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Big corporations suck the marrow out of the COVID-19 economy, leaving devastation behind them

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What’s the use of a crisis if big corporations and wealthy people can’t use it to make more money, preferably at the expense of those with less than them? I ask you! 

Well, by that standard, the coronavirus pandemic has worked out quite well. A large majority of the biggest publicly traded companies were profitable between April and September, but more than half laid off workers. Meanwhile, they watched small business revenue crash and many small businesses go under.

According to a Washington Post analysis, it breaks down like this: “45 of the 50 most valuable publicly traded U.S. companies turned a profit,” with an average of 2% revenue growth through the first nine months of the year. But at least 27 of those 50 firms had layoffs, leading to more than 100,000 people losing their jobs.

At the same time, small business revenue dropped 12%, with at least 100,000 small businesses closing.

To add insult to injury for the workers laid off by these large, profitable companies, many entered the pandemic with rah rah rhetoric about protecting their workers. Salesforce CEO Marc Benioff pledged “not to conduct any significant lay offs over the next 90 days.” He kept that promise. But about two months after that 90 days was up, Salesforce laid off 1,000 workers despite big profits.

This is 21st century corporate capitalism in action. Every disaster is an opportunity for more profit, and responsibility to the workers that make your company run is a meaningless concept. It’s one more reminder that claims about corporate tax cuts—like the ones the Republicans passed in 2017—meaning job creation should never, ever be believed. The tax cuts and the pandemic alike saw companies doing huge share buybacks to benefit the already wealthy, while workers reaped no benefit to speak of.

This blog originally appeared at Daily Kos on December 16, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.


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Millions of U.S Workers for Walmart, McDonald’s and Other Corporate Giants Rely on Food Stamps and Medicaid

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Mil­lions of full-time, adult work­ers in the Unit­ed States?—?many of them employed by Wal­mart, McDonald’s and oth­er high­ly prof­itable cor­po­ra­tions?—?are paid wages so low they’re forced to rely on pub­lic assis­tance to make ends meet. 

That is the key find­ing of a new­ly released report by the non­par­ti­san Gov­ern­ment Account­abil­i­ty Office (GAO). Com­mis­sioned by Sen. Bernie Sanders (I?Vt.), the report ana­lyzed data from 15 agen­cies admin­is­ter­ing Med­ic­aid and the Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP, or ?“food stamps”) across 11 dif­fer­ent states. 

For all 15 agen­cies, Wal­mart was in the top four employ­ers of Med­ic­aid enrollees and SNAP ben­e­fi­cia­ries, while McDonald’s was in the top five for 13 of the 15 agencies.

Oth­er major retail­ers and fast-food com­pa­nies were found to be among the most com­mon employ­ers of work­ers receiv­ing Med­ic­aid and SNAP, includ­ing Dol­lar Tree, Dol­lar Gen­er­al, Tar­get, Ama­zon, Burg­er King, Wendy’s, Taco Bell, Home Depot, Lowe’s, Wal­greens and CVS. Rideshare ser­vice Uber?—?which recent­ly spent mil­lions of dol­lars suc­cess­ful­ly defeat­ing a Cal­i­for­nia law that would have made its dri­vers eli­gi­ble for basic work­er pro­tec­tions and ben­e­fits?—?was also ranked among the top 15 employ­ers of work­ers on pub­lic assistance.

“At a time when huge cor­po­ra­tions like Wal­mart and McDonald’s are mak­ing bil­lions in prof­its and giv­ing their CEOs tens of mil­lions of dol­lars a year, they’re rely­ing on cor­po­rate wel­fare from the fed­er­al gov­ern­ment by pay­ing their work­ers star­va­tion wages,” Sanders said of the report. ?“That is moral­ly obscene.”

The new GAO report echoes the con­clu­sions of sim­i­lar stud­ies by the Uni­ver­si­ty of Cal­i­for­nia, Berke­ley Labor Cen­ter in 2013 and 2015, which found that U.S. tax­pay­ers are sub­si­diz­ing large cor­po­ra­tions to the tune of $153 bil­lion per year in the form of pub­lic assis­tance pro­grams to sup­port their low-wage employees.

