Nel's New Day

September 2, 2013

Labor Day, A Rollercoaster

Today signifies the end of summer, return of kids to school, and the demise of the U.S. worker. Known as a federal day called Labor Day, it used to commemorate the contributions of workers to the strength, prosperity, and well-being of their country.

A year ago, GOP leaders co-opted this day to celebrate management and CEOs when House Majority Leader Eric Cantor (R-VA) tweeted, “Today, we celebrate those who have taken a risk, worked hard, built a business and earned their own success.” Rep. Paul Ryan (R-WI) and then-Vice Presidential candidate echoed the sentiment when he said that only small business owners are working hard to make “this country grow.”

The arrogance of the wealthy and the GOP created this myth. According to a new study, the ultra-wealthy have a greater sense of entitlement than the others, and the GOP pays attention only to this narcissistic population. Participants from a high social class are more likely to say “I honestly feel I’m just more deserving than others” whereas other are more likely to respond, “I do not necessarily deserve special treatment.” An earlier study shows that “upper-class individuals behave more unethically than lower-class individuals,” including being more likely to “display unethical decision-making,” steal, lie during a negotiation and cheat in order to win a contest. “

Upper-class individuals also “showed reduced sensitivity to others’ suffering” as compared to working- and middle-class people. Lower-class individuals are more likely to spend time taking care of others and are more embedded in social networks that depend on mutual aid. Another study shows that U.S. senators respond almost exclusively to the interests of their wealthiest constituents, those more likely to be unethical and less sensitive to the suffering of others. MIT economist Daron Acemoglu said that this pattern historically comes from widening economic disparities. As economic inequality increases, the more powerful use that power to become even more powerful, working to change rules in their favor.

In a backlash to this inequality last week, fast food workers protested their unreasonably low wages, demanding $15 per hour, equal to the request at the first March on Washington 50 years ago. With no healthcare insurance and costs rising, people cannot live on minimum wage without government assistance. Companies who pay below-subsistence wages are dragging the economy down and taking their wealth from the taxpayers. The company doesn’t pay for food stamps and the Medicaid that their workers need; the taxpayers do.

Corporations know that a faltering economy helps them hire cheap workers. High unemployment rates gives them a large pool of disposable workers. The companies’ profits soar, and they keep a bit of their profits to stop politicians from raising the minimum wage or lowering unemployment.

The thousands of fast-food workers who protested in 60 cities from coast to coast want not only the $15 per hour but also paid sick leave and the right to unionize the restaurant industry, the nation’s second-biggest employer which is predicting its 2013 profits will “reach a record high of $660.5 billion.” The federal minimum wage of $7.25 an hour was last raised in July 2009. A sub-category for tipped workers, which includes waiters, waitresses, bartenders, and busboys, was last raised by Congress in 1991 and is $2.13 an hour. Raising the price of a Big Mac at McDonalds would pay for half the money needed to raise the minimum wage for workers to $10.10. Even increasing the federal minimum to $9.80 over three years would give increase workers wages by 33 percent and more than double the wages of tipped workers.

Last June the wealthy NRA (National Restaurant Association) blocked 27 out of 29 states from increasing minimum wages and prevented a dozen states from passing laws to require paid sick leave. Even in two states raising minimum wage, New York and Connecticut, the NRA blocked or delayed raising the tip wage. They also kept local governments in six states from requiring paid sick leave. The NRA spent almost $1 million) to defeat a mandatory sick leave measure in Denver in 2011.

Workers in Washington, D.C. are waiting to see if its mayor Vincent Gray will sign a bill to require big box stores, in this case Wal-Mart, to pay at least $12 an hour, including benefits. He may veto the bill after Wal-Mart threatened to close stores and not expand in poorer neighborhoods. Washington passed local sick leave legislation in 2008, but the NRA made sure that it didn’t apply to tipped workers.

Both New York City and Portland (OR) passed a sick leave law last spring. New Jersey will vote on a $1 mimimum wage increase this fall, and organizers in Massachusetts plan a petition drive for the 2014 ballot to raise their state minimum wage and to require paid sick leave.

