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Archive for the ‘wealth’ Category

As New Jobs Return, Employers Slash Wages

Wednesday, December 26th, 2012
New data has shown that while a majority of jobs eliminated during the downturn were in what we describe as the middle range of wages, the great majority of jobs added as the economy improves were low paying jobs, reported Katherine Rampell in the business section of the New York Times on Friday, August 31, 2012. This was documented in a study done by the National Employment Law Project.
 The study by Annette Bernhardt examined 366 occupations followed by the Labor Department. Bernhardt separated them into three equal groups by wages, with each representing a third of American employment in 2008.
     The middle third consisted of jobs like construction, manufacturing, and information. These jobs paid median hourly wages of $13.84 to $21.13. Over 60% of these jobs were lost during the recession. When the middle third jobs returned, they represented only 22% of total employment growth.
      In the category of higher wage occupations, those that had a median wage of $21.14 to $54.55 reflected only 19% of job losses. However, when growth in the economy began, only 20% of new jobs were the result of the upturn. This was only a 1% increase which doesn’t even cover new entrants into the labor force.
     Low wage jobs with median hourly wages of $7.69 to $13.83 accounted for 21% of job losses during the downturn. The startling fact is that low wage jobs now constitute 58% of all job growth. The jobs with the fastest growth were retail sales at a median wage of $10.97 per hour. At this salary, workers would be eligible for food stamps.
      Each category has grown by more than 300,000 workers since June 2009. Many of these new paying jobs were taken by recent high school and college graduates who were previously unemployed. Others were taken by older workers who formerly had jobs that paid much more, who were desperate.
     Mid-wage and middle class jobs have been disappearing at a rapid rate. Some of this is due to automation, but the bulk of the job loss is the result of employers taking millions of jobs overseas to low wage paying countries.
     At the same time, corporations and their Republican robots are passing so called “Right to Work” legislation which further erodes the wage structure. The labor movement, the trade unions, and their progressive allies are the only institutions that can bring back middle class livable wages.
This post was originally posted on Union Review on December 19, 2012. Reprinted with Permission.
 
About the Author: Seymour Slavin is an Independent Nonprofit Organization Management Professional at Union Review.

America Holding Walmart’s Feet to the Fire

Wednesday, December 5th, 2012

Finally, someone is holding Walmart directly accountable for the abuse of workers in its contracted warehouses. “Recent discovery has established that Walmart bears ultimate responsibility for the violations of state and federal law committed against plaintiff warehouse workers,” said a court document filed in Los Angeles.  

Walmart Targeted In Warehouse Worker Lawsuit – Huffington Post  

“Wal-Mart employs a network of contractors and subcontractors who have habitually broken the law to keep their labor costs low and profit margins high. We believe Wal-Mart knows exactly what is happening and is ultimately responsible for stealing millions of dollars from the low-wage warehouse workers who move Wal-Mart merchandise.”

Warehouse Workers Sue Wal-Mart for Back pay and Damages – ABC News/Univision 

Corporate Welfare: instead of taking a small partition of their record profits, or slightly cutting CEO pay to help out their workers, Walmart wants YOU, the taxpayer, to pay for its workers’ healthcare. Just one more reason Walmart workers, and the population at large, are standing up to Walmart. 

Walmart Wants Taxpayers to Pick Up Health Care Costs – Truth Dig

Walmart wants you to think its workers love the store and love their jobs. If that’s the case, why are there unprecedented protests against the mega retailer spanning the country? Why is the store facing a lawsuit from contracted warehouse workers? Since Walmart has given us no real evidence that its workers love the store, maybe we are just supposed to take Walmart’s word for it? 

Walmart Wants You To Know That Their Workers ‘Love Their Jobs’ – Huffington Post

This post was originally posted on Change to Win on Monday, December 3, 2012. Reprinted with Permission.

About the Author: J Lefkowitz: Change to Win is a Strategic Organizing Center which focuses on using its “strength in numbers to reclaim the American Dream.” It’s target is middle class and working class Americans to hold corporations  and other large entities in our modern society accountable. You can learn more about Change to Win here.

Corporate Profits Hit Record High While Worker Wages Hit Record Low

Tuesday, December 4th, 2012

A constant conservative charge against President Obama is that he is inherently anti-business. However, businesses keep defying the storyline by making larger and larger profits, rebounding nicely out of the Great Recession.

In the third quarter of this year, “corporate earnings were $1.75 trillion, up 18.6% from a year ago.” Corporations are currently making more as a percentage of the economy than they ever have since such records were kept. But at the same time, wages as a percentage of the economy are at an all-time low, as this chart shows. (The red line is corporate profits; the blue line is private sector wages.):

 

Corporations made a record $824 billion in profits last year as well, while the stock market has had one of its best performances since 1900 while Obama has been in office.

Meanwhile, workers are getting the short end of the stick. As CNN Money explained, “a separate government reading shows that total wages have now fallen to a record low of 43.5% of GDP. Until 1975, wages almost always accounted for at least half of GDP, and had been as high as 49% as recently as early 2001.”

This post was originally posted on Think Progress on December 3, 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.

