Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Campaign for Americas Future’

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.

The Lesson of Pittsburgh for G-20: Manufacturing Matters

Wednesday, September 23rd, 2009

The revival of Pittsburgh, site of the G-20 summit this week, can provide valuable lessons for the world’s leaders. Among them: Manufacturing matters and poor trade policies hurt everyone.

Pittsburgh, G-20 and the New Economy: Lessons to Learn, Choices to Make,” a report released today by the Campaign for America’s Future (CAF), makes clear that the renaissance of Pittsburgh after the collapse of the steel industry was cut short because of the lack of a national industrial policy and the nation’s trade policies.

During a telephone news conference, CAF Co-Director Robert Borosage said some manufacturing jobs in Pittsburgh were replaced by high-end jobs in education or medicine.

But many were replaced by jobs in hotels and food services—jobs that never paid as well and proved even more vulnerable in the recent downturn. Some manufacturing jobs were never replaced at all. That helps explain why the city’s population is declining, especially among youth, who seek opportunity elsewhere.

That idea was echoed by more than 400 people who marched through the streets of Pittsburgh on Sept. 20 calling for an economic recovery that includes jobs for the unemployed.

The march set out from a local church where some 25 people slept overnight in tents to symbolize the poverty that lies behind the glitz of the renewed downtown Pittsburgh.

During the news conference today, Sen. Sherrod Brown (D-Ohio) said trade policies were at the core of the steel industry decline. He praised President Obama’s recent decision to provide relief to the domestic consumer tire industry in response to surging tire exports from China.

Obama’s action was significant, Brown said, because it is the first time a president has really enforced trade rules. He said he hopes it leads to even more complaints as U.S. industries see that their government cares about fair trade.

Brown added that the country “cannot tolerate” trade policies that spawn low wages and allow illegal trade subsidies in China and other countries to decimate our economy.

Economist Jeff Madrick of the New School’s Schwartz Center for Economic Policy Analysis, said the nation’s manufacturing sector has been the victim of deliberate neglect by policymakers. It is clear, he said, that union manufacturing jobs pay better wages and have more benefits than service jobs.

The G-20 summit is a perfect time for U.S. officials to take a hard look at what has happened to workers over the past decades. For example, the median wage for males is less today than it was in the 1970s when you take inflation into account. And workers’ wages have not kept up with productivity for 25 years.

We need new policies to stimulate manufacturing. This [decline] has gone on too long.

The report specifically proposes an industrial policy that promotes manufacturing. Eric Lotke, author of the report, writes:

We need to dispel the notion that America has moved beyond the production of goods. From cars to computers to refrigerators, a country needs things. If we don’t make those things here, then someone else gets our money.

The report also says the experience with the steel industry in Pittsburgh should spawn new trade policies that reflect the truce functioning of the market. It cites Obama’s decision in the tire case as a first step in this new direction.

Read the CAF report here.

Lotke also says the G-20 summit provides an opportunity to examine American patterns of production and consumption. Even when the economy was growing, America ran a combined trade deficit and interest payments of more than $700 billion every year, he said.

We borrowed $2 billion every day to cover the difference. That might have worked well for the countries we bought and borrowed from—but it worked less well for America. It was never sustainable anyway.

As the G-20 leaders plan a recovery from the global downturn, they should not assume that the United States will remain the world’s consumer—spending more than we earn and paying for it with personal and national debt. The G-20 must chart the process by which the global economy that emerges from the crisis is more balanced, and less dependent on U.S. consumption. Growth must be sustainable in Pittsburgh as well as Beijing.

One avenue to create more manufacturing jobs is through the green revolution. Tomorrow, the Alliance for Climate Protection’s Repower America campaign, the USW and the Blue Green Alliance will conclude their Clean Energy Jobs Tour with a rally in Pittsburgh.

The Jobs Tour, a monthlong campaign with more than 50 events in 22 states, is highlighting how a transition to a clean-energy economy will create jobs while reducing harmful carbon pollution and breaking our dependence on foreign oil.

Says David Foster, executive director of the Blue Green Alliance:

We can create millions of jobs building the clean energy economy—whether it’s manufacturing the parts for windmills, building hybrid car batteries or weatherizing homes to make them more efficient. By transitioning to a clean-energy economy, we can revitalize America’s manufacturing sector and boost our economy for the long run by creating jobs here at home.

“Building a clean energy economy can revitalize American manufacturing, but only if we commit to using domestically produced components,” said USW President Leo Gerard.

