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5 Things You Need to Know from the AFL-CIO's New Executive Paywatch Report

Tuesday, May 9th, 2017

Today, the AFL-CIO released the 2017 edition of its Executive Paywatch report. The Executive Paywatch website, the most comprehensive, searchable online database tracking CEO pay, showed that in 2016, the average production and nonsupervisory worker earned some $37,600 per year. When adjusted for inflation, the average wage has remained stagnant for 50 years.

AFL-CIO President Richard Trumka explained the importance of these details:

This year’s report provides further proof that the greed of corporate CEOs is driving America’s income inequality crisis. Big corporations continually find ways to rig the economy in their favor and line their CEOs’ pockets at the expense of the workers who make their businesses run. Too often, corporations see workers as costs to be cut, rather than assets to be invested in. It’s shameful that CEOs can make tens of millions of dollars and still destroy the livelihoods of the hardworking people who make their companies profitable.

Here are five key things you should know from this year’s Executive Paywatch report:

1. The average compensation for an S&P 500 CEO last year was $13.1 million. In contrast, production and nonsupervisory workers earned only $37,632, on average, in 2016. The average S&P 500 CEO makes 347 times what an average U.S. rank-and-file worker makes.

2. Last year, S&P 500 CEOs got a 5.9% raise while working people struggled to make ends meet.

3. Many U.S. corporations aren’t paying taxes on their offshore profits, shifting the burden to working people. The worst of the tax avoiders, 18 Fortune 500 companies, paid $0 in federal taxes between 2008 and 2015.

4. Fortune 500 corporations are avoiding up to $767 billion in U.S. federal income taxes by holding $2.6 trillion of “permanently reinvested” profits offshore. This offshoring isn’t an accident, it’s a choice, and it has an impact on the lives of Americans. For example, last year, Mondel?z International chose to offshore some 600 jobs from its Chicago Nabisco bakery. In the same year, its CEO, Irene Rosenfeld, made $16.7 million.

5. Seven years ago, Congress passed a law that included a rule requiring all publicly traded companies to disclose their CEO-to-worker pay ratio. But Wall Street and big corporations have lobbied hard to stop the U.S. Securities and Exchange Commission from enforcing this rule. Take action now to change that.

This post was originally posted on AFL-CIO on May 9, 2017. Reprinted with Permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

Unemployment: Why Won’t Congress Talk About It!?

Tuesday, January 15th, 2013

Change to WinAn interesting look at the unemployment rate. “What is currently a temporary long-term unemployment problem runs the risk of morphing into a permanent and costly increase in the unemployment rate” unless Congress takes action to create jobs. 

Why the Unemployment Rate Is So High – New York Times

Unemployment claims have increased slightly. “The Labor Department says applications rose 4,000 to a seasonally adjusted 371,000, the most in five weeks.”

Unemployment claims rise slightly in latest week – USA Today

“We need to avoid a lost generation of young people who will be playing economic catch-up their whole lives. We cannot stop pressing our leaders to help struggling poor and middle-class Americans.”

Crowdsourcing our economic recovery – CNN 

Even though the economy is improving, we need to do more to ensure the long term unemployed get back on their feet. Long term unemployment makes it harder and harder to provide for one’s family, and causes dramatic increases in mental illness. It’s time Washington gets busy putting people back to work. 

Long-Term Unemployed Winning Jobs Or Giving Up? – Huffington Post

This article was originally posted by ChangeToWin on January 11, 2013. Reprinted with Permission.

About the Author: Change to Win is an organization created by over 5.5 million workers – if corporations can join together to hire an army of lobbyists, working and middle class Americans must also band together and restore balance by making sure we have a strong voice and a seat at the table again.

(Colleen Gartner is an intern at Workplace Fairness.)

McDonald’s Urges Franchises to Open on Christmas Day … Without Overtime Pay

Wednesday, December 19th, 2012

Mark E. Andersen

In November McDonald’s saw a 2.5 percent increase in November sales. This is after the fast food giant saw a decrease in sales of 2.2 percent in October. So why was there increase in sales? Was the pork-like substitute McRib back? Was there a shortage of Ore-Ida french fries in your local grocer’s freezer causing a run on McDonald’s across the country?

