the official added, “is not going to work as effectively as we need it to.”

This article originally appeared in The New York Times.

© 2021 The New York Times Company

AMAZON GIG ECONOMY PART 3

3,200 Amazon Drivers Are Going To Lose Their Jobs
Amazon continues to terminate its larger delivery contractors; at least 3,242 delivery drivers will be laid off this spring.

Caroline O'DonovanBuzzFeed News Reporter

Ken Bensinger BuzzFeed News Reporter
Posted on February 27, 2020

Chris Helgren / Reuters
An Amazon worker loads a trolley from a Prime delivery van in Los Angeles, California

More than 3,200 drivers who deliver Amazon packages to homes and businesses across the country each day will be laid off by the end of April as the e-commerce giant continues a significant shift from large delivery contractors to smaller ones that are cheaper and easier to control.

In the past several months, the online retailer has informed at least eight delivery firms that it would be severing contracts with them. In turn, those contractors told state workforce regulators that they would be forced to lay off at least 3,242 employees, records show.

That comes in addition to the layoffs of more than 2,000 drivers from three other terminated delivery firms reported by BuzzFeed News and ProPublica in October; all three of those firms had been involved in accidents resulting in fatalities that were previously reported in investigations by the news organizations.

“Sometimes the companies we contract with to deliver packages do not meet our bar for safety, performance or working conditions,” Amazon said in a statement. “When that happens we have a responsibility to terminate those relationships and work to find new partners. We care a lot about the communities where we operate and work hard to ensure there is zero or very little net job loss in these communities.”

Although Amazon offers laid off drivers the chance to apply for new jobs with its other delivery contractors, the company’s director of transportation compliance, Carey Richardson, recently acknowledged under oath that it’s rare for more than 60% of those individuals to end up at one of those firms. That’s a particular issue at this time of year, when the holiday rush is over and many delivery contractors say they are not hiring.

“There are no jobs for these drivers to transition to,” said the owner of one Amazon delivery firm that has not lost its contract and who requested anonymity for fear of reprisal. “They have nowhere to go.”

To achieve its promise of next-day delivery, Amazon relies on a homegrown network of independent companies that hire their own drivers, rather than employ its own workforce directly. Those contractors, recognizable by their ubiquitous cargo vans that roam the streets of almost every community in the country, delivered more than half of the record number of packages Amazon shipped to customers this past holiday season.

The use of contractors also creates a layer of legal separation that helps Amazon deny liability when things go amiss. Investigations by BuzzFeed News and ProPublica last year found that Amazon contractors have been involved in dozens of serious crashes, including at least ten that were fatal. Many of the online retailer’s delivery firms have been investigated by the Labor Department following allegations that workers were underpaid and denied proper lunch or bathroom breaks.

Using contractors also makes it easy for the online retailer to unilaterally drop firms — many of whom have no other source of revenue and are forced to go out of business — at its whim.

Most recently, Transportation Brokerage Specialists, based in Costa Mesa, California, lost its contract with Amazon and said it would be shutting down its operations in California, Arizona, Washington, and Oregon. As a result, the firm will be forced to initiate a “mass layoff of approximately 907 employees,” the company wrote in a letter to regulators last week.

Amazon has also severed contracts with other contractors, including Bear Down Logistics, Express Parcel Service, Delivery Force, Urban Mobility Now, RailCrew Xpress, Dash Delivery, and 1-800-Courier in recent months, government records show, leading to layoffs in at least 18 states, including California, Texas, Pennsylvania, Georgia, Florida, Ohio, Virginia, North Carolina, Washington, WIsconsin, Massachusetts, Connecticut, Kentucky, Alabama, Michigan, Arizona, Minnesota, and Oregon.

One RailCrew Xpress driver in Alabama was recently told she’d be out of work on April 12. She said she wants to get a job with another Amazon delivery contractor but is far from confident. “I have to apply and hope for the best,” said the woman, who requested anonymity for fear that speaking out would prevent her from getting hired.

After being told he would be laid off because his employer, Delivery Force, was getting terminated by Amazon, one driver got a job offer from a different delivery contractor. But that job paid less, $15 instead of $17 an hour, he said. “It just can’t work,” said the man, who requested anonymity because he is still working for Delivery Force. “It’s so sad,” he added. “We had all these plans for our team … We had no clue until we got the letter.”

