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If Workers’ Share Of National Income Were At The Post-War Average, They Would Earn An Extra $740 Billion This Year

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Image: Pat GarofaloSince 2009, 88 percent of national income growth has gone to corporate profits, while just one percent has gone to wages, adding another chapter to the decline of the middle class, whose incomes have been shrinking and wages stagnating for decades. In fact, according to data analyzed by the Financial Times, workers’ share of national income has fallen to its lowest level on record, and if it were back at the post-war average, workers would earn an additional $740 billion this year:

“We are the 99%”, the slogan of Occupy Wall Street, is a reference to the rising wealth of the top 1 per cent of US income distribution. But an equally valid slogan might be: “We get 58%”.

That figure is the share of US national income that goes to workers as wages rather than to investors as profits and interest. It has fallen to its lowest level since records began after the second world war and is part of the reason why incomes at the top – which tend to be earned from capital – have risen so much.If wages were at their postwar average share of 63 per cent, workers would earn an extra $740bn this year, about $5,000 per worker, according to FT calculations.

This decline in workers’ share of income is actually holding back the national recovery, as “workers on lower wages consume much of their income, while higher wage earners and those with capital income are more likely to save.” Instead of going to the people who are likeliest to spend it, and thus boost the economy, more income is going to corporations and rich people who are just sitting on it. Corporations are actually holding trillions of dollars in cash reserves (and clamoring for more tax breaks), money that could create millions of jobs if it were deployed in a different fashion.

This blog originally appeared in Think Progress on December 15, 2011. Reprinted with permission.

About this 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.


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Will Ford Refuse To Share Profits With Its Workers After Paying Its CEO $26 Million?

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Image: Pat GarofaloThe United Auto Workers and General Motors are close to finalizing a new contract, following the first contract negotiations to take place between the two since GM was rescued by the Obama administration. But the UAW is still working on a deal with Ford, the only one of Detroit’s big three companies to turn down government aid.

Ford has had nine profitable quarters in a row, and paid its CEO, Alan Mulally, $26.5 million last year. But at the same time, it is fighting against giving its factory workers their fair share of the profits from the company’s success:

At The Rouge, Ford’s massive, 94-year-old factory complex in Dearborn, Mich., there’s talk along the assembly lines of winning back raises and bonuses lost when the company was near financial collapse in 2007. Workers, who assemble F-150 pickup trucks at the site, are upset that Ford is trying to cut labor costs, especially after nine straight profitable quarters and a $26.5 million pay package for CEO Alan Mulally.

When the company was going to fail, the workers “gave up cost-of-living pay raises, performance bonuses and other benefits.” Last year, Ford reinstated merit pay and some bonuses to the company’s salaried, white-collar workers, but has yet to do so for its hourly-wage factory workers.

“We have the big honchos taking multimillion-dollar bonuses and they can’t even give us back” concessions, said Joe Pack, 50, who works at Michigan Assembly in Wayne, Michigan. “Ford has to do a lot more,” agreed Gary Walkowicz, who works at Ford’s Dearborn, Michigan plant.

In 2010, CEO pay across the corporate world went up 27 percent, while worker pay went up just 2 percent. Ford’s continued profitability would not have been possible without its workforce, and the company should be sure to recognize that fact during contract negotiations.

This post originally appeared in ThinkProgress on September 28, 2011. 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.


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Fox News’ Megyn Kelly Gets It Right: ‘The United States Is In The Dark Ages When It Comes To Maternity Leave’

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Image: Pat GarofaloFox News’ Megyn Kelly returned to work yesterday after three months of maternity leave, and during her first show, she pummeled shock radio host Mike Gallagher, who back in May called Kelly’s maternity leave “a racket” that was “unbelievable.” Kelly not only took Gallagher to task for poo-pooing the notion that women should be able to stay home with their newborns, but she also pointed out that the U.S. is in “the dark ages when it comes to maternity leave,” as it is the only industrialized nation that doesn’t require employers to give new mothers paid time off: megynkelly0809

KELLY: What a moronic thing to say…Is maternity leave, according to you, a racket?

GALLAGHER: Well, do men get maternity leave? I can’t believe I’m asking you this, because you’re just going to kill me.

KELLY: Guess what honey? Yes, they do. It’s called the Family Medical Leave Act. If men would like to take three months off to take care of their newborn baby, they can. […] Just in case you didn’t know, Mike, I want you to know that the United States is the only country in the advanced world that doesn’t require paid maternity leave. Now I happen to work for a nice employer that gave me paid leave. But the United States is the only advanced country that doesn’t require paid leave. If anything, the United States is in the dark ages when it comes to maternity leave. And what is it about getting pregnant and carrying a baby for nine months, that you don’t think deserves a few months off so bonding and recovery can take place, hmm?…You can’t answer the question because there is no answer, my friend.