Nope, none of the above; the corporate overlords at McDonald’s urged franchisees to be open on Thanksgiving day, a day that most franchise stores are closed. A Nov. 8 memo from McDonald’s USA Chief Operating Officer Jim Johannesen stated,

“Starting with Thanksgiving, ensure your restaurants are open throughout the holidays. Our largest holiday opportunity as a system is Christmas Day. Last year, [company-operated] restaurants that opened on Christmas averaged $5,500 in sales.”

On Dec. 12 Mr. Johannesen doubled down and sent out another memo to franchise owners stating that average sales for company-owned restaurants, which compose about 10 percent of its system, were “more than $6,000” this Thanksgiving. That adds up to be about $36 million in extra sales.

So with all those extra sales one must ask if employees are reaping any benefits from being open on the holidays. The answer is dependent on the franchise owner; however, in the case of company owned stores the answer is a big fat no. According to McDonald’s spokesperson Heather Oldani, “when our company-owned restaurants are open on the holidays, the staff voluntarily sign up to work. There is no regular overtime pay.”

It is bad enough that McDonald’s pays crap wages but then they turn around and refuse to pay overtime for employees who volunteer to give up their holidays so that McDonald’s can make several million dollars. I am also willing to bet that most staff does not readily volunteer to work on Christmas day. This just gives me one more reason to not eat at the Golden Arches.

This post was originally posted on December 18, 2012 at The Daily Kos. Reprinted with Permission.

About the Author: Mark E. Andersen is a 44 year old veteran, lifelong Progressive Democrat, Rabid Packer fan, Single Dad, Part-time Grad Student, and Full-time IS worker. Find me on facebook my page is “Kodiak54 (Mark Andersen)”

How “Right to Work Shirk” Laws Kill Jobs – and Hurt All of Us

Friday, December 14th, 2012

Michigan’s recent battle makes this a good time to explain the union movement’s important role in our economy’s overall health. We’re about to explain why today’s war on unions is bad for all of us, no matter what we do for a living, and we’ll do it in four steps.

But first a word about language: “Right to work” is a misnomer for laws which let employees enjoy the benefits of union membership – at least for a little while, until they’re stripped away – without joining or contributing.

So we’ll call them “right to shirk” laws instead. And we’ll call the people who back these laws Shirkers.

And while we’re at it, let’s stop calling the states that have adopted this legislation “right to work.” They don’t give people any new rights. They take rights away, by making it illegal for employees to organize and negotiate together. They even take away employers‘ rights – to sign a certain kind of contract.

So let’s give the other states a name instead: In a nod to the Jim Crow origin of these laws, let’s call the ones which don’t have these laws “free states.”

Free Ride

Right to Shirk laws allow freeloaders to profit from the efforts of others – without contributing to the effort, and in a way that harms the common good. The billionaires and corporations behind these laws wouldn’t deliberately do anything like that, would they? Why, that would be like letting people make billions from the works of government – things like roads, the Internet and publicly-educated customers – without paying their fair share of taxes.

Oh, wait.

Right to Shirk laws are job-killers. Here are four steps to understanding why:

1. Think nationally, not just locally.

Advocates say these laws create jobs. They don’t. Their “evidence” is based on studies which show modest job growth in Right to Shirk states when compared to free states.  But all that proves is that places that are politically hostile to organized labor also offer other types of corporate favoritism.

It also suggests that Right to Shirk states can steal jobs from free states — as long as the jobs last, anyway.

The Shirker movement was started in the late 1940s by a handful of Southern politicians who were in the palm of big textile mills. They were able to draw textile jobs away from free Northern cities like my hometown of Utica, NY – until those jobs left this country altogether.  That’s not “creating” jobs — that’s killing good jobs and replacing them with ones that don’t pay enough.

The concept of “solidarity” has been tarred with McCarthyite smears. But “solidarity” is just another way of saying “We’re all in this together.”  The Right to Shirk crowd wants to stop that kind of thinking so it can pit state against state and employee against employee, shredding our social fabric for personal gain.

It’s no accident that the Shirker movement was started by the reactionary white politicians of the Jim Crow South. Back then they were still pining for the days when they could offer some folks the “right to work” … for nothing.

2. We’re fighting over a shrinking pie instead of making the pie bigger.

Things are bad. We need millions of jobs – and the jobs we do have don’t pay enough.