“It is time for the own­ers of Wal­mart, McDonald’s and oth­er large cor­po­ra­tions to get off of wel­fare and pay their work­ers a liv­ing wage,” Sanders added.

The fed­er­al min­i­mum wage has been stuck at $7.25 an hour since 2009. While a major­i­ty of states have raised their respec­tive min­i­mum wages above the fed­er­al floor in the past decade, 21 states have not. Thanks to union-dri­ven cam­paigns like the Fight for $15 and Unit­ed for Respect (for­mer­ly OUR Wal­mart), eight states and mul­ti­ple cities have enact­ed grad­ual increas­es to a $15-per-hour min­i­mum wage in recent years. And on Novem­ber 3, vot­ers in Flori­da over­whelm­ing­ly approved a mea­sure to raise their state’s hourly min­i­mum wage to $15 by 2026.

Last July, the Demo­c­ra­t­ic-led House of Rep­re­sen­ta­tives passed a bill to increase the fed­er­al min­i­mum wage to $15 an hour, but the leg­is­la­tion went nowhere in the Repub­li­can-con­trolled Sen­ate. Pres­i­dent-elect Joe Biden sup­ports a fed­er­al increase to $15, but whether or not such a bill can get to his desk in the near future like­ly depends on the out­come of Georgia’s Jan­u­ary 5 runoff elec­tions, which will decide which par­ty gains con­trol of the U.S. Senate.

In Geor­gia?—?where vot­ers will soon deter­mine the short-term fate of the $15 fed­er­al min­i­mum wage?—?the offi­cial state min­i­mum wage is a mere $5.15 an hour, with employ­ers only required to pay $7.25 because of the fed­er­al leg­is­la­tion passed over a decade ago. Accord­ing to the new GAO report, over 143,000 work­ing adults in Geor­gia depend on SNAP ben­e­fits and over 208,000 rely on Medicaid. 

Besides rais­ing the nation­al min­i­mum wage, the GAO’s find­ings also indi­cate the need for fed­er­al leg­is­la­tion allow­ing ser­vice sec­tor work­ers the right to union­ize with­out employ­er inter­fer­ence. After all, the ral­ly­ing cry of fast-food and retail work­ers in recent years has been “$15 and a union.” Because they are orga­nized and can bar­gain with their employ­ers, union work­ers on aver­age earn high­er wages and have greater ben­e­fits than their nonunion counterparts. 

In Feb­ru­ary, the House of Rep­re­sen­ta­tives passed the Pro­tect­ing the Right to Orga­nize (PRO) Act, which would allow work­ers to win union recog­ni­tion through ?“card check” and remove var­i­ous cor­po­rate-friend­ly legal bar­ri­ers to union­iza­tion. But as with the $15 min­i­mum wage bill passed last year, the PRO Act died in the GOP-dom­i­nat­ed Senate.

Impor­tant­ly, the data used in the new GAO report was gath­ered in Feb­ru­ary, before the coro­n­avirus pan­dem­ic began. Since then, with tens of mil­lions of jobs lost, the already mea­ger social safe­ty net has been stretched to the break­ing point. The tem­po­rary and lim­it­ed eco­nom­ic relief pro­vid­ed by the fed­er­al CARES Act in late March has long since dried up, with no new relief pack­age in sight. 

Mean­while, food inse­cu­ri­ty has more than dou­bled from 8.5 per­cent of all U.S. house­holds before the pan­dem­ic to 23 per­cent, and at least 8 mil­lion more Amer­i­cans have fall­en into pover­ty since May. More than 12 mil­lion U.S. work­ers and their fam­i­ly mem­bers have lost their employ­er-spon­sored health insur­ance in the midst of the pan­dem­ic, rein­forc­ing wide­spread calls to enact a sin­gle-pay­er, Medicare for All health­care system.