Watch it: http://www.youtube.com/watch?feature=player_embedded&v=5BfSBxk0FMc

Kelly is spot-on. As the Project on Global Working families found during a survey of 173 countries, the U.S. is in some bad company when it comes to paid maternity leave:

Out of 173 countries studied, 169 countries offer guaranteed leave with income to women in connection with childbirth; 98 of these countries offer 14 or more weeks paid leave. Although in a number of countries many women work in the informal sector, where these government guarantees do not always apply, the fact remains that the U.S. guarantees no paid leave for mothers in any segment of the work force, leaving it in the company of only 3 other nations: Liberia, Papua New Guinea, and Swaziland.

The U.S. hasn’t required paid maternity leave even though such leave results in “a decrease of complications and recovery time for the mother and [a decrease in] the risk of allergies, obesity, and sudden infant death syndrome for the child.” So it seems that even a Fox News host can be sensible when personally faced with the implications of government policy.

This blog originally appeared in Think Progress on August 9, 2011. 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.



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Teachers Under Fire: At least Nine States Propose Stripping Teachers of Collective Bargaining Rights

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Image: Pat GarofaloLawmakers in several states have launched a broadside against public employees, aiming to cut their pay, slash their benefits, and strip them of their collective bargaining rights. Pivoting off the myth that public employees are getting paid more than their private sector counterparts, governors and state legislatures are scapegoating public workers for their states’ respective budget woes.

One of the biggest targets for these conservatives have been teachers. In fact, lawmakers in at least seven states have proposed stripping teachers of some of their collective bargaining rights:teacherboard

WISCONSIN: Gov. Scott Walker (R), who threatened to call the National Guard on public employees who protested his severe budget cuts, has proposed stripping teachers of all collective bargaining rights except for the right to negotiate wages — and any increase would be capped even before the negotiation starts. Hundreds of Wisconsin high school students walked out of class yesterday to protest Walker’s plans.

OHIO: Ohio Republicans, joined by Gov. John Kasich (R), proposed a bill stripping collective bargaining rights from teachers, leaving only wages negotiable. The bill would also allow districts to unilaterally terminate collective bargaining agreements. Kasich said that if the state legislature doesn’t pass the bill, he will insert its provisions into his budget proposal.

IDAHO: Idaho schools superintendent Tom Luna (R) “has proposed legislation that would limit collective bargaining to teacher compensation, and exclude unions from deliberations over the design of education policies.”

INDIANA: A bill sponsored by three Republican lawmakers in Indiana would “remove certain items from collective bargaining negotiations, including teacher-evaluation procedures [and] teacher-dismissal procedures.” The bill, part of Gov. Mitch Daniels’ (R) education agenda, has already advanced out of one of the state’s Senate committee.

TENNESSEE: Tennessee’s state Senate Education Committee will vote today on a proposal to completely eliminate collective bargaining for teachers, barring teachers from having any outside representation. The legislation surprised many Tennessee teachers, as just last year they negotiated with the state (and made concessions) to craft a new system for teacher evaluation that helped the state win the Obama administration’s Race to the Top program.

ILLINOIS: Groups in Illinois are pushing Republican lawmakers to allow school board to mandate that teachers follow a particular contract, if negotiations are not completed in a certain timeframe, giving districts every incentive to stall and them unilaterally impose their own terms.

NEBRASKA: A bill filed by state Sen. John Nelson would explicitly prohibit the state from participating in collective bargaining; his gripe is that the state “when considering wage and benefit disputes, weighs what employees in similar jobs in other states are getting.” In all, nine bills before the state legislature deal with collective bargaining and the state’s commission that handles labor disputes.

FLORIDA: Gov. Rick Scott (R) wants to limit collective bargaining for teachers to wages and benefits, even though such a move would likely violate the state’s constitution.

MICHIGAN: Lawmakers in Michigan are attempting to strip public employee’s of collective bargaining rights, even though Gov. Rick Snyder (R) had previously said that such a move was unlikely.

These right-wing groups and lawmakers are using the guise of a budget crisis to push through changes to collective bargaining that have nothing to do with the budget. Through collective bargaining, not only can teachers negotiate a fair wage, but they can also ensure that work conditions are optimal and due process is employed when it comes to hiring and firing decisions. Taking these rights away will not alleviate budget deficits.

Of course, at the same time that they are using budget woes to justify attacks on teachers, many of these same states (Ohio, Florida, and Idaho) are proposing new rounds of corporate tax cuts that would blow bigger holes in their already ugly budgets.

About the Author: Pat Garofalo is the Economics Researcher/Blogger for WonkRoom.org at the Center for American Progress Action Fund. His writing has also appeared in The Nation, The Guardian, the Washington Examiner, and at New Deal 2.0.

This blog originally appeared in http://wonkroom.thinkprogress.org on February 16, 2011.