In confronting the challenges of recession, global warming and energy independence, we have an opportunity to transform our economy and create good jobs that truly are Made in America.

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 saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. 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.

This article originally appeared in the AFL-CIO blog on September 22, 2009. Re-printed with permission by the author.

Why I am Pro-Corporate

Wednesday, July 29th, 2009

I am pro-corporate. I’ll go a step further with that and proclaim that I believe that there are no bad corporations, and that I haven’t seen any corporations do anything wrong.

I see the way you are looking at me. I’d better explain.

The reason I say there are no “bad” corporations is because corporations are not sentient beings that can “do” things or that can be good or bad. They can’t make decisions. Corporations are just a bundle of contracts that allow groups of people to more easily raise capital and amass resources. Corporations are things, like chairs, and things do not make decisions, any more than a chair does. Corporations are tools and tools are neither good nor bad.

When I say I am pro-corporate, this is what I mean: The things that the corporate legal structure enables people to do are good for society. This is why We, the People decided to enact the laws that created corporations. If we want to be able to accomplish things on a large scale, like build a railroad or airports and airplanes or skyscrapers – or solar power plants to replace coal power plants – we want to enable people to more easily raise the necessary capital and amass the resources needed to get the job done. The legal structure of the corporate form of a business accomplishes this.

Corporations, a bundle of contracts, don’t “do” anything, people do. And that is why this discussion is important right now. We are looking here at how to restructure our economy, but before we can do that, we have to correctly identify what went wrong. We have to understand who the good and bad actors were.

So what are some of the things that companies have been doing that we as progressives think should change? Let’s use the highly-publicized example of Wal-Mart and their low wages and benefits and Chinese imports. Wal-Mart always complained about being cast as the bad-actor. They said that if Wal-Mart raised wages and benefits and their competitor Target didn’t, then they would be at a competitive disadvantage and Target would take over the business. And, by extension, any company that tries to “do the right thing” is immediately at a disadvantage to a company that does not.

Looked at this way, if we make Wal-Mart raise wages and Target doesn’t, then not only is Wal-Mart in trouble as a company but now we’re starting all over again trying to get Target to raise wages. And if THEY do so, then along comes K-Mart or Costco or a new company X-Co to pay the low wages, charge lower prices and take away the business. This feels like it is going around in a circle, trying to fix a problem in one place and the pressures of the system immediately make the problem appear somewhere else.

I think blaming companies for the things they “do” also places a lot of stress on people inside of them who might agree with us, and even can alienate them from otherwise supporting progressives. People in the corporate world often feel trapped because the rules of the game require them to engage in what we think of as bad behavior. These are good people who would be very helpful to us in making the correct changes but they feel forced by the system to do the things they do. They are pulled two ways. Executives at Wal-Mart on the one hand can be want to raise wages, and on the other hand have a responsibility to compete with Target.

So what am I getting at here? The companies are not the problem, the rules we set up for them are. Companies operate on a playing field on which the rules of the game are supposed to be decided by US. We, the People are supposed to set up the ground rules and then the companies are supposed to follow those rules. Wal-Mart followed those rules. If we didn’t like the wages and benefits that companies pay, why don’t we change the rules and tell them they all have to pay higher wages and provide better benefits?

Now we’re getting somewhere. Many progressives have been trying to get companies to “behave” in better ways, and haven’t been getting much done — I think due to not correctly identifying the problem. The real problem is that we haven’t set up the rules of the playing field to require these companies – all of them – to provide good wages and benefits, etc. It is our job to regulate what these corporations do. So why didn’t we, through our government, change the rules for all the companies, so they all had a level playing field and clear rules? Identifying why we have not fixed the rules is the path to fixing the larger problem.

What has been happening is that a few people in the bigger companies have been using the resources of those big corporations to influence our system and set the rules of that playing field to give an edge to their companies. They do this so they can personally gain.

This is where we need to focus to fix the corporate system. There should be no way for people in companies to have any say whatsoever in how the playing field on which they operate is set up. How to accomplish this is a subject for future posts.

As I said above, corporations are just a tool, like a hammer. But a hammer can do a lot of damage if a person hits you upside the head with it. That is what we have to stop: a few people using corporate resources and hitting us upside the head.

Oh, and for the record, I am pro-chair, too, though my wife will probably insist I am a pro-couch partisan.

Dave Johnson:Dave is at Fellow at Campaign for America’s Future and a Fellow at the Commonwealth Institute.

This article originally appeared at Blog for Our Future and is reprinted here with permission from the author.

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