The graphic which Business Insider likes to call “the scariest chart ever” shows how far we are from creating the number of jobs needed to make this country’s economy grow and thrive again.  Job growth like that we’ve seen recently is always welcome, but it’s not nearly enough to get us out of this ditch. How do we get moving again?

To answer that question we need to know what’s worked in the past.

3. The real “job creators” are people with jobs – good jobs.

How did this nation finally escape the after-effects of the Great Depression and begin its greatest decades of economic growth? Government spending  – on roads, bridges, schools, and other vitally needed services – played a key part.

Unions were a crucial part of this process, too. By fighting for higher wages and better benefits, unions ensure that working people have the means to purchase consumer items, housing, and other goods and services.  Companies have to hire more people to keep up with demand – and the good jobs keep coming.

That’s why the Republican Party platform of 1956 boasted that “unions have grown in strength and responsibility, and have increased their membership by 2 millions” during Dwight D. Eisenhower’s first term. Back then Republicans understood that a growing middle class was good for the entire economy.  That party platform also said that “America does not prosper unless all Americans prosper.” Their rule: No shirkers.

But then in those days our economy wasn’t dominated by Wall Street megabanks – institutions that don’t build or sell anything. And politicians weren’t completely in bankers’ pockets back then, because the public wouldn’t have tolerated it.

We shouldn’t tolerate it now.

4. When you kill unions, that reduces consumer income – which kills jobs.

The Shirker assault on unions has taken its toll. Only 25 states remain free to unionize, and union membership has fallen dramatically:

 

Their logic would suggest that the plunge in union membership we’ve seen since 1960 must have led to a rise in good jobs.  Did it? Let’s take a look at manufacturing:

That’s my freehand drawing (and therefore not exact) of the trend line in union membership, superimposed by the number of manufacturing jobs in the United States.  Manufacturing jobs kept on increasing for more than twenty years, even as union membership increased. These jobs experienced periods of decline and stagnation as union membership fell, even before the devastating impact of NAFTA.

Consumer demand is vital to growth. That demand is tied to consumers’ income, and to their belief that life in the future will be as good or better than it is today.  Those are the two things we need to reinforce, and unions are crucial to that effort.

We need to get our economy growing again. Until then most Americans, unionized or not, will continue to struggle with stagnating wages and an ongoing economic drag that can feel a lot like a recession.  As Paul Krugman likes to say (he said it in our radio interview), This isn’t rocket science. We know how to do this.

Destroying unions is just another way for the Shirkers to make sure that we never do.

This post was originally posted on Our Future on December 13, 2012. Reprinted with Permission.

About the Author: Richard Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician.  He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology.  He has a somewhat unique perspective on the current financial crisis, since he worked for AIG for a number of years (although not in its infamous Financial Products division). Richard has consulting experience in the US and over 20 countries. Past clients include USAID, the World Bank, the State Department, the Harvard School of International Public Health, the Government of Hungary, as well as corporations and investors. He has experience in financial and data analysis, systems design, operations, and management.

Women Haven’t Gained A Larger Share Of Corporate Board Seats In Seven Years

Wednesday, December 12th, 2012

In addition to grappling with a persistent pay gap, working women also have to deal with extreme difficulty ascending to powerful corporate positions, according to a report by the research organization Catalyst. As Bryce Covert explained at The Nation:

Women held just over 14 percent of executive officer positions at Fortune 500 companies this year and 16.6 percent of board seats at the same. Adding insult to injury, an even smaller percent of those female executive officers are counted among the highest earners—less than 8 percent of the top earner positions were held by women. Meanwhile, a full quarter of these companies simply had no women executive officers at all and one-tenth had no women directors on their boards. […]

Did this year represent a step forward? Not even close. Women’s share of these positions went up by a mere half of a percentage point or less last year. Even worse, 2012 was the seventh consecutive year in which we haven’t seen any growth in board seats and the third year of stagnation in the C-suite.

Overall, more than one-third of companies have no women on their board of directors. But economic evidence shows that keeping women out of the board room is a mistake. According to work by the Credit Suisse Research Institute, “companies with at least one woman on the board would have outperformed in terms of share price performance, those with no women on the board over the course of the past six years.”

