Nel's New Day

April 18, 2016

D.C. Pays Taxes with No Representation, Corporations Avoid Paying

Filed under: Income inequality,privatization — trp2011 @ 7:24 PM

Your income taxes are due today, April 18. What happened to the deadline of April 15, you might ask. The exact due date is connected to the legal holiday in Washington, D.C. commemorating the date that Abraham Lincoln freed 3,000 slaves in the city. This year, April 16 was a Saturday, making Friday the holiday. There was nobody there last Friday to take your money.

Washington, D.C. is a unique place in the United States because its government has no rights to spend the money it raises from local taxes or pass any laws without permission from Congress. The GOP, the same party who demands states’ rights (unless they don’t agree with their laws) and small government, strictly controls the capital city of the nation. With a bigger share of jobs in high tech except for Seattle and San Francisco, D.C. has a bigger economy per capita that those of 16 states. The share of federal funds that the District relies on to balance its budget is smaller than that of 30 states, meaning that it pays more in federal taxes than it receives. D.C. has a higher population that the states of almost 700,000, larger than either Wyoming or Vermont. Each of those two states has two senators and one representative in Congress who are allowed to vote, but the lone representative permitted from Washington, D.C. can vote on procedural matters and in congressional committees but not on the House floor. The capital has no representation in the Senate.

The city is not allowed to spend any money that it raises from taxes until Congress passes its budget. While the federal government drags its feet, D.C. frequently has to borrow money and then pay interest for funding that it already has. Congressional budget stalemates force D.C. to austerity measures, causing delays in hiring and finalizing contracts. Government shutdowns that the GOP occasionally force on the country weighs down the District’s bond ratings which also increases borrowing costs for major projects.

Before GOP presidential candidate Ted Cruz decided to shut down federal agencies in 2013, Washington’s city officials set into motion a plan to financially disconnect D.C. Congress. They eliminated the city charter requirement that D.C. had to submit its budget to Congress for appropriation and unanimously adopted a budget autonomy amendment. In April 2012, D.C. voters overwhelmingly ratified the proposal that the District was not forced to wait for Congress to pass the federal budget to spend its own money and instead treat its plan as it does local legislation.

D.C. decided it will submit spending and laws to Congress for approval or rejection within 30 days. Both chambers must vote down the submissions before the president signs off, something that has happened only three times in the past 40 years. The budget autonomy amendment has been challenged in the courts, with mixed results. A U.S. District Court judge earlier ruled that the charter amendment was invalid, but D.C. Superior Court Judge Brian F. Holeman ruled last month in favor of the District.

Unlike previous years when the District has been forced to wait for Congress to approve its spending as part of the federal budget, the city plans to begin spending its money unless federal lawmakers act to stop it. Mayor Muriel E. Bowser has called for the end of slavery for all 672,000 Washington, D.C. residents:

“One hundred and fifty-four years after President Lincoln abolished slavery in the District of Columbia, we remain at the mercy of those we did not elect to office. It is just not right, and we must stand together until our rights are recognized.”

She calls congressional control over non-voting U.S. citizens the country’s “biggest ongoing voting rights violation.” District license plates read “taxation without representation.” Citizens pay federal taxes but have no voice in how that money is spent. The GOP has blocked the capital from funding abortion coverage for low-income women, needle-exchange programs, and counting ballots on legalizing medical marijuana.

Last week, the new head of Washington’s Metro met behind closed doors with senators from Maryland and Virginia. The issue was safety issue for the transit system, funding for repairs, and an unexpected shutdown of the Metro last month. No one from D.C. was allowed at the meeting.

Bowser also calls for the District could be admitted to the union under the “Tennessee model.” The former federal territory became the 16th state with no ratification from the other states by approving a state constitution and a pledge to form a republic-style government.

The deadline for passing a budget in the House is April 15, but Speaker Paul Ryan (R-WI) couldn’t manage to get his caucus together. House members left last week leaving that bit of unfinished business. With no budget, the House can pass a “deeming” resolution, setting a top line spending number in place of a budget resolution and acting as if a budget has been passed.

Residents of Washington, D.C. are paying more than $1.6 billion in taxes today—perhaps more than that because politicians who live in D.C. register in their home states. Meanwhile major U.S. corporations—Apple, Citigroup, Microsoft, Pfizer—avoid paying $700 billion in taxes because they stashed $2.4 trillion in other countries. U.S. residents—including those in D.C.—pay more in taxes than Fortune 500 companies PG&E, State Street, Con Edison, Weyerhaeuser, Duke Energy, and Qualcomm combined.

One-tenth of $700 billion could pay ten years of universal preschool for every 4-year-old child in low and moderate income families. One-half of $700 billion could double the five-year budget for highway repair and mass transit. Nine million students could get two years of free tuition at community colleges during the next ten years for only 11 percent of $700 billion. At this time, corporations are persuading Congress to forgive the taxes when they bring the money back to the U.S. The last time they did this, described as “repatriation,” they were given a tax rate of 5.25 percent in 2004 with promises for new jobs and then reduced their workforces. Corporations spent the money on mergers and stock buybacks before setting up more real or dummy operations overseas where they could shelter more profits.

Nearly 20 percent of large U.S. corporations reporting a profit on their financial statements in 2012 paid nothing in U.S. corporate income taxes. GOP campaigns loudly announce that a 35-percent top on taxes for corporations is far too much, but big profitable companies pay an average of 14 percent of pretax income for federal taxes. That’s about what the upper middle class pays.

State taxes differ across the country, but the poorest 20 percent of people in the U.S. paid an average of 10.9 percent of their income in state and local taxes while the middle 20 percent of Americans paid 9.4 percent. The top 1 percent, meanwhile, pay only 5.4 percent of their income to state and local taxes.