Most of the workers who would benefit from $15 per hour have families to support; the media age for fast food workers is 28. Women account for two-thirds of the industry; their average age is 32. At Wal-Mart, the median age is 30, and workers bring in half the family’s income.

Most low-wage workers are employed by companies with profits higher than before the recession, particularly in the fast food industry that can handsomely reward CEOs. McDonalds’ Don Thompson got $13.8 million last year. Brands (Taco Bell, KFC, and Pizza Hut) gave $11.3 million to CEO David Novak. After Wal-Mart had sluggish growth and only 5 percent increase in sales, CEO Michael Duke got a raise–$20.7 million up from $18.1 million in 2011. The average daily salary of a fast food CEO is about $25,000, about 40 percent higher than the annual salary of each worker.

Businesses have said that they should have the option of whether to pay a minimum wage, and the Boston-based burrito chain Bolaco actually pays its employees more than the minimum wage. Entry-level workers receive between $9 and $11 an hour, most of them $10, and many of them advance into higher roles paying $17 or more. Regarding low wages at companies like McDonalds and Burger King, Boloco CEO John Pepper said, “It’s a lot easier to keep wages down than it is to find better practices, bolder practices, more efficient practices, which come through training.”

The In-N-Out burger chain starts employees at $10.50 an hour, and workers at Dicks Drive-In in Seattle start at $10. Moo Cluck Moo, a burger chain in Detroit, pays its workers $12 an hour.

The people protesting the minimum wage have jobs, but the unemployment rate is still 7.4 percent as of July. Rep. Steve King (R-IA), probably on his way to being presidential candidate through Charleston (SC) a week ago, accused the unemployed of not trying to get work and compared them to children who won’t do their chores at home.

The truth is that there are three people looking for each job opening in the United States. The recession made long-term unemployment more common than any other downturn in many decades, and being unemployed for nine months has the same impact on the odds of getting hired as losing four full years of experience from a résumé.

This Labor Day does have good news.

  • A majority of people in the U.S. has favorable views of unions. A June poll showed that 51 percent are positive about unions, up ten percent from two years ago and the first time since January 2007 that a majority has felt this way.
  • Union membership in California increased by 110,000 members in 2012 although it fell 368,000 nationwide. Several other states with growing Latino populations also have growing union membership.
  • Some workers are standing up for decent wages and working conditions. Wal-Mart workers and warehouse workers went out on strike, port truckers in L.A. and Long Beach voted to unionize along with carwash workers in L.A. and New York and taxi drivers in New York, and Hawaii enacted a domestic worker “Bill of Rights” possibly followed by California. And fast food workers are striking.
  • For the first time since President Obama was elected, the National Labor Relations Board (NLRB) has a full complement of five members. Despite court restraints, the board remains an important source for workers whose rights have been violated by their employers.
  • The AFL-CIO and its affiliates are holding an “open convention” next week, showing its inclusion of domestic workers, carwash workers, Wal-Mart workers, fast food workers and others. They have also formed alliances with the NAACP, National Council of La Raza, Sierra Club, religious organizations, and other groups that support basic justice for American workers. And they have played a key role in lobbying for federal legislation that benefits all workers–healthcare reform, equal pay legislation, immigration reform, an increase in the minimum wage and paid sick leave.

Despite the decades of stagnating wages and disappearing health and pension benefits, the return of the unions might give hope for future Labor Days—and the economy.

November 20, 2012

Boycott Walmart This Weekend

Filed under: Uncategorized — trp2011 @ 9:02 PM
Tags: , , , ,

Thanksgiving Day is just a few days away, complete with the variety of emotional responses that it brings every year. Some people are depressed because they have lost loved ones; others try to figure out how they can eat non-stop. I have a wonderful vegan friend who mourns the turkey holocaust at Thanksgiving.

To many people, however, Thanksgiving means a shopping glut. Black Friday, named for the day that takes businesses out of the red, has now moved into Thursday, as early as 8:00 am that day for some retailers. This year, however, it might mean a continuing strike for thousands of Walmart employees who are fed up with low wages, erratic hours, lack of health benefits, and disrespect in the workplace while the multi-billionaire Walton Family enjoys tax breaks and praise for “job creation.”