“No one in this coun­try should live in pover­ty. No one should go hun­gry. No one should be unable to get the med­ical care they need,” Sanders said. ?“It is long past time to increase the fed­er­al min­i­mum wage from a star­va­tion wage of $7.25 an hour to $15, and guar­an­tee health care to all Amer­i­cans as a human right.”

This blog originally appeared at In These Times on November 20, 2020. Reprinted with permission.

About the Author: Jeff Schuhrke has been a Work­ing In These Times con­trib­u­tor since 2013. He has a Ph.D. in His­to­ry from the Uni­ver­si­ty of Illi­nois at Chica­go and a Master’s in Labor Stud­ies from UMass Amherst. Fol­low him on Twit­ter: @JeffSchuhrke.


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Corporations & the Pandemic Killing Fields; Taking a Cleaver to the Pentagon Budget

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Big companies don’t give a second thought to making big profits during the COVID-19 pandemic even if that means thousands of workers—and their families—will get sick and die from the virus. Actually, it’s a feature not a bug, no pun intended—in food processing, all those workers who make sure you get beef or chicken on your plate, are getting sick by the droves, and the only way that happens is because companies, big rich companies, keep dangerous plants operating unsafely because to make things slightly safer would cost them a few bucks. That’s criminal in a normal world. Debbie Berkowitz, director of the worker health and safety program at the National Employment Law Project, joins me to look at the threat to workers—a threat that is growing as the pandemic surges.

A few days ago, Bernie Sanders introduced a bill to cut the bloated Pentagon bi-partisan budget by a very, very modest 10 percent, with the money saved slotted to underwrite human and social programs in cities and communities where the poverty rate is 25 percent or higher. Ashik Siddique, research analyst at the National Priorities Project, talks with me about where the Pentagon could be cut—and how the slashing could go far, far deeper.

This blog originally appeared at Working Life on July 1, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years.


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What Uber and the Koch Brothers Have in Common: A Plan to Destroy Public Transit

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Image result for Jeremy MohlerAt first glance, the rideshare corporation Uber couldn’t appear more different than conservative oil-mogul billionaires Charles G. and David H. Koch. Uber has hired numerous former Democratic Party campaign managers and lobbyists and the company’s CEO, Dara Khosrowshahi, has publicly criticized the Trump administration, including over the travel ban on several majority-Muslim countries. The Kochs, meanwhile, have gained a reputation for bankrolling the Republican Party.

Yet Uber—the Silicon Valley startup-gone-public—shares at least one goal with the most prominent funders of modern conservatism: the destruction of America’s public transit.

While polarization in the United States is on the rise when it comes to metrics like party affiliation and media consumption, there’s a frightening level of agreement in corporate America, regardless of party loyalty. Examining where both Uber and the Koch brothers agree exposes the consensus hiding beneath the surface of our current political gridlock. Yes, rideshare corporations and oil tycoons share a financial interest in a car-centric future. But both also lobby for corporate tax cuts, deregulation and fewer rights and protections for workers. Both also envision a society with weakened or nonexistent public goods, part of a 40-year privatization trend that’s touched everything from public education to water access. From this vantage point, government is, in fact, getting things done and solving problems—just for corporate America rather than poor and working people.

A close look at the growing war on public transit reveals the planks of this corporate consensus.

In documents filed with the Securities and Exchange Commission, Uber’s executives claim to see a “massive market opportunity” in the estimated 4.4 trillion miles traveled each year by people using public transit across 175 countries. The company continues to heavily subsidize per-ride costs to inflate its value to investors and undercut existing options, despite bleeding billions of dollars. “Uber is effectively a middleman for a money transfer from venture-capital (VC) firms to consumers,” writes James P. Sutton in National Review. Simply put, effectively supplanting the taxi industry wasn’t enough: Uber plans on undercutting public transit to finally turn a profit.