About 44 percent of the taxes you paid today goes to past or current military spending. With 25 percent going to the Pentagon and current military spending, another 19 percent goes to “veterans’ benefits plus 80% of the interest on the debt.” The veterans’ benefits come from the GOP insistence on causing more wars. Over half the Pentagon funding goes to private contractors with the largest part to procurement of weapons and other goods.  A large chunk goes to service contractors that charge three times as much for their services in the military as for non-military services. This corporate profit is most likely sheltered overseas with little or no taxes coming to the United States.

Conservatives mourn the passing of the 1950s, a “golden age” for the country as far as they were concerned. With a growing economy, the country was wealthy, jobs paid more and lasted longer, and the U.S. was seen as a powerful nation. The U.S. was #1 in GDP per capita. President Dwight Eisenhower was behind the building of the interstate highways that linked almost all parts of the nation.

I’ll join these conservatives in being wistful about the time. In 1950 corporate taxes accounted for 30 percent of federal revenue, compared to less than seven percent in 2012. The top corporate tax rate was 52 percent in the 1950s compared to the current 35 percent. The top marginal tax rate was 92 percent during that time compared to 39.6 percent now. Sheltering money, however, means that the wealthiest people pay a much lower percentage than the bracket. History shows a correlation between higher top marginal tax rates and economic growth, dropping from 4 percent to 2 percent when the top rate shrank to about 35 percent.

Meanwhile, happy Tax Day. You’re most likely paying more than the wealthy and far more than corporations. And almost half of it will go to war.

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May 2, 2015

Sanders Enters Presidential Race

Some people celebrate May Day today with a pagan celebration of flowers and Maypoles; others recognize it as a day of protest and worker solidarity. That history goes back to 1886 when 200,000 U.S. workers struck for an eight-hour day. On the third day, a Chicago strike at the McCormick Reaper plant became violent as police killed and injured the strikers. The next day’s peaceful meeting at Haymarket Square protesting police action turned even more brutal. As the meeting started to break up, a bomb near the speaker’s wagon wounded 60 policemen and killed another seven. The police wounded 200 civilians and killed several more. Although no one was sure who had committed the crime, four people were executed. No one in the U.S. had an eight-hour day until the United Mine Workers in 1898; a federal law mandating the eight-hour day wasn’t passed until 1938.

The international holiday for labor, created in 1889 in honor of the Haymarket Tragedy, continued to be commemorated for over a century although conservatives tried to change the meaning in 1958 to “Loyalty Day” through a resolution signed by President Eisenhower. The declaration of May Day as “a special day for the reaffirmation of loyalty to the United States of America and for the recognition of the heritage of American freedom” remains in the 21st century. To this day, 27 years later, my town still celebrates the “Loyalty Day.”

Sen. Bernie Sanders (I-VT) declaration as a presidential candidate in the Democratic Party on April 30 was a great lead-in to this year’s May Day. For decades, Sanders has been advocating for the rights of workers, the middle class, and the poor. His platform lists the need for “new economic models to increase job creation and productivity instead of giving huge tax breaks to corporations which ship our jobs to China and other low-wage countries.” His proposal is worker-owned cooperatives, which studies show increase productivity and employee satisfaction while shrinking absenteeism.

An example is the Mondragon corporation in Spain that “has over 70,000 employees and brings in annual revenues of over $12 billion Euros.” In most of its operations, “the ratio of compensation between top executives and the lowest-paid members is between three to one and six to one.” In comparison, U.S. CEOs made 295.9 times the amount of worker salaries in 2013, up from 20 to one in 1965. No one in the U.S. even dreams of a six to one ratio: Massachusetts Nurses Association tried—and failed—for a ballot initiative fining hospitals paying CEO’s more than 100 times the earnings of the lowest-paid employee.

worker compensation chart

The salary of chief executives climbed 937 percent between 1978 and 2013 compared to the 10-percent increase for the average worker’s compensation. Bringing back workers’ rights to organize also helps ensure that workers share in the profits and productivity that they help to generate.

Another way to protect workers is Sanders’ push to stop  the Trans-Pacific Partnership (TPP). Since 2001, trade agreements have closed down almost 60,000 factories in the U.S. causing the loss of millions of jobs. In one TPP country, Vietnam, “the minimum wage is equivalent to 56 cents an hour, independent labor unions are banned and people are thrown in jail for expressing their political beliefs or trying to improve labor conditions. In Malaysia, migrant workers who manufacture electronics products are working as modern-day slave laborers who have had their passports and wages confiscated and are unable to return to their own countries,” Sanders wrote. As he pointed out, U.S. workers would compete with people in Vietnam and Malaysia in “a race to the bottom.” The increased profits for corporations and Wall Street come from “offshoring jobs, undercutting worker rights, and dismantling labor, environmental, health, food safety and financial laws.” The U.S. would also lose its sovereignty as foreign corporations can defeat domestic policies and laws in international tribunals.

Sanders has already released a 12-point Economic Agenda for America. As a leader in a growing consensus agenda for Democrats, Sanders 12-point Economic Agenda for America includes increase in the minimum wage, paid sick days, paid vacation, pay equity, and affordable child care. Equally important is his addressing the systematically rigging of rules producing extreme income inequality. He wants an end to corporate-defined trade and tax policies resulting in destructive trade deficits and calls for breaking up the banks “too big to fail.” His proposal for expanding security programs includes lifting the cap on Social Security payroll taxes, moving to a health care plan of Medicare for all, and providing two years of debt-free college or other advance training for all students who prove themselves willing to earn it.