Walmart workers in factories and warehouses and retail stores plan a massive walkout on Friday, November 23, hoping to affect at least 1000 retail stores.   Beginning with just 70 people walking out, protests earlier this fall from Florida to California showcased the mistreatment of the majority of the over 2 million Walmart workers in more than 5000 stores across the nation. Demonstrators are asking for better wages, stable and improved working conditions, and less retaliation from management when speaking out. Not only are wages stagnant, but Walmart often refuses to honor overtime pay. With its massive presence in the country’s retail world, Walmart comprises 2 percent of the U.S. GDP.

Shoppers looking for the cheap prices at these stores are unaware of how much the Walton family costs them personally: employees in each store receive an annual average of $420,000 for food stamps and other taxpayer help just to survive. That’s $2.66 billion a year that Walmart costs the taxpayers, not counting the hundreds of millions of dollars in payroll tax deductions for federal, state, and local taxes because of the low wages. Walmart’s low wages cost taxpayers $1.02 billion a year in healthcare costs because of the low wages; they cost taxpayers at least $225 million in free and reduced-price school lunches for children.

Walmart CEO Michael Duke’s $18.1 million compensation makes him the second highest paid executive in the Fortune 500.  The protesters are asking for a minimum hourly wage of $13, more full time positions, and affordable health care. Currently the average employee gets $22,100 a year, just below the federal poverty level for a family of four ($23,050). The increase would take them up to $27,000, less than 18 percent above poverty level. The raise that they want would still keep them at a level allowing them to get Medicaid in many states.

In the coming year, Walmart employees’ portion of health care premiums is expected to go up to 36 percent, yet they will have  no increase in wages. Although Walmart indicated that the increase would be only 4.4 percent, the company plans to increase the cost of high-premium plans. Deductible for the health plans is $1,750 before employees receive the 80 percent for doctor visits, test, and some other services. Making $10 per hour, employees work 175 hours for that deductible, an entire month’s salary each year if they are lucky enough to work full time.

Prevented from unionizing, Walmart employees have formed grassroots coalitions such as Making Change at Walmart and Organization United for Respect at Walmart (OUR Walmart).  But even joining these has caused some employees to be fired or had their hours drastically reduced.

Walmart Stores has filed an unfair labor practice charge against the United Food and Commercial Workers International Union, asking the National Labor Relations Board to halt what the retailer says are unlawful efforts to disrupt its business. “Walmart is grasping at straws,” said the union’s communications director, Jill Cashen. “There’s nothing in the law that gives an employer the right to silence workers and citizens.”

In the meantime, Walmart is working hard to minimize the protests. David Tovar called the protests just “a few people” speaking out. “It’s smoke and mirrors,” said Tovar. “The vast majority of our associates like working at Walmart.” [Below are some of Tovar’s “few people.”]

CNN anchor Carol Costella not only questioned why Walmart refused to negotiate with worker but also asked Tovar, “Is it Walmart’s responsibility to make sure that its employees can support a strong middle-class lifestyle?” Tovar answered, “We’re working hard every day to provide more opportunities for associates.” His answer didn’t explain how full-time Walmart workers can have a comfortable life on $15,000 a year, but Tovar said that their employees get a 10 percent discount card.

Although Walmart has not had a strike in its 50-year history, threats at 700 stores a few years ago led to better conditions. High-level leadership say that they are not concerned, but they have released a seven-page memo telling how to handle the situation in very benign but covertly-threatening language. Allegations include harassment, cut hours, and other discipline when workers joined a protest group.

A new study, Retail’s Hidden Potential: How Raising Wages Would Benefit Workers, finds that increasing wages to $25,000 a year for a full-time worker would raise prices by no more than 1 percent and perhaps not at all. Such an action would lift 1.5 million retail workers out of poverty or near-poverty, create 100,000 or more jobs, and generate over $4 billion in additional retail sales. It could be its own stimulus. The study also notes that major retailers spend billions more on repurchasing their own stock than it would cost them to implement the proposed wage floor. A wage increase would