This post was originally posted on Think Progress on December 11, 2012. Reprinted with Permission.

About the Author:  Pat Garofalo is the Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Corporation Pushes Six-Year Pay Freeze On Workers While Making Record Profits, Paying CEO $17 Million

Thursday, July 26th, 2012

Image: Pat GarofaloBack in June, ThinkProgress noted that the manufacturing giant Caterpillar was seeking major concessions during contract negotiations with striking workers, even as it was making billions in profits and giving its CEO a 60 percent pay boost. The New York Times’ Steven Greenhouse added more details today, noting that the company wants to implement a six-year pay freeze and a pension freeze, at a time when it is making record profits:

Despite earning a record $4.9 billion profit last year and projecting even better results for 2012, the company is insisting on a six-year wage freeze and a pension freeze for most of the 780 production workers at its factory here. Caterpillar says it needs to keep its labor costs down to ensure its future competitiveness. […]

Caterpillar, which has significantly raised its executives’ compensation because of its strong profits, defended its demands, saying many unionized workers were paid well above market rates.

“A company that earned a record $4.9 billion in 2011 and $1.586 billion in the first quarter of this year should be willing to help the workers who made those profits for them,” said Timothy O’Brien, president of Machinists Local Lodge 851. “Caterpillar believes in helping the very rich, but what they’re doing would help eliminate the middle class.” Several labor experts told the Times that Caterpillar is a pioneer in tough labor negotiations meant to drive down workers’ wages.

Last year, Caterpillar’s CEO made nearly $17 million in total compensation. At the moment in the U.S., the typical worker would have to work 244 years in order to earn what the average CEO makes in one year.

This blog originally appeared in Think Progress on July 23, 2012. Reprinted with permission.

About the Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

It’s Lucrative at the Top

Monday, July 11th, 2011
Image: Bob Rosner

According to a recent study commissioned by the New York Times, CEO pay is up 23%.

Okay so the suites are doing well. Damn well.

How are the rest of us faring? Non executive pay increased .5%. Yes, less than inflation. While CEOs race onward and upward, our pay shrinks.

I heard an interesting segment on the radio this weekend, the pay of the average worker hasn’t increased in 40 years.

Which leads me to a simple question. Is greed good?

Yes, that sounds familiar, it was the popular refrain from the movie Wall Street in the 1990s. Gordon Gekko, that Oliver Stone is a subtle guy isn’t he, made that a catch phrase for an entire generation.

We have a major problem in terms of unemployment in our country. At the same time we have CEO’s lavishing on themselves such extreme pay packages that they alone could cut the country’s unemployment rate in half just by making their pay packages more reasonable.

Marie Antoinette when told that her people were starving famously said “Let them eat cake.” It gave some small indication of how out of touch she’d become.

But if we were to try to come up with a similar phrase for today’s gilded class of CEOs I feel like the phrase would have to be let them eat dirt.

Okay, that was harsh, but I’m still flummoxed by the fact that no one has gone to jail after the financial shenanigans of the banks that caused our most recent recession.

But we’ve got to stop coddling these executives. Its not like Hollywood stars who had huge paychecks, CEOs only profit by taking the money that we’ve earned through our hard work.

Yes, I’m frustrated. You could say that I’m mad as hell.

I’m tired of seeing people suffering. We need to hold executives accountable. Now.

About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via bob@workplace911.com.

Do You Care How Much the Boss Makes?

Tuesday, June 28th, 2011

Image: Bob RosnerThere is a bill currently in Congress that would require companies to provide a simple comparison of what the CEO earns and how this compares to the pay of average employees.

Sounds simple, right.

No this is controversial stuff. Some Republicans in Congress call the comparison between the chief executive’s pay and everyone else in the company “useless.”

Useless?

So a group backed by 81 major companies, including McDonald’s, Lowe’s, General Dynamics, American Airlines, IBM and General Mills, is lobbying against this proposal.

According to a study by MIT and the Federal Reserve, executive pay at the nation’s largest firms has more than quadrupled in real terms since the 1970’s even as pay for 90% of America has stalled.

Remember, this isn’t a labor union study. It’s done by MIT, the Federal Reserve, the University of California and published in the Washington Post.

