Tuesday, September 2, 2014

LABOR DAY: Record Profits Leave Workers With A Whole Lot Of Nothing.


Labor Today
Wages and Salaries Still Lag as Corporate Profits Surge

NY TIMES EDITORIAL
AUG. 31, 2014
        
In the months before Labor Day last year, job growth was so slow that economists said it would take until 2021 to replace the jobs that were lost or never created in the recession and its aftermath.
The pace has picked up since then; at the current rate, missing jobs will be recovered by 2018. Still, five years into an economic recovery that has been notable for resurging corporate profits, the number and quality of jobs are still lagging badly, as are wages and salaries.
In 2013, after-tax corporate profits as a share of the economy tied with their highest level on record (in 1965), while labor compensation as a share of the economy hit its lowest point since 1948. Wage growth since 1979 has not kept pace with productivity growth, resulting in falling or flat wages for most workers and big gains for corporate coffers, shareholders, executives and others at the top of the income ladder.
Worse, the recent upturn in growth, even if sustained, will not necessarily lead to markedly improved living standards for most workers.
That’s because the economy’s lopsidedness is not mainly the result of market forces, but of the lack of policies to ensure broader prosperity. The imbalance will not change without labor and economic reforms.
For instance, new research from the Economic Policy Institute shows that from the first half of 2013 to the first half of 2014, hourly wages, adjusted for inflation, fell for nearly everyone. An exception was a small gain for the bottom 10 percent of wage earners, which was because of minimum-wage increases in 13 states this year.
That’s clear evidence that raising the federal minimum wage, while only a first step toward better pay, would have a powerful effect. A lift from the current $7.25 an hour to the modest $10.10 called for by President Obama and Democrats in Congress would put an estimated additional $35 billion in the pockets of affected workers over a three-year phase-in period.
Unionization is also associated with higher wages and benefits, especially for low-wage workers, which argues for greater legal enforcement of the right to organize without retaliation.
Similarly, stronger enforcement of both labor laws and antitrust laws is needed to ensure against wage theft. Once assumed to be mainly an issue of unpaid overtime or other wage violations, wage theft became a white-collar issue this year, when it was revealed that collusion among the biggest companies in Silicon Valley had suppressed the pay of software engineers by an estimated $3 billion.
The pay of middle-income workers has also been diminished. Decades of outsourcing government jobs to the private sector has undercut public employment, once a mainstay of middle-class life, even as evidence has mounted that outsourcing often does not save money or improve services. What’s needed is a systematic review of government contracts with the private sector and a willingness to end those that are counterproductive.
Another threat to middle-class wages is rampant misclassification — of employees as independent contractors and of workers as supervisors — a tactic that employers use to deny pay and benefits that would otherwise be due. In a promising development, a federal appellate court recently ruled that drivers for FedEx in California are employees, not independent contractors, an example of the courts stepping in when the other branches of government have let an injustice persist.
There has been progress since last Labor Day. Mr. Obama has signed executive orders to improve the pay and working conditions of employees of federal contractors. The Labor Department is revising rules on overtime pay; simply updating them for inflation would make millions of additional workers eligible for time-and-a-half for overtime.
What is still lacking, however, is a full-employment agenda that regards labor, not corporations, as the center of the economy — a change that would be a reversal of the priorities of the last 35 years.

Wednesday, August 27, 2014

Does Any Of This Sound Familiar?


What’s In A Name?

By Nick Paleologos
August 27, 2014

There was this guy named Rick Blair. He died very young--at age 47. During his lifetime, which ended in 1950, he went off and voluntarily lived in a variety of different ghettos under a bunch of assumed names. He also wrote extensively based on those experiences.

His last book, published in England a year before his death, was a real doozy. In it, he imagined a creepy future just three or four decades hence in which any semblance of civil society has been snuffed out by a single-minded minority using their immense wealth and power to re-label nasty things with nice names.

These horrible human beings work inside a giant pyramid called “The Ministry of Truth.” Carved into the concrete on the outside wall of their headquarters are the following three slogans: War is Peace; Freedom is Slavery; and Ignorance is Strength.

Crazy, huh?

In Blair’s imaginary world, information is filtered through people whose belief that the strong should prosper and the weak should perish is relentlessly pedaled under the “Fair and Balanced” banner.

An immigrant is an “alien.”

Brutal torture is “enhanced interrogation.”

Financial instruments involving huge risk are called “securities.”

Bone-crushing debt is actually a generous gift of “credit.”

Mass murder is “ethnic cleansing.”

Kids killed in a UN sanctuary are “collateral damage.”

Soldiers killed by their own troops are victims of “friendly fire.”

That last one really fractures me. I mean the only thing missing from such a grotesque bit of re-branding is a smiley face on the body bag.

In the frightening world of Blair’s book, rational decision-making by the public is virtually impossible because the plain, unambiguous meaning of practically everything has been intentionally twisted to serve the selfish interests of a privileged few.

The more I think about it, I may have mixed up some of the actual details in my description of Blair's harrowing book---except for the part about a Ministry of Truth. But the rest isn't far off from what he actually wrote. Anyway, you should definitely read it. It is guaranteed to scare the bejeezus out of you even though it was published 65 years ago by a guy from another country!

By the way, this book will make you incredibly grateful to be living in the good old US of A in the year 2014—where the people in power always tell the god's honest truth. Because if they don't, there's hell to pay. And where every single one of us gets a first rate education so we can call things like we see them and let the chips fall where they may.

You’ll have to forgive me for drawing a blank on the book's title because it’s been thirty years since I last read it. But you can look it up under the author’s full name: Eric Arthur Blair. If you can’t find it under his real name, try one of his pen names: P.S. Burton; Kenneth Miles; or H. Lewis Allways.