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Business Lobbyists Yearn For The Days When Elaine Chao Ran The Labor Department

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Image: Pat GarofaloWith the calendar turning to 2010, the Associated Press took a look back at the first year of Labor Secretary Hilda Solis’ tenure, pointing out that “her aggressive moves to boost enforcement and crack down on businesses that violate workplace safety rules have sent employers scrambling to make sure they are following the rules.”

In many ways, Solis has completely reversed the course of the Labor Department that was set by her predecessor, Elaine Chao. And Solis’ crackdown has business lobbyists yearning for the days when Chao ran the show:

“Our members are concerned that the department is shifting its focus from compliance assistance back to more of the ‘gotcha’ or aggressive enforcement first approach,” said Karen Harned, executive director of the National Federation of Independent Business’ small business legal center…Chao has claimed that success was the result of cooperating with businesses to help them understand the myriad regulations. Keith Smith, a spokesman for the National Association of Manufacturers, said his members “want to build upon [Chao’s] progress and recognize what’s working.”

Of course, what worked for big business didn’t work at all for workers, as Chao’s Labor Department spent eight years “walking away from its regulatory function across a range of issues, including wage and hour law and workplace safety.”

Consider some of Chao’s legacy. The Government Accountability Office found that her Department “did an inadequate job of investigating complaints by low-wage workers who alleged that their employers were stiffing them for overtime, or failing to pay the minimum wage.” In one survey, 68 percent of low-income workers reported a pay violation in the previous week alone.

The Department’s own inspector general blamed “a lack of management emphasis on worker safety” for unsafe conditions at mines leading to a jump in worker deaths, while fines for workplace safety violations fell so low that employers began “factoring them in as part of their cost of doing business rather than complying with labor laws.” In all, “workers lose $19 billion in wages and benefits through illegal practices, nearly 6,000 American workers die on the job, and at least 50,000 workers die due to occupational disease” each year.

Solis, meanwhile, “slapped the largest fine in [Department] history on oil giant BP PLC for failing to fix safety problems after a 2005 explosion at its Texas City refinery.” She is hiring 250 additional wage-theft inspectors, and “started a new program that scrutinizes business records to make sure worker injury and illness reports are accurate.”

Labor Department staffers were so disgruntled under Chao that they threw a “good-riddance party” to cheer her departure. But for big business, Chao’s tenure meant acting with impunity and facing puny fines on the rare occasions that that were caught, and they’d like to go back.

*This post originally appeared in The Wonk Room on January 4, 2009. Reprinted with permission from the author.

About the Author: Pat Garofalo is the Economics Researcher/Blogger for WonkRoom.org at the Center for American Progress Action Fund. His writing has also appeared in The Nation, The Guardian, the Washington Examiner, and at New Deal 2.0.


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Big Business And Republicans Downplay Threat Of H1N1 Spreading Due To Lack Of Paid Sick Leave

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Image: Pat GarofaloYesterday, the House Education and Labor committee took a look at sick leave policies and their contribution to the spread of the H1N1 virus (swine flu). Public health experts have been voicing concerns that H1N1 is going to be transmitted by ill employees attending work, so Rep. George Miller (D-CA) has crafted a bill that would give employees five paid sick days if their employer sends them home due to H1N1.

Earlier this month, the Chamber of Commerce downplayed the extent to which lack of guaranteed paid sick leave could spread disease, saying that “the problem is not nearly as great as some people say.” And now the rest of the big business community is piling on:

Testifying on behalf of the National Association of Manufacturers Tuesday, A. Bruce Clarke, who runs his own 1,000-member business lobby in North Carolina, told Miller’s committee that most businesses already have comparable or more generous paid leave programs, so why bother? “While some employers may not have taken specific action in response to the H1N1 outbreak, these employers are clearly the exception to the widespread practices taking place today,” Clarke said in his prepared testimony.

And its not only business downplaying the extent of the problem. Rep. John Kline (R-MN), the ranking member on the Ed. and Labor committee, also tried to claim that the “vast majority” of workers have paid sick leave:

“With so many workers already having access to a variety of sick leave options, we need to look very carefully at proposals to add a new layer of federal leave mandates,” the 2nd District Republican said in a prepared statement during a House Education and Labor Committee hearing…According to Kline, the vast majority of workers in the United States already have access to paid sick leave.

Actually, nearly half of private sector workers have no paid sick leave. This includes 78 percent of hotel workers and 85 percent of food service workers, even though they are among the most likely to come in contact with other individuals. 68 percent of workers not eligible for paid sick days say that they have gone to work with a contagious illness.

*This post originally appeared in The Wonk Room on November 18, 2009. Reprinted with permission from the author.

**For more information on H1N1 and swine flu visit this Workplace Fairness resource page.

About the Author: Pat Garofalo is the Economics Researcher/Blogger for WonkRoom.org at the Center for American Progress Action Fund. His writing has also appeared in The Nation, The Guardian, the Washington Examiner, and at New Deal 2.0.


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