For their part, the Koch brothers are funneling money to their political action committee (PAC), Americans for Prosperity, to kill proposed public transit projects nationwide. Last year, they led the charge in stopping a popular $5.4 billion transit plan in Nashville, Tennessee, that had even been backed by a coalition of the city’s business community. The Kochs have funded similar anti-public transit efforts in Arkansas, Arizona, Michigan, Utah and other states.

Their stated rationale, of course, is lower taxes. Americans for Prosperity tried to kill a 2017 gas-tax plan in Indiana meant to raise a billion dollars to invest in buses and infrastructure, even though it was introduced by the state’s GOP-led House of Representatives. Cutting taxes is the Koch brothers’ bread and butter. They contributed $20 million to help pass the Trump tax plan, which slashed taxes for their primary business, Koch Industries, by as much as $1.4 billion a year.

Uber has joined the Koch brothers on this libertarian crusade, using a corporate shell game to avoid paying billions in taxes and lobbying against taxes and fees on rides across the globe.

The corporate behemoths also share a stated goal of “cutting red tape.” The Koch brothers bankrolled the founding of the nation’s first libertarian think tank, the Cato Institute, which sees “limited government,” i.e., deregulation, as a key ingredient of freedom. They also funded the now-defunct Freedom Partners, which developed a road map that shaped the early days of the Trump administration’s deregulatory policy agenda. Uber, together with its main competitor Lyft, boasted more lobbyists in 2016 than Amazon, Microsoft and Walmart combined. As of June 2018, the two corporations had convinced 41 state legislatures and many local governments to pass legislation protecting them from regulation.

Most importantly, both the Koch brothers and Uber understand that their freedom depends on taking freedom away from working people. Uber has spent generously on fighting to ensure its drivers maintain their precarious status as independent contractors. The company has also invested heavily in technology that would get rid of drivers altogether, including driverless cars. The Koch brothers’ anti-worker views date back much further, all the way to the counterrevolutionary days at the end of the New Deal era. Fred Koch, Charles and David’s father, owned an oil refinery corporation and was active in the archconservative John Birch Society. Through groups like the National Right to Work Legal Defense Foundation, the Kochs have long led the attack against collective bargaining rights for public employees, including train and bus drivers.

At the end of the day, the Koch Brothers and Uber are much like Coke and Pepsi. They may have clashing styles, but their product is largely the same: lower corporate taxes, deregulation, lower wages, and private control over public goods like mass transit.

This article was originally published at In These Times on August 13, 2019. Reprinted with permission.

About the Author: Jeremy Mohler is a Washington D.C.-based political writer with In the Public Interest and a meditation teacher.

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Wisconsin’s Foxconn Deal Enriches Billionaires With Taxpayer Cash

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Taiwanese billionaire Terry Gou every once in a while likes to think “outside the box.” Back in 2010, for instance, the giant electronics manufacturer that Gou runs — Foxconn — was facing what corporate flacks like to call a major “PR problem.” Working conditions inside Foxconn’s massive Chinese factories had become so incredibly stressful that workers were committing suicide in shockingly large numbers. They were leaping out factory windows to their deaths.

And what did Gou’s Foxconn do to try to calm the worldwide outrage? The conventional corporate move would have been to dial back the pressure on workers. Foxconn’s move under Gou? The company stretched safety nets in those places where workers would be most likely to leap.

Keeping the pressure on workers — no matter the consequences — has helped Foxconn’s Gou accumulate a personal fortune somewhere north of $6 billion. But Gou has also perfected another sure-fire strategy for piling up the big bucks. He gets taxpayers to give him money. Lots of it.

Gou has cut a wide assortment of subsidy deals over the years, with politicians from Indonesia to Pennsylvania. The deals all follow the same pattern. Foxconn promises to build “job-creating” factories. The political jurisdictions involved hand Foxconn lucrative “incentives” to do the building.

State lawmakers in Wisconsin have now just taken the first step toward approving Foxconn’s biggest subsidy deal yet. The state Assembly has given the green lightto what appears to be the biggest subsidy ever handed out to a foreign firm by a U.S. political entity.

Wisconsin taxpayers will, if this deal gains expected state Senate approval, hand Foxconn $1.35 billion for building a factory complex that will employ 3,000 workers. The total package of “incentives” for Foxconn could hit $3 billion — with $2.85 billion of that in taxpayer cash and another $150 million in various tax breaks — if Foxconn’s operation in Wisconsin ends up employing 13,000 workers.

How much per job would Wisconsin be shelling out? One likely scenario: about $500,000 per job. The worst-case scenario: as much as $1 million per job. And neither number here takes into account the Foxconn deal’s eventual environmental cost. Foxconn will be receiving, besides the taxpayer cash, an exemptionfrom regulations that protect Wisconsin’s wetlands.

So Foxconn gets mountains of cash and a free pass to pollute. What do the people of Wisconsin get? One of the largest “economic development” projects the United States has ever seen, Wisconsin governor Scott Walker crowed last month at a White House ceremony announcing the deal with Foxconn’s Terry Gou and President Donald Trump.

Foxconn’s Jobs

This “once-in-a-lifetime opportunity,” adds an aide to Walker, will bring thousands of “family-supporting jobs.” The new positions, business boosters for the Foxconn deal trumpet, will pay an average $53,000 per year.

But that $53,000 figure only applies to the first 3,000 jobs Foxconn is promising to create and averageshighly paid managerial positions in with job slots for assembly-line workers. Actual workers at the new Foxconn complex will likely take home much less than $53,000.

How much less? Community groups skeptical about Foxconn want any deal with the company to include a wage floor. They’re seeking stipulations that guarantee workers at least $15 an hour. The Republican statehouse majority in Wisconsin has so far quashed every attempt to set a decent wage minimum.

You can’t support much of a family, critics of the Foxconn deal are contending, on less than $15 an hour. And you can’t spur economic development that creates good jobs, add watchdogs opposed to the Foxconn deal, by handing corporations giant giveaways.

Throwing money at businesses, as former Kansas City mayor Mark Funkhouser notes, has been a “bad idea” ever since cities started “offering bonuses and pecuniary inducements to manufacturers” in the late 19th century.

These inducements have ratcheted up considerably over recent years, even before taking the new Foxconn deal into account. Between 1990 and 2015, a new Upjohn Institute study shows, average “incentive” packages for businesses tripled in value.

The results of this vast upsurge in subsidies?  The U.S. political jurisdictions that did all this subsidizing, the Upjohn researchers found, would have experienced the same economic results without the incentives, observes former mayor Funkhouser, “94 percent of the time.”

What Does Create Good Jobs?

What does spur the economic development that creates good jobs? The city of Richmond in Virginia is moving in one hopeful direction. Richmond has begun an Office of Community Wealth Building that aims to enrich local residents instead of billionaire CEOs. The city is focusing on everything from improving regional transportation systems to fostering locally based social enterprises. The Democracy Collaborative, a national organization, has fashioned a network of localities involved in similar “community wealth building” all across the United States.

These operations could certainly use some encouragement from the federal level. But President Trump has proposed a budget, notes Greg LeRoy of Good Jobs First, that eliminates “successful federal programs that benefit small- and medium-sized manufacturers.” The contradictions between Trump’s budget cuts for these programs and his White House cheerleading for the enormous Foxconn subsidy deal, adds LeRoy, “boggle the mind.”

Foxconn’s Terry Gou would likely see none of these contradictions. That the few should benefit at the expense of the many makes perfect sense to him, as the billionaire makes plain in one of the Gou quotation posters Foxconn has plastered on the walls of its Chinese factories.

“Growth,” proclaims this particular Gou quotation poster, “thy name is suffering.”

This blog was originally published at OurFuture.org on August 28, 2017. Reprinted with permission.

About the Author: A veteran labor journalist, Sam Pizzigati has written widely on economic inequality, in articles, books, and online, for both popular and scholarly readers.


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