Oh wait. There was one other name he used.

George Orwell.

Saturday, August 9, 2014

When Capitalism Worked For All

By Robert Reich,  August 9, 2014

In recent weeks, the managers, employees, and customers of a New England chain of supermarkets called “Market Basket” have joined together to oppose the board of director’s decision earlier in the year to oust the chain’s popular chief executive, Arthur T. Demoulas.

Their demonstrations and boycotts have emptied most of the chain’s seventy stores.
What was so special about “Arthur T”, as he’s known? Mainly his business model. He kept prices lower than his competitors, paid his employees more, and gave them and his managers more authority.

Late last year he offered customers an additional 4 percent discount, arguing they could use the money more than the shareholders.

In other words, Arthur T. viewed the company as a joint enterprise from which everyone should benefit, not just shareholders. Which is why the board fired him.

It’s far from clear who will win this battle. But, interestingly, we’re beginning to see the Arthur T. business model pop up all over the place.

Pantagonia, a large apparel manufacturer based in Ventura, California, has organized itself as a “B-corporation.” That’s a for-profit company whose articles of incorporation require it to take into account the interests of workers, the community, and the environment, as well as shareholders.

The performance of B-corporations according to this measure is regularly reviewed and certified by a nonprofit entity called B Lab. To date, over 500 companies in sixty industries have been certified as B-corporations, including the household products firm “Seventh Generation.”

In addition, 27 states have passed laws allowing companies to incorporate as “benefit corporations.” This gives directors legal protection to consider the interests of all stakeholders rather than just the shareholders who elected them.

We may be witnessing the beginning of a return to a form of capitalism that was taken for granted in America sixty years ago.

Then, most CEOs assumed they were responsible for all their stakeholders.

“The job of management,” proclaimed Frank Abrams, chairman of Standard Oil of New Jersey, in 1951, “is to maintain an equitable and working balance among the claims of the various directly interested groups … stockholders, employees, customers, and the public at large.”

Johnson & Johnson publicly stated that its “first responsibility” was to patients, doctors, and nurses, and not to investors.

What changed? In the 1980s, corporate raiders began mounting unfriendly takeovers of companies that could deliver higher returns to their shareholders – if they abandoned their other stakeholders.

The raiders figured profits would be higher if the companies fought unions, cut workers’ pay or fired them, automated as many jobs as possible or moved jobs abroad, shuttered factories, abandoned their communities, and squeezed their customers.

Although the law didn’t require companies to maximize shareholder value, shareholders had the legal right to replace directors. The raiders pushed them to vote out directors who wouldn’t make these changes and vote in directors who would (or else sell their shares to the raiders, who’d do the dirty work).

Since then, shareholder capitalism has replaced stakeholder capitalism. Corporate raiders have morphed into private equity managers, and unfriendly takeovers are rare. But it’s now assumed corporations exist only to maximize shareholder returns.

Are we better off? Some argue shareholder capitalism has proven more efficient. It has moved economic resources to where they’re most productive, and thereby enabled the economy to grow faster.

By this view, stakeholder capitalism locked up resources in unproductive ways. CEOs were too complacent. Companies were too fat. They employed workers they didn’t need, and paid them too much. They were too tied to their communities.

But maybe, in retrospect, shareholder capitalism wasn’t all it was cracked up to be. Look at the flat or declining wages of most Americans, their growing economic insecurity, and the abandoned communities that litter the nation.

Then look at the record corporate profits, CEO pay that’s soared into the stratosphere, and Wall Street’s financial casino (along with its near meltdown in 2008 that imposed collateral damage on most Americans).

You might conclude we went a bit overboard with shareholder capitalism.

The directors of “Market Basket” are now considering selling the company. Arthur T. has made a bid, but other bidders have offered more. Reportedly, some prospective bidders think they can squeeze more profits out of the company than Arthur T. did.

But Arthur T. may have known something about how to run a business that made it successful in a larger sense.

Only some of us are corporate shareholders, and shareholders have won big in America over the last three decades. But we’re all stakeholders in the American economy, and many stakeholders have done miserably.

Maybe a bit more stakeholder capitalism is in order. 

Sunday, July 20, 2014

2014: Liz Warren's Admirable Agenda


1. “We believe that Wall Street needs stronger rules and tougher enforcement, and we’re willing to fight for it.”
2. “We believe in science, and that means that we have a responsibility to protect this Earth. And we will fight for it.”
3. “We believe that the Internet shouldn’t be rigged to benefit big corporations, and that means real net neutrality. And we will fight for it.”
4. “We believe that no one should work full-time and still live in poverty. That means raising the minimum wage. And we will fight for it. We will fight for it. And let me add to that: We believe that fast-food workers deserve a livable wage, and that means that when they take to the picket line, we are proud to fight alongside them." 
5. “We believe that students are entitled to get an education without being crushed by debt. And we are willing to fight for it.”
6. “We believe that after a lifetime of work, people are entitled to retire with dignity, and that means protecting Social Security, Medicare, and pensions. And we will fight for them.”
7. “We believe—and I can’t believe I have to say this in 2014—we believe in equal pay for equal work. And we’re willing to fight for it.
8. “We believe that equal means equal, and that’s true in marriage, it’s true in the workplace, it’s true in all of America. And we’re willing to fight for it.”
9. “We believe that immigration has made this country strong and vibrant, and that means reform. And we are willing to fight for it.”
10. “And we believe that corporations are not people, that women have a right to their bodies. We will overturn Hobby Lobby and we will fight for it."