In 1979 the average executive pay at the nation’s top companies was 28 times the average worker’s income. By 2005, executive pay had jumped to 158 times that of the average worker.

I’ve just lost any shred of objectivity. This is insane.

But don’t just look at it from the point of view of an employee. Don’t investors need to know these numbers? To see how much executives are gilding their own pockets?

Call me old school, but I believe that sunlight is the best disinfectant. Let’s hope that Congress doesn’t allow this information to see the light of day.

About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via bob@workplace911.com.

2011 PayWatch: Average CEO Salary–$11.4 Million

Thursday, April 21st, 2011
Credit: Joe Kekeris

Credit: Joe Kekeris

While 25 million unemployed and underemployed U.S. workers are drowning, CEO pay skyrocketed by 23 percent, for an average salary of $11.4 million in 2010, according to the AFL-CIO Executive PayWatch. Released today, data compiled at PayWatch also show CEOs have done little to create badly-needed jobs, instead sitting on a record $1.93 trillion in cash on their balance sheets.

The 2011 Executive PayWatch features the compensation of 299 S&P 500 company CEOs and provides direct comparisons between those CEOs and the median pay of nurses, teachers, firefighters and others. For instance, while a secretary makes a median annual salary of $29,980, someone like Wells Fargo CEO John Stumpf rakes in $18,973,722 million—632 times the secretary’s salary. The pay gap between Wall Street and Main Street has widened egregiously—as recently as 1980, CEOs made 42 times that of blue-collar workers.

(Check out the 2011 Executive PayWatch to read case studies of six CEOs and find out how many firefighters it takes to make the salary of one CEO. You also can compare salaries of nurses, secretaries and others with CEOs and share the results with your friends on Facebook. Click here to share on Facebook.)

Maybe CEOs can’t focus on job creation because they have more pressing issues—like lobbying to repeal key provisions of a financial disclosure reform bill Congress passed last year. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires corporations to reveal the CEO-to-worker pay gap—and the Wall Street rulers don’t want to do that. (Click here to urge your member of Congress not to weaken Wall Street reform in any way.)180x200_paywatch2011

AFL-CIO President Richard Trumka says the AFL-CIO will work hard to defend this historic reform. The brazen attacks by Wall Street lobbyists to undermine reform “surprise and offend me,” Trumka says, “and I think they will surprise and offend most Americans.”

Apparently Wall Street doesn’t want people to know that while working Americans paid for the economic crisis with their jobs, their homes and their retirement savings, these Teflon CEOs escaped unscathed.

CEO pay has helped fuel the rapidly escalating income inequality in this country which has worsened over the past decade to levels not seen since the years before the Great Depression. The increase of income inequality prior to the 2008 financial crisis and the recent recession is striking: Between 1993 and 2008, the top 1 percent of Americans captured 52 percent of all income growth in the United States.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee (she was represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

This blog originally appeared in AFL-CIO on April 19, 2011. Reprinted with Permission.

Too Much Money Can Make the Boss Mean

Tuesday, January 25th, 2011

Image: James ParksHere’s another reason to do away with runaway CEO pay.  A study shows bloated CEO pay can make the boss mean.

The study examined the corporate behavior of 261 companies and found a close correlation between pay inequality and poor treatment of workers. In companies where CEOs made much more than their average workers, the companies were more likely to underfund pensions or cut corners on health and safety. Often, according to the study, the bosses engaged in a cost-benefit analysis, calculating that a fine would be a cost of doing business, compared with the profits they could make.

“You end up basically thinking of those at the bottom as numbers,’’ Sreedhari Desai, a Harvard research fellow who co-authored the study, told The Boston Globe columnist Joanna Weiss. “You feel somehow that they aren’t even worthy of the normal people that you’d meet. They’re disposable.’’

Writing about the study last summer for the Campaign for America’s Future, Sam Pizzigati sums it up this way:

The…data and the lab games, in the end, would both generate findings that point to the same conclusion. Wide pay gaps between executives and workers…enhance the sense of power executives feel and cause them to “objectify lower level employees.”

Or, to put the matter more plainly, “executives with higher income treat employees more meanly.”

Click here to read the study, “When Executives Rake in Millions: Meanness in Organizations.”

This article was originally published on AFL-CIO Now Blog.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections.

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