Like Libertarians, Sanders opposes the idea that the U.S. has the responsibility to police the globe. As many people recognize, endless wars waste lives and take resources from the U.S. At this time, $0.27 of every tax dollar goes to the military.

Sanders plans a social and economic justice candidacy at a time when people want change. The publicity and protests surrounding the police killing black males has brought to the forefront debates about racism, economic inequality, political campaign funding, and criminal legal system injustices. Sanders’ devastating 8.5-hour-long filibuster against President Obama’s budget agreement with the Republicans has been published as a book: The Speech: A Historic Filibuster on Corporate Greed and the Decline of Our Middle Class. The budget agreement extended the George W. Bush tax cuts for millionaires and billionaires, lowered estate tax rates for the wealthy, and established a “payroll tax holiday” diverting revenue away from the Social Security Trust Fund and threatening the fund’s future.

In addition, Sanders pointed out the U.S. middle class collapsed through corporate greed and public policy favoring the wealthy for several decades while childhood poverty in the U.S. rose to the highest rate in the industrialized world. He finished with a call to the middle class, a call to action that would take on the powerful special interests that elect legislators and guide their votes.

Sanders may encourage Hillary Clinton to take more questions from the press. In a bit over two weeks on the campaign trail, Clinton took seven questions, according to National Journal’s Zach Cohen, with half of the answers ignoring the questions. During just one five-minute exchange with MSNBC’s Andrea Mitchell the night before his brief campaign kick-off, he answered seven questions and took another six at the next day’s launch event. As Sanders said, “I believe that in a democracy, what elections are about are serious debates over serious issues … facing the American people.”

What makes Bernie stand out, more than his progressive platform and his great understanding of the problems currently facing the country, is his honesty. As Matt Tabbi wrote:

“Sanders is a politician whose power base is derived almost entirely from the people of the state of Vermont, where he is personally known to a surprisingly enormous percentage of voters. His chief opponents in the race to the White House, meanwhile, derive their power primarily from corporate and financial interests. That doesn’t make them bad people or even bad candidates necessarily, but it’s a fact that the Beltway-media cognoscenti who decide these things make access to money the primary factor in determining whether or not a presidential aspirant is ‘viable’ or ‘credible.’”

The opposition to Sanders uses the word “socialist” as a pejorative term against him. He describes himself as a democratic socialist, with the meaning that elected government sometimes needs to slow down the nation’s progress toward a complete oligarchy. That means not giving tax breaks to companies who decimate the middle class by moving factories overseas.

As Sanders starts his run for president, manufacturing jobs are returning to the United States in record numbers, and foreign companies are also bringing their factories here. In 2012, 60,000 of these jobs were added in the U.S. compared to only 12,000 in 2003 during George W. Bush’s first term. Only 50,000 jobs were sent offshore last year, declining from 150,000 in 2003. That leaves 3 million to 4 million manufacturing jobs still offshore.

The bad news is the reason for these returns. With Chinese workers demanding higher wages and better working conditions, U.S. companies are coming back to the nation that has been stripped of union rights and a federal minimum wage of $7.25. U.S. workers’ wages have remained stagnant for years while China’s wages are going up by 8.3 percent per year. Chinese private-sector wages went up 14 percent in just 2012, and a year ago, 30,000 Nike workers struck for higher wages. Among companies with annual sales above $1 billion, 37 percent plan to reshore manufacturing jobs from China to the U.S. due to higher labor costs in China. Of companies above $10 billion, 48 percent are planning to return. A return of these low-paying jobs means that U.S. taxpayers can lose more money through subsidies to manufacturing companies while the taxpayers continue to pay welfare benefits because of the same companies’ low wages.

Most of the U.S. taxpayers would live better and pay less taxes if the government incorporated the ideas in Sanders’ platform.

April 14, 2015

Women Make Less, Pay More

Women working full time, year round in 2013 earned an average of $0.78 for every dollar earned by men working full time, year round. In all but one of the occupations, stock clerks and order fillers, however, women earn less than men. Women in that one occupation, employing 0.7 percent of women in the full-time labor force, made $10 more per week than men. Both male and female health practitioner support technologists and technicians have the same median earnings per week, again employing 0.7 percent of women in the full-time labor force. The largest wage gap was $633 more per week for men in the personal financial advisor field.

The argument that the wage gap comes from “women’s choices” doesn’t hold water because this gap persists when women choose the same jobs as men. For example, male surgeons earn 37.76 percent more per week than their female counterparts; women make almost $40,000 less per year than men. The same problem is true for lower-paying, female-dominated careers: women are 94.6 percent of all secretaries and administrative assistants but earn 84.5 percent of what men in the same field do.

In nursing, a career with ten women to every man, male nurses make between $3,800 and $17,000 more than women each year. In a study of over 290,000 nurses, men made about 8 percent more every year from 1988 to 2013, taking into consideration location, age, race, marital status, and children. Two reasons given are gender discrimination and stronger negotiating skills on the part of men.

Education doesn’t explain the wage gap because women finish college and graduate school at higher rates than men. The answer is policies that support women who are expected to provide the vast majority of care for their families—paid sick days, paid family leave, equal pay protections, and pay transparency.

In a study of almost 10,000 MBA graduates, all with full-time jobs lined up, women’s starting salaries were almost $15,000 less than for men. The arguments of different work experience, flexibility to care for children, desire for part-time jobs, and no ambition for the top—all misplaced arguments for the gender wage gap—have no relevance in this comparison. In 17 of 22 industries, women were offered less starting money than men–in finance, $22,000 lower.

Today, April 14, is Equal Pay Day, representing how far into a new year that full-time working women have to work to earn as much as men did the previous year: 104 days. That’s an extra three months and fourteen days to make an “equal” pay for men last year.