Amazon launched its delivery network as an alternative to UPS, FedEx and the US Postal Service in 2014. Originally, it brought in established logistics firms, some of which it contracted to operate in multiple locations and run hundreds or even thousands of routes at a time. But since mid-2018, Amazon has been aggressively shifting its delivery model towards smaller contractors that work from a single location and manage no more than a few dozen routes.

Because of their size, those smaller companies have less negotiating leverage with Amazon, which in some cases pays them as much as 5% less than it paid its so-called “legacy” or “1.0” carriers for the same work, court records show. While Amazon pays legacy carriers a monthly stipend to cover the cost of dispatchers, for example, there is no such payment for the newer firms.

In addition, while legacy contractors are free to choose their own vendors and purchase or lease their own vehicles, Amazon requires its newer carriers, known internally as “2.0,” to lease blue vans branded with the Amazon smile logo, and to obtain insurance and manage payroll through providers that it selects, giving the $900 billion company far more control over their daily operations.

Amazon does not publish a list of all its delivery contractors and in October refused a written request from three US Senators to do so, although it did say it had more than 800 firms under contract at the time. As of late last month, there were roughly 30 legacy contractors still delivering Amazon packages, according to court testimony.

Meanwhile, Amazon continues signing up hundreds of new, small, 2.0 contractors around the country. In its statement, the online retailer said that “in the past six months, more than 300 new Delivery Service Partners have launched their businesses with Amazon, creating job opportunities for nearly 15,000 drivers.”

Drivers at some of the 2.0 firms complain of some of the same workplace issues as at legacy contractors, including being forced to drive poorly maintained vans, not receiving overtime pay, and being denied proper lunch or bathroom breaks. At least one 2.0 firm, Amazing Courier Express Services, based outside San Diego, has been subject to an employment suit, court records show. That suit is still pending.

Last summer, Amazon managers in Seattle reviewed the company’s remaining legacy contractors, ultimately creating a list of 15 firms marked for termination. Amazon manager, Micah McCabe, whose job is to “own the exit process” of delivery contractors, said in court testimony that those 15 firms were singled out solely because they had been named in employment lawsuits by drivers.

But some delivery firm owners claim Amazon’s termination decisions are capricious and inconsistent. A review of court records reveals other legacy firms that have delivered for Amazon for years have been named in multiple employment lawsuits yet do not appear to have been terminated. Courier Distribution Systems, for example, has been sued by its drivers at least 13 times, most recently in November. Yet the Georgia-based firm continues to post help-wanted ads for Amazon drivers, and in some cases offers a wage below the $15 minimum hourly rate Amazon has said it requires its delivery contractors to pay.

A different legacy contractor, Bear Down Logistics, has been the subject of just one employment suit, court records show. But last summer, 75 of its drivers in Wisconsin — frustrated by low pay, inadequate health insurance, and other issues — filed for a labor election that would allow them to be represented by a trade union. Earlier this month, Bloomberg News first reported that Bear Down Logistics had lost its contract with Amazon and as many as 400 drivers would be laid off in April.

When Amazon terminates a delivery firm, it typically offers a payment in exchange for signing a non-disclosure agreement. None of the eight delivery firms that have been terminated responded to requests for comment from BuzzFeed News.

One delivery firm on the termination list, Scoobeez, refused Amazon’s $1 million offer and is currently fighting the online retailer’s efforts to shut it down in court. Scoobeez, based outside of Los Angeles, employs almost 900 drivers in three states and gets essentially all of its income from Amazon; in December 2018 it operated more than 13,000 routes and had $5.1 million in revenue, according to court records.

The delivery firm, which has been working for Amazon since 2015, refused to accept the terms of the 2.0 contract because it “would have taken a 5 percent haircut” on what it earned, according to an email written by Eric Swanson, director of Amazon’s last mile program.

Scoobeez, which has been sued multiple times by workers alleging underpayment and also was accused by its creditors of possible criminal mismanagement, filed for bankruptcy protection last April. Amazon continued giving Scoobeez business after the filing, but in October informed the company that its contract would be terminated.

Amazon, has been unable to cut off Scoobeez because of bankruptcy court protections but contends it shouldn’t be forced to do business with a company it no longer wants delivering its packages, citing concerns that could hurt its reputation.

“If a driver was then to contact media, then Amazon, again, could be called out as the bad guy,” Amazon’s compliance manager Richardson testified. Added McCabe: “I would point to a BuzzFeed article that came out several months ago."

Scoobeez was featured prominently in that article. At least three other firms mentioned in that report have also since been terminated by Amazon since publication.