Who are the real “job creators”? Contrary to conventional wisdom, the answer seems to be: People who have jobs – particularly those which pay well. Well-paid employees buy things, and that creates jobs for other people.
And what creates those kinds of jobs? A healthy union movement. Unions are also a bulwark against income inequality, an economic distortion which even conservative Forbes magazine acknowledges is bad for the economy.
It looks to all the world as if there’s a correlation here: Union membership goes down – deficits go up. Perhaps the correlation isn’t as strong as it looks, but the idea isn’t crazy. Higher-paid employees pay more in taxes, which is good for the government’s bottom line. They require fewer government services. The same is true of their families, neighborhoods, and communities. And their contribution to economic growth means everybody’s better off.
The lesson for all those deficit-obsessed policymakers might be, to paraphrase the late Joe Hill: Don’t “austerize,” organize.
Maybe that’s why the 1956 Republican Party platform boasted that under the leadership of President Eisenhower “unions have grown in strength and responsibility, and have increased their membership by 2 millions.” They knew what was good for the economy … and good for business.
“The U.S. Income Distribution and Mobility: Trends and International
Comparisons,” from a newly updated (November 29, 2012) report from the Congressional Research Service. (via nickturse)
The term “McJob” has come to epitomize all that’s wrong with the low-wage service industry jobs that are growing part of the U.S economy. “It beats flipping burgers,” the cliché goes, because no matter what your job might be, it’s assumed to be better than working in a fast-food restaurant.
Today in New York City, though, hundreds of workers at dozens of fast-food chain stores are walking out on strike, demanding better of those jobs. At McDonald’s, Burger King, Wendy’s, KFC, Taco Bell, and Domino’s Pizza locations, workers have been organizing, and today they launch their campaign. They want a raise, to $15-an-hour from their current near-minimum wage pay, and recognition for their independent union, the Fast Food Workers Committee.
Saavedra Jantuah, who works at a Burger King on 34th St. in Manhattan, explained that the $7.30 she makes per hour after two years on the job doesn’t pay her enough to support her son. “I’m doing it for him, I’m going on strike so I can bring my family together underneath one household,” she said. “A union can help us get to where we can make it in New York.”
Cannot even express how thrilled I am about this story. I’ll be on the picket lines with the workers in a couple of hours, with photos and more stories. Service jobs don’t have to be lousy jobs—respect and a decent wage would do a lot.
Compensation for chief executives at American companies grew 15 percent in 2011 after a 28 percent rise in 2010, part of a larger trend that has seen CEO pay skyrocket over the last three decades. Workers, on the other hand, have been left behind.
Since 1978, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker payover the same time period, according to new data from the Economic Policy Institute. […]
Really great interactive map. Hover your mouse over nearly any country to view stats on ag production and needs. There’s also a drop down menu to help show various densities by color on the map. Straight forward and well researched. Check it out and follow the center for investigative reporting.
The United States is the world’s biggest economy and the leading exporter of wheat, corn, beef and many other commodities. It also has the most unequal wealth distribution of all major developed countries. Economic woes in the U.S. have led to one in seven Americans to rely on food assistance.
A half century ago America’s largest private-sector employer was General Motors, whose full-time workers earned an average hourly wage of around $50, in today’s dollars, including health and pension benefits.
Today, America’s largest employer is Walmart, whose average employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.
There are many reasons for the difference – including globalization and technological changes that have shrunk employment in American manufacturing while enlarging it in sectors involving personal services, such as retail.
But one reason, closely related to this seismic shift, is the decline of labor unions in the United States. In the 1950s, over a third of private-sector workers belonged to a union. Today fewer than 7 percent do. As a result, the typical American worker no longer has the bargaining clout to get a sizeable share of corporate profits.
At the peak of its power and influence in the 1950s, the United Auto Workers could claim a significant portion of GM’s earnings for its members.
Walmart’s employees, by contrast, have no union to represent them. So they’ve had no means of getting much of the corporation’s earnings.
Walmart earned $16 billion last year (it just reported a 9 percent increase in earnings in the third quarter of 2012, to $3.6 billion), the lion’s share of which went instead to Walmart’s shareholders — including the family of its founder, Sam Walton, who earned on their Walmart stock more than the combined earnings of the bottom 40 percent of American workers.
Is this about to change? Despite decades of failed unionization attempts, Walmart workers are planning to strike or conduct some other form of protest outside at least 1,000 locations across the United States this Friday – so-called “Black Friday,” the biggest shopping day in America when the Christmas holiday buying season begins.
At the very least, the action gives Walmart employees a chance to air their grievances in public – not only lousy wages (as low at $8 an hour) but also unsafe and unsanitary working conditions, excessive hours, and sexual harassment. The result is bad publicity for the company exactly when it wants the public to think of it as Santa Claus. And the threatened strike, the first in 50 years, is gaining steam.
The company is fighting back. It has filed a complaint with the National Labor Relations Board to preemptively ban the Black Friday strikes. The complaint alleges that the pickets are illegal “representational” picketing designed to win recognition for the United Food & Commercial Workers (UFCW) union. Walmart’s workers say they’re protesting unfair labor practices rather than acting on behalf of the UFCW. If a court sides with Walmart, it could possibly issue an injunction blocking Black Friday’s pickets.
What happens at Walmart will have consequences extending far beyond the company. Other big box retailers are watching carefully. Walmart is their major competitor. Its pay scale and working conditions set the standard.
More broadly, the widening inequality reflected in the gap between the pay of Walmart workers and the returns to Walmart investors, including the Walton fammily, haunts the American economy.
Consumer spending is 70 percent of economic activity, but consumers are also workers. And as income and wealth continue to concentrate at the top, and the median wage continues to drop – it’s now 8 percent lower than it was in 2000 – a growing portion of the American workforce lacks the purchasing power to get the economy back to speed. Without a vibrant and growing middle class, Walmart itself won’t have the customers it needs.
Most new jobs in America are in personal services like retail, with low pay and bad hours. According to the Bureau of Labor and Statistics, the average full-time retail worker earns between $18,000 and $21,000 per year.
But if retail workers got a raise, would consumers have to pay higher prices to make up for it? A new study by the think tank Demos reports that raising the salary of all full-time workers at large retailers to $25,000 per year would lift more than 700,000 people out of poverty, at a cost of only a 1 percent price increase for customers.
And, in the end, retailers would benefit. According to the study, the cost of the wage increases to major retailers would be $20.8 billion — about one percent of the sector’s $2.17 trillion in total annual sales. But the study also estimates the increased purchasing power of lower-wage workers as a result of the pay raises would generate $4 billion to $5 billion in additional retail sales.
This seems like a good deal all around.
CNN Confronts Walmart Spokesperson Over Retailer’s Low Wages, Poor Working Conditions
During an appearance on CNN Tuesday morning, Vice President of Communications David Tovar sought to brush aside the fact that Walmart is paying its associates salaries that are just slightly above the poverty line, even as the company reported a 9 percent increase in third-quarter net income, earning $3.63 billion. He insisted that the company has “got great associates” who are “going to do a great job for us this holiday season.”
But when host Carol Costello pressed Tovar on the growing wealth gap in America and Walmart’s role in insuring a robust middle class, he dodged the question, but not before suggesting that the store offers associates a discount to buy Walmart products (and invest their pay checks back into the company):
COSTELLO: The wage gap in this country continues to grow ever wider. you know, we hear from economists all the time, we need a strong middle class to make our overall economy stronger. Is it Walmart’s responsibility to make sure that its employees can support a strong middle-class lifestyle?
TOVAR: We’re working hard every day to provide more opportunities for associates. […]
COSTELLO: But if a lot of them are making $15,000 a year, you can’t live a strong middle-class lifestyle on that. You just can’t. […]
TOVAR: Our average rate is about $12.40 an hour far a full time associate. We also offer comprehensive benefit packages as low as $17 a pay period, which is very affordable and we also pay quaterly bonuses, which is something that not a lot of retailers do…. And we know that they appreciate that, they also get a 10 percent discount card. So you have to factor in all of those things when you’re looking for how we’re helping associates.
Walmart CEO Michael Drake has a total compensation of $18.1 million, and is the second highest paid executive in the Fortune 500. According to CNN Money, it would take more than 700 employees’ salaries to match his total compensation package.
Making Change at Walmart, the group leading Black Friday’s protest, is asking for a minimum wage of $13 an hour, more full time positions and affordable health care. Currently, the typical employee is paid $22,100 a year, slightly below the federal poverty line for a family of four (which is at $23,050 in 2012). Walmart earned $15 billion last year.
Capuchin monkeys reject unequal pay (by happy moment)
The Rolling Jubilee could influence economic policy as a model for a very different kind of bailout in response to the next financial crisis. The problem of unpayable debts bedevils every corner of our financial system – public, corporate, and personal. So far, the response of the monetary and fiscal authorities to nearly every financial crisis has been to bail out the creditors but not the debtors. Governments and central banks purchase all kinds of shoddy loans from the private sector, but rather than reduce interest or principal on those loans, they merely become the new creditor. The underwater homeowner, the indebted university graduate, the laid-off worker juggling credit cards … they get no relief at all.
The Rolling Jubilee brings a different kind of solution into the public consciousness. The next time a systemic crisis breaks, central banks can rescue the banking system by once again buying the delinquent loans – and then cancel them or reduce the amount borrowers owe. Central banks, with their unlimited capacity to print money, have the power to do this at no cost to the taxpayer. The result would be a release of pent-up consumer purchasing power that had been stuck in debt service. Rising demand would fuel employment, wages, and a broad-based economic expansion.
Would this solution be inflationary? Yes. But a little inflation isn’t necessarily a bad thing, as long as wages rise as fast as prices. Then it is an equalizer of wealth, as the relative value of hoarded wealth shrinks.
Debt cancellation, whether a “people’s bailout” or government policy, is only part of the solution to our economic woes. Deep systemic reforms are necessary, especially given the reality that we are operating a growth-dependent system on a finite planet. But right now, debt is the issue staring us in the face. As always, the most innovative solutions rise from the margins. The Rolling Jubilee may be showing us a glimpse of what is to come.
Yet another reason to support paid family and medical leave: 66.3 percent U.S. new mothers with a bachelor’s degree or more are able to take paid maternity leave but, but just 18.5 percent of new moms with less than a high school diploma had access to paid leave after the birth of a child.
“Those with a car could flee. Those with wealth could move into a hotel. Those with steady jobs could decline to come into work. But the city’s cooks, doormen, maintenance men, taxi drivers and maids left their loved ones at home.” - David Rohde, Reuters
[photo: REUTERS/Eduardo Munoz]
The Institute for Policy Studies (IPS) released their first Inequality Report Card this month, an evaluation of each congressional representative’s voting record on 40 bills aimed at reducing income inequality. The legislation ranges from the ” Buffet Rule” that would establish a minimum tax rate for upper-income Americans to increasing the minimum wage and indexing it to inflation.
IPS gave each congressperson a grade, A through F. Find out how your representatives scored by clicking on the map.
The Report Card does reflect a partisan curve: 48 Republican representatives and 11 Republican senators were given an “F”; the lowest grade a Democrat received was a “C.” The report also includes honor (and dishonor) roles that call out the most 99-percent (and one-percent) friendly members of Congress.