Last fall, the Paycheck Fairness Act failed for the fourth time in the U.S. Senate, with a unanimous GOP vote, including all four women. The law would help women learn whether they earn less than male colleagues and require employers to explain why two similarly qualified workers earn different wages. It was the third time since 2012 that Republicans voted down the bill. The most recent bill had 52 votes but needed 60 to break the filibuster.

According to Sen. Kelly Ayotte (R-NH), she voted against the law because it might prohibit merit-based pay and the Democrats had opposed her amendment. Sen. Susan Collins (R-ME) said that the Civil Rights Act and the 1963 Equal Pay Act provide enough protection. Tea Partier Sen. Deb Fischer (R-NE) said, “It’s a one-sided vote for political reasons, so [Democrats] can use it in campaigns.” These women all receive $174,000 per year, the same salary as their male counterparts. That’s 4.6 times women workers’ median yearly income but only 3.5 times that of working men.

Women not only work longer to make the same pay as men but also have to pay more for the same items. Twenty years ago, a California study showed that women’s razors, cologne, moisturizers, and haircuts cost more even if it was the same product as for men. The higher price tag for women was approximately $151 billion a year. Twenty years later, though, women are still paying more than men.

The “pink” tax is still with us, and The Daily Share has a video to show this. Pink razors still cost more than blue ones, and the Neutrogena facial moisturizer marketed for women at $11.42 is ten percent more expensive than the one retailed for men at $10.35. Both have the same ingredients. Neutrogena explained that the price differences “are related to a number of factors, including packaging differences, modifications of the formulation that impact the manufacturing process, and the discretion of each retailer.”

The additional costs for women keep mounting. Men can get a hair trim for $28 while women might pay $44, almost 60 percent more. Although an oxford shirt may cost men and women the same, the dry-cleaning for women’s clothes costs more than for men. Some cleaners refuse to launder women’s shirts, requiring females to pay for dry-cleaning their clothes.

Last fall, a change.org petition addressed the gender discrimination at Old Navy. Plus-size women pay much more for their larger sizes–$40 instead of $27–but men pay the same for their jeans no matter what the size—just $25. In addition, larger men don’t have to go to a different department for their jeans. Old Navy’s excuse about making women’s clothing more “flattering and on-trend” doesn’t hold up because the company doesn’t charge more to “flatter” petite-size women. After almost 100,000 signatures, Old Navy said that it would send the issue to its customer panel but has made no actual changes.

GenderedProducts5 bicLate in 2012, Bic released a pen designed for women. Ellen DeGeneres made it the topic of a monologue on her talk show and produced her own ad for the product. “They’re just like regular pens,” she said, “but they’re pink, so they cost twice as much.” The comments show that women get the irony of charging more for “pink.” Another company even produced a pink globe.

 

 

pink tax shirts

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In unisex styled shirts, women still pay more. The women’s version of this Hanes tee is $2 more per shirt (a 20% increase), despite being smaller and cut in the same “relaxed” fit as the men’s. At Target, women pay 36 percent more to get an almost identical bicycle as the one sold for men. Car purchases and repairs cost more for women.

Tariffs also ding women in their pocketbook. Twelve years ago, Michael Cone, a New York City trade lawyer, found that men’s sneakers were taxed at 8.5 percent compared to the ten-percent tax for women’s sneakers.

Women are poorer in every state; the difference is more pronounced in Southern states—particularly Louisiana, Mississippi, and Tennessee. Nationwide, 15.5 percent of women live in poverty, compared Single mothers fare far worse than single fathers, almost twice as likely to be living in poverty at 43.1 percent compared with 23.6 percent. Check here to see the wage gap by state.

Girls are taught from childhood that they are valued less than boys. A study found that almost 70 percent of boys get an allowance as compared to under 60 percent of the girls. At the same time, girls do more than two hours more housework a week than boys who spend twice as much time playing. Boys are also 15 percent more likely to get an allowance for doing household chores than boys. Just as in adulthood, females are expected to work without pay.

men winning raceNothing shows the reality in the United States wage gap better than the cover of the University of North Georgia’s latest continuing education catalog that shows the white men ahead after getting a UNG education. The image is obviously a matter of poor judgment, but women make less money and pay more than men for the same products. The school has apologized and reprinted the catalog. In the same way, federal and state legislators should pass laws for paycheck fairness and genderless charges for products and services.

January 8, 2015

George Orwell, an Optimist

Filed under: Income inequality,Surveillance — trp2011 @ 8:57 PM
Tags: , , , , ,

The year before George Orwell died in 1950, he published his classic novel 1984. It is a dark story of a country in perpetual war, ever-present government surveillance, and public manipulation under the control of the Inner Party elite which comprised 2 percent of the population. Big Brother, described as a highly personable quasi-divine Party leader, may not have even existed. The Party “seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power.” Winston Smith, the novel’s protagonist, works for the Ministry of Truth which creates propaganda and historical revisionism through rewriting newspaper articles. Other ministries are Peace (perpetual war), Plenty (economic affairs–rationing and starvation), and Love (law and order–torture and brainwashing

“George Orwell was an optimist,” as Marjorie Cohn quoted Mikko Hypponen in her article, “Beyond Orwell’s Worst Nightmare.”

The National Security Agency (NSA) collects metadata on billions of our phone calls and 200 million of our text messages every day so that our government would read the content of our emails, file transfers, and live chats from the social media we use. In discussing NSA reforms, President Obama talked about Paul Revere’s patrolling the streets at night in the 18th century his the Sons of Liberty, “reporting back any signs that the British were preparing raids against America’s early Patriots.” This weak effort justify NSA’s spying ignored the fact that patrolling streets is not monitoring people’s private communications.