The Filthy Rich Shout "Greed Is Good" and Party With The Politicians

Friday, August 19th, 2011

jonathan-tasiniWhen I wrote the “The Audacity of Greed” in 2008, I had a chapter called “Vodka and Penises” which detailed a rather unique birthday party thrown in Sardinia, Italy, in 2000 by Tyko CEO Dennis Kozlowski in honor of his wife–it featured vodka spraying from the penis of a replica of Michelangelo’s David. Kozlowski, who eventually went to jail for stealing lots of company money including the funds to pay for this little soiree, flew seventy-five guests to the Hotel Cala di Volpe where the privileged invitees played golf and tennis, ate fine food, listened to a performance by the singer Jimmy Buffett (who was paid a fee of $250,000 to appear) and enjoyed a birthday cake in the shape of a woman’s breasts festooned with sparklers on top.

It was a symbol of the greed and avarice coursing through American business.

And it ain’t over–as Leon Black is happy to demonstrate.

Let’s set the backdrop first: millions of Americans are without work, millions more can’t find decent paying work, we still are trying to dig out of a financial crisis caused largely by greed and avarice on Wall Street, we have the greatest divide between rich and poor in 100 years, and we are enduring a longer-term attack against the people by a bankrupt “free market” system that values a few CEOs over the rest of us.

No matter. The party must continue:

Last Saturday night, the financier Leon D. Black celebrated his 60th with a blowout at his oceanfront estate in Southampton, on Long Island. After a buffet dinner featuring a seared foie gras station, some 200 guests took in a show by Elton John. The pop music legend, who closed with “Crocodile Rock,” was paid at least $1 million for the hour-and-a-half performance.

And:

Mr. Black had his backyard transformed into a faux nightclub setting, constructing a wooden deck over his swimming pool and building a tent for Mr. John’s concert. After a buffet of crab cakes and steak, partygoers sat on couches with big puffy pillows.

Who was there?

The stars of music and fashion collided with a who’s who of Wall Street. Revelers included Michael R. Milken, the junk-bond pioneer and Mr. Black’s boss at Drexel Burnham Lambert in the 1980s; Julian H. Robertson Jr. , the hedge fund investor; Lloyd C. Blankfein, the chief executive of Goldman Sachs; and Mr. Schwarzman, head of Blackstone Group.Rounding out the guest list were politicians including Mayor Michael R. Bloomberg and Senator Charles E. Schumer of New York, who rubbed elbows with the media celebrities Martha Stewart and Howard Stern.[emphasis added]

And:

On Saturday night, to be sure, there was little talk of carried interest at the Blacks’ home on Meadow Lane, one of the Hamptons most desirable addresses for its panoramic views of the Atlantic Ocean and Shinnecock Bay. He counts among his neighbors Calvin Klein and David H. Koch, the billionaire industrialist.[emphasis added]

So, here is what is important to glean from this obscene affair, which underscores how we have been robbed–and how we will continue to be robbed in the future.

In my most recent book, “It’s Not Raining, We’re Being Peed On,” I wrote about “carried interest”. Private equity firms get a special tax break—it’s called “carried interest”, Rather than being taxed at the top rate of 35 percent, the private equity fund managers like Black only pay 15 percent through a loophole called “carried interest.” To understand carried interest, you have to first understand how money managers get paid in the yacht-sailing, mansion-buying world of private equity.

First, they receive a fee, which is a percentage of the funds they invest. This fee is usually in the range of two percent, and is taxed like your run-of-the-mill wage income.

Second, and far more lucratively, money managers get a fee based on the performance of their fund—a fee in the range of 20 percent. It’s the second fee that is the so-called “carried interest”—and it’s how the money managers of private equity really rake in the big bucks that pay for their Picassos, yachts and mansions.

In the normal world of taxable income (and let me say that nothing in the tax code is simple when it comes to schemes that allow people like Black to shelter their money), carried interest is taxed as investment income—at the capital gains level of 15 percent (much lower than the top wage income rate), even though most of these managers invest very little, if any, of their own money.

So, a private equity big shot honcho hauling down millions of dollars in “incentive” is taxed at a 15 percent rate, while the receptionist who works in his office, or the police officer who guards the equity baron’s property, probably earn $50,000 or so if they’re lucky—and those average working people pay a 25 percent tax rate on that income (not to mention payroll taxes), a far larger share of their income than the fellow who banks “carried interest.”

Which is how Black can afford to throw obscene birthday parties.

How “carried interest” continue to remain in place can be summed up, in large part, with two words: Chuck Schumer. Schumer has been one of Wall Street’s greatest defenders. And, while there have been calls to eliminate the “carried interest” bonanza, Schumer has blocked that effort time and again, and has also, most recently, flip-flopped on the absurd proposal to give corporate American a tax holiday on the profits companies have stashed over seas.

I understand the movtivation: Wall Street is a huge honeypot for campaign contributions. That is Schumer’s obsession.

But, keeping “carried interest” costs billions of dollars in money lost to our government’s treasury–money for schools, health care for seniors, research, and jobs.

One final point on the private equity world. Even if the “carried interest” is eliminated, we need to keep another point in mind: private equity firms make their huge profits by buying up companies and stripping them of hundreds of thousands of workers in the name of “efficiency”. The longer-term economic crisis is, at heart, a hammering down of wages–which has led to deep despair among the people who can’t make ends meet. Private equity firms have been at the leading edge of feeding that disastrous economic system.

Which is why we should care–and take notice–of the people who party and rub shoulders at these kinds of obscene events.

They just do not care.

Ultimately, for all the rhetoric, this is about the power and wealth of the business and political elite.

It is not about us. Until we torch this system.

*This blog originally appeared in Working Life on August 19, 2011.

About the Author: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.
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