Left out of this argument about the U.S. spying is how the nation’s founding fathers responded to the British searches before the American Revolution. The British used the same “general warrants,” authorizing blanket searches without any individualized suspicion or specificity of what the colonial authorities were seeking, similar to what happens today. In a petition to King George III, Congress protested this unlimited power of search and seizure and charged that they used their power “to break open and enter houses, without the authority of any civil magistrate founded on legal information.” That was the reason for the Fourth Amendment’s ban on unreasonable searches and seizures—preventing the United States from becoming another police state.

Almost 200 years later, FBI Director J. Edgar Hoover ran his COINTELPRO (counter-intelligence program to “disrupt, misdirect, discredit and otherwise neutralize” political and activist groups. In the McCarthy witch hunts of the 1950s, the U.S. government, under the guise of eliminating communism, used widespread illegal surveillance to threaten and silence anyone with unorthodox political views. The FBI’s “red-baiting” blackmailed, jailed, blacklisted, and fired thousands of U.S. citizens.

In the 1960s, the FBI’s program, “Racial Matters,” targeted Dr. Martin Luther King Jr. to prevent him from registering black voters in the South. Again the claim of communist activities allowed the FBI to wiretap King’s phones in attempts to discredit him. Their goal was to drive him to divorce and possibly suicide.

An attempt to justify today’s extreme surveillance programs is that it is targeting real threats. Yet an independent federal privacy watchdog, the Privacy and Civil Liberties Oversight Board, has found “no instance in which the program directly contributed to the discovery of a previously unknown terrorist plot or the disruption of a terrorist attack.” The NSA spying program covers everyone—Mexico, Latin America, the United Nations, the European Union Parliament, European leaders—even Angela Merkel’s cellphone. The only reason that anyone knows part of the extent of this surveillance comes from the disclosures by Edward Snowden, an exiled man threatened with decades of prison.

Reforms to the spying program include the requirement that NSA obtain approval from a judge on the Foreign Intelligence Surveillance Court before it gets access to the phone records of an individual. Yet this court is secret, and its judges are appointed by the highly conservative Chief Justice John Roberts. Almost no executive branch wiretapping requests have been turned down since the court’s inception in 1978. President Obama has not said that surveillance without judicial warrants or individual suspicion should be stopped.

The Doublethink of 1984 shows the thinking of today’s Congress:

“The keyword here is blackwhite. Like so many Newspeak words, this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink. Doublethink is basically the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.”

The purpose of unwinnable, perpetual war is to consume labor and commodities. Because the country’s economy cannot support equality a high standard of life for all, the “proles” are kept poor and uneducated so that won’t realize what the government is doing. In that way there is no danger of rebellion. These people live with hunger, disease and filth in ruined cities and towns while the top two percent have clean and comfortable homes in areas separated from their poor. Their pantries are well-stocked with foodstuffs such as wine, coffee, and sugar that are denied to the general populace.

Inner Party member O’Brien describes the Party’s vision to the protagonist of 1984:

“There will be no curiosity, no enjoyment of the process of life. All competing pleasures will be destroyed. But always—do not forget this, Winston—always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face—forever.”

Leaders of the Inner Party use a culture of fear to control the masses.

“War is peace, freedom is slavery, ignorance is strength.” Read 1984 for yourself.

December 5, 2014

Poorly-paid Workers Forced into Non-Compete Agreements

The possibility of an increase in minimum wages has attracted the ire of many conservatives in the United States. President Obama was threatened with lawsuit after he issued an executive order that employers with federal contracts would be required to pay a minimum of $10.10 per hour.

While the federal government refuses to act, however, other places have taken action. In the most recent election, five states—four of them considered red—approved raises to the minimum wage. In addition to Alaska, Arkansas, Illinois, Nebraska, and South Dakota, counties in Wisconsin and two California cities, San Francisco and Oakland, passed ballot proposals to increase the wage.

Employee protests throughout the country are also demanding $15 per hour. Last September, more than 400 people were arrested in nonviolence civil disobedience in 150 cities.

The pittance that wealthy corporations pay their employees is egregious, but it doesn’t match the practice of some employers—that employees sign a mandatory non-compete agreement to be hired. Traditionally this action has been used for CEOs or people with highly specialized skills and knowledge. The purpose of a non-compete clause is to keep the employee from taking confidential knowledge or trade secrets to another business for a specific length of time. Some states ban non-compete clauses, but in other states, businesses are demanding these for minimum-wage employees.

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If you get a sandwich at one of the 2,000 Jimmy John’s sub sandwich restaurants, your server may have a non-compete clause, as does the person who made the sandwich. Top executives can negotiate their non-compete clause in a contract; a minimum-wage worker is so desperate to get a job that they have to agree. Fired top executors are likely to be paid for the time of the clause; fired minimum-wage workers are out on the streets without any right to get a similar job.

Jimmy John’s requires that workers agree to not work on any of the chain’s competitors for at least two years after employment at Jimmy John’s. The agreement’s definition of “competitors” is quite broad:

“Employee covenants and agrees that, during his or her employment with the Employer and for a period of two (2) years after … he or she will not have any direct or indirect interest in or perform services for … any business which derives more than ten percent (10%) of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches and which is located with three (3) miles of either [the Jimmy John’s location in question] or any such other Jimmy John’s Sandwich Shop.”

The area in which employees could not work covers 6,000 square miles in 44 states and the District of Columbia. For example, a student who worked at a Jimmy John’s in Illinois during high school could not work almost anywhere in Tuscaloosa serving sandwiches—including a school cafeteria–when he attended the University of Alabama.

One reason for the non-compete clause would be to prevent any dissent among workers who would be less likely to attempt to unionize if they knew they could not get another job after being fired. For example, Erik Forman and five other workers were fired from a Minneapolis Jimmy John’s over three years ago for trying to unionize their store. Originally the workers brought lawsuits claiming that the company forced employees to work off the clock but amended the suit to argue that the non-compete agreement is overly broad and “oppressive” to employees.

One of the employees forced to sign the agreement was an assistant store manager, the other a delivery driver and assistant store manager. Forman, who graduated from Macalester College, couldn’t find a job while the case was being appealed. Another fired worker, a graduate of the University of Minnesota, went ten months without a job after he was fired from Jimmy John’s, where he made $7.50 an hour, before he found another low-paying job in the retail industry.

The issue for creating a union was the company’s sick-day policy. Workers were required to find their own replacements if they called in sick, and they didn’t get paid for the time. If they couldn’t find anyone to fill in, the company assigned them demerits.

Over two years ago, a federal judge ordered MikLin Enterprises, which owns 10 Jimmy John’s franchises, to reinstate the six workers with backpay, but the case dragged on for over two years. Last August, the National Labor Relations Board ruled that Jimmy John’s had violated the National Labor Relations Act by firing the workers and ordered them reinstated. MikLin is considering its “options.”

A former Subway manager has accused her earlier employer of trying to block her from starting a new job at another sandwich shop. The woman signed an agreement in 2009.

In Bellevue (WA), Benny Almeida faced the same issue when, desperate to get a job, he took a $15 an hour position as a water-damage cleanup helper. Three months after he started with ServiceMaster of Seattle, he was offered a job with another firm for $18. The non-compete agreement that he had signed covered King, Snohomish, Island, Yakima, and Kittitias counties—a rather large area. The clause meant that he also was prevented from working for two years in any water- or fire-damage job, janitorial, office cleaning, window washing, floor or carpet cleaning or other job ServiceMaster does. ServiceMaster said the clause was for the training, but Almeida said he didn’t get any. He thought the clause applied to managers high enough to have client lists or leave to start competing businesses.

The non-compete clause is just one way in which employers abuse their employees. Workers at an Amazon warehouse in Nevada aren’t paid for the time that they wait to be screened at the end of their workdays while the company makes sure they have not stolen any goods. FedEx workers are “independent contractors,” according to the company, and therefore don’t have benefits, reimbursements of incurred costs, and overtime. Retail workers are assigned inconvenient schedules that change at the last minute, meaning that they cannot make any plans including college classes. They can even be sent home if sales are slow but have no right to deal with family members who become ill.

The entire issue boils down to questions of ethics and economics. Big business claims that they can’t afford to treat employees on a higher level than medieval serfs, but a few large companies, including Costco, Whole Foods, and In-N-Out Burger, have found that treating their employees like human beings has been good business.

Unfortunately for Jimmy John’s, negative publicity has brought to light the ridiculous practice of non-compete agreements for poorly-paid employees. Thirty-seven congressional members are requesting an investigation by the Federal Trade Commission and the Department of Labor.

One element that courts examine in determining the validity of a non-compete agreement is whether it is necessary to protect the employer’s legitimate business interests instead of merely restricting the worker’s ability to find another job. A recent Kentucky Supreme Court ruling in Creech, Inc. v. Brown ruled that continued employment with no other reasons is insufficient to justify the agreement. Big corporations may lose their ability to use this unreasonable method of control over employees.

Those who object to Jimmy John’s non-compete agreement may want to sign a petition opposing the requirement for workers.

September 10, 2014

Congress Returns to Take More Money from Poor

The peace of Congress’s long summer vacation of Congress is over, and legislators have straggled back into Washington, D.C. (“don’t care,” according to Sen. Mitch McConnell’s (R-KY) opponent, Alison Grimes). Sen. Ted Cruz (R-TX) is highly incensed that his party supported a debate on overturning Citizens United. The vote was 79-18 to explore an amendment that would return the regulation of campaign funding to Congress. That’s 25 GOP senators who voted for debate. In his opposition, Cruz said that the measure would ban Saturday Night Live and throw Lorne Michaels into prison because of the program’s political satire. The bill, which has no connection to Cruz’s “reality,” is here.

Fights over government funding scheduled to begin tomorrow have been delayed because of President Obama’s speech and the rising issue about ISIL. It will have to be dealt with before the end of September, however, or the United States will face another government shutdown. As voters ponder on the wisdom of the GOP approach toward starving the United States, let us consider their history of profligate spending during the past few years:

  • $350,000: initial cost of suing the president for nothing with Baker Hostetler charging $500 per hour.
  • $1.3 million: 2011 delay in raising the debt ceiling causing the Conference Board’s Consumer Confidence index to plunge from 59.2 in July to 45.2 in August.
  • $3 million: cost for House to defend ban on marriage equality that the Supreme Court overturned last summer.
  • $24 billion: loss in the U.S. economy because of the GOP 2013 government shutdown which doesn’t include shaving 0.6 percent off fourth-quarter GDP growth. During the shutdown, approximately 800,000 federal employees were indefinitely furloughed and another 1.3 million were required to report to work without known payment dates.
  • $1.5 billion per day for 15 days of shutdown: furlough of approximately 800,000 federal employees and another 1.3 million required to report to work without known payment dates; loss in government services, travel spending, National Parks, federal and contractor wages, small businesses suffering from frozen government contracts and stalled business loans, tourism suffering from closed national parks, and military families coping without childcare and other services.
  • $2 million: almost non-stop investigations on the Benghazi attack since September 2012 requiring approximately 50 congressional hearings, briefings, and interviews with the State Department. 
  • $5.65 million: newest “special committee” to reinvestigate Benghazi—larger than budgets for the committees on Veteran’s affairs, Intelligence and the budget itself.
  • $14 million: investigation into the IRS that required over 600,000 pages of documents, “none of which substantiate the GOP’s wild attempt from the get-go to tar the administration,” according to Rep. Sander Levin (D-MI).

Grand Total:  $25,025,300,000

Debates over government funding will result in the GOP’s self-righteous objections to these so-called entitlements for the bottom 90 percent:

  • $220 billion: just over 4 million teachers–an average of $54,750 per teacher.
  • $246 billion: about $100 billion coming from state and local governments with the remainder provided by employee contributions and investment earnings—an average of $27,333 per pensioner.
  • $398 billion: non-medical safety net including SNAP (aka food stamps), WIC (Women, Infants, Children), Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, Education & Training, and Housing—an average of $8,600 per recipient because huge corporations refuse to pay a higher minimum wage.
  • $863 billion: Social Security. (The GOP fails to recognize that the average two-earner couple making average wages–$14,600–receives less throughout their lifetimes than they pay in.)

Then there are the entitlements for the wealthy that the GOP supports:

  • $2.2 trillion: tax expenditures, tax underpayments, tax havens, and corporate nonpayment with two thirds of the breaks going to the top 20 percent of taxpayers—an average of $200,000 per individual in the top 1 percent.
  • $5 trillion since 2009: investment income, with 95 percent—an average of $500,000—taking 95 percent of this amount.

Congressional members have an excellent reason to retain the entitlements for the wealthy: they are some of the entitled ones, helped greatly by the stock market boom. More than half the members of Congress (268) had an average net worth of $1 million or more in 2012, up from 257 members the year before. The actual number could be much greater, however, because lawmakers report their assets in sizable ranges. That’s compared to median household net worth in the United States of $56,300. The median net worth for all House members was $896,000 and, for Senators, $2.5 million. You can check out your Congressional members here.

Even without any additional income, members of Congress make over $83 per hour—if they actually worked a standard 40-hour week. That’s something to think about when they object to raising the minimum wage from $7.25 to $10.10.

Former Rep. Eric Cantor (R-VA), who lost his primary after out-spending his opponent 10-1 with $5 million, is no longer jobless. As vice chairman, managing director, and member of the board of directors at “boutique investment bank” Moelis & Co., he gets a base salary of $400,000 each year for two years plus $1.4 million in bonuses for this year and $1.6 million in incentive compensation next year, about ten times the $174,000 salary for being in the House. As Elizabeth Warren said, corporate sell-out politicians like Cantor “head straight out into the industry, not because they bring great expertise and insight, but because they’re selling access back in to their former colleagues who are still writing policy, who are still making laws.” As Jon Stewart quipped on The Daily Show, Cantor is being paid for services previously rendered.

Between 2009 and 2011—the so-called recovery—the mean net worth of households in the top 7 percent grew by 28 percent while the remaining 93 percent of households lost 4 percent. This trend continues the one for the last three decades. The following chart shows how much has been lost by the majority of people since Ronald Reagan and his conservatives shifted the economy of the United States.chart 2Workers at almost all percentiles down from the 95th saw wage declines since 2010. The only wages that went up was at the 10th percentile—an increase from $8.36 an hour to $8.38. Two pennies. That’s $.80 a week and $4.04 for the year. The extra two cents came from minimum wage increases in 13 states last year. When workers can’t afford to spend money for goods and services, businesses don’t make enough money to hire which increases unemployment. The middle class continues to shrink.

In just one state, North Carolina, CEOs in the biggest companies got a 14-percent pay increase last year, to $4.1 million. The raise means that the median CEO pay is 129 times higher than that for the workers, up from 113 times the year before. The media wage for all North Carolina workers increased 1 percent last year to$31,850. The highest CEO pay in North Carolina last year came at Lowe’s; Robert Niblock got $18.7 million, up 54 percent from the year before. Of the 50 largest publicly traded companies in North Carolina last year, two CEOs were women, two were nonwhite, and none were blacks. Nationwide, median pay for CEOs at S&P 500 companies increased 9 percent to $10.5 million.

“Why when American corporation profits have skyrocketed to over $1,800,000,000,000, why are they only investing 9% of all those profits in expansion, in wages, in research and development? Ninety-one percent goes to CEO salaries and to stockholders. What’s wrong with this picture, folks?”—Joe Biden

Free-loading corporations have joined the wealthy in obtaining government entitlements. Technically, the tax rate for corporations is 35 percent; in reality it’s much, much less. They now pay about ten percent of all taxes, compared to the 33 percent in the early 1950s. Their contribution is 1.6 percent of the GDP, drastically down from 5.9 percent in 1952.

Of the 288 companies in the Fortune 500 that registered consistent profit every year from 2008 to 2012, 26 of these companies paid no federal income tax from 2008 to 2012. Another 93 paid less than ten percent in taxes. The overall average was 19.4 percent over these five years. Tax subsidies for just these 288 companies were $364 billion during that time with $174 billion going to just 25 of the companies.  Overall, each family in the nation annually pays an average $6,000 subsidy to corporations that have doubled their profits and cut their taxes in half in ten years.

The country is divided into the “makers” and the “takers,” as Rep. Paul Ryan (R-WI) claims, but the takers are the wealthy and the corporations. And the GOP is headed back into session to take more from the workers, the “makers,” at the bottom who lose money every year.

July 26, 2014

The American Dream Is Almost Dead

Back in the 1950s, people believed in the American Dream. Tax rates for the wealthy were at 90 percent, veterans had good benefits, and strong unions had created a healthy middle class. By the 1960s, even the Republicans voted for civil rights, and the country moved forward. Fifty years later, the American Dream is most likely dead. Two-thirds of the people in the United States think that the next generation will not be better off that their own.

An article in USA Today has directed attention toward the disappearance of the dream in the wealthiest nation in the world. According to an analysis of living expenses in the nation, the price tag for the American Dream is $130,357 a year for a family of four. Only 16 million U.S. households earned that much in 2013, according to the U.S. Census Bureau. That means that only one out of 8 people in the U.S.—12 percent—achieve this goal.

The American Dream has always included owning a home. For a home that costs $275,000 (the median price) with 10 percent down and a 4-percent, 30-year mortgage, the family pays $17,062 a year. Groceries would run $12,659, and one car would cost $11,039. Those with other essentials take $58,491. The extras did include restaurant expenses, but only $70 per week—for four people. Taxes—federal, state, local, sales, and property—would run about 30 percent of the $130,000. The article also factored in $22,500 savings each year, $5,000 of that for the children’s college expenses.

Obviously, people could not save, spend less on entertainment and restaurants, and live in a cheaper house. But that’s not the American Dream, and that’s not the way that people lived in the 1950s. Also people live cheaper in places like Oklahoma City and Cleveland than in San Francisco and New York. To make an annual salary of $130,000, a person would require a $65 hourly wage, considered ridiculous. Yet the prices have gone up far faster than workers’ salaries.

With the median household income is $51,000, people are far below a living wage. Almost 50 million people in the country are below the poverty level, an almost 50 percent increase since George W. Bush became president.

Conservatives still promote the belief that people can achieve the American Dream if they just work hard enough. Studies show that they are wrong. A Johns Hopkins University study, documented in The Longest Shadow, followed almost 800 Baltimore schoolchildren for 25 years starting in the early 1980s. The poor stayed poor, and only four percent of urban disadvantaged youth graduated from a four-year college.

Karl Alexander, research professor of sociology at Johns Hopkins University, said that upward mobility is much more limited in the U.S. than in other industrialized countries. In the United States, where people live is as much an indicator of success as how much they work. For example, people are better off in California than in South Carolina. Kids born into the bottom 20 percent of households, for example, have a 12.9 percent chance of reaching the top 20 percent if they live in San Jose (CA) but only a 4.4 percent chance if they live in Charlotte (NC).

SocialMobility

Factors influencing the differences in upward mobility:

  • Race: The larger the black population, the lower the upward mobility. That holds true for all races living in areas that are predominantly black.
  • Segregation: The greater the isolation, the less chance people have to get to good jobs and good schools. The more sprawl, the less willingness on the part of higher-income people to invest in solutions such as public transit.
  • Social Capital: Living near the middle class also brings better institutions with a better safety net and services. For example, Utah’s vast Mormon culture creates better upward mobility.
  • Inequality: The bigger the gap between the poor and rich (as compared to the super rich) the less of a chance that upward mobility can occur.  It’s easier to jump up from the bottom if the top isn’t as far away.
  • Family Structure: Top on the reasons for upward mobility is families. Children have the best chance in stable, two-parent homes.  Notice the word “stable.” That contradicts the conservative theory that women should marry just anyone in order to improve their personal finances.

 

For the past half century, far-right conservatives have worked to destroy unions so that the top 1 percent can get richer. Membership has gone from 25 percent in the private workforce of the 1940s to the current 6.7 percent—and the rate is still moving down.

In two months, United Airlines, the continent’s third largest airline, will outsource 630 of its gate agent jobs at 12 airports to private companies. The union workers who are making up to $50,000, the median wage, will be replaced by non-union workers who will make between $9 and $12.50 per hour. These people will become part of the working poor, needing government aid such as food stamps and Medicaid to survive. The airline makes the money, and the taxpayers fill in the gaps.

 

The fast-food industry already takes in $243 billion every year from taxpayers because the companies refuse to pay living wages. Wal-Mart costs taxpayers between $900,000 and $1.75 million per store so that it can make $35,000 profit every minute.

 

Even without unions, there are ways to stop companies from ripping off taxpayers, increase the economy, and move people upward toward the American Dream.

 

Raise the minimum wage: Of the 13 states (Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington) that raised their minimum wage in January, only one, New Jersey, saw a decrease in employment during the first half of this year. The other 12 saw speedier job growth in the first half of 2014 compared to 2013 than states that didn’t raise their wages.

 

Take away corporate tax benefits and breaks from all corporations that have even one full-time employee qualifying for food stamps or Medicaid: Instead of punishing people who get paid a poverty wage, shame the companies that keep their workers in poverty.

 

As for unions, repealing the Taft-Hartley Act would allow workers to unionize and keep taxpayers from having to pay part of workers’ wages through food stamps and Medicaid.

 

 

A new type of union, micro-unions, is growing in popularity, and the National Labor Relations Board (NLRB) is recognizing their formations. The first one was created in 2011 at the rehabilitation center Specialty Healthcare where nursing assistants wanted to organize. This week, the NLRB recognized a small group of Macy’s employees, much to the dismay of industry groups. They claim that chaos will result if companies are forced to bargain with multiple unions at the same work site, but the reason is that employees are finding a way to unionize. Their objection is to what they call “gerrymandering,” a practice satisfactory to conservatives in private education and political voting units.

 

We’ll hear more about micro-unions. In April and June, bills have been introduced in Congress to block micro-unions. Sen. Lindsey Graham (R-SC) plans to introduce an amendment to the appropriations bill to stop them on the premise that they hurt the American worker. Graham represents the state with extremely low economic mobility. The 6th Circuit Court of Appeals has already upheld NLRB’s earlier ruling for micro-unions. It’s the next fight against re-creating the middle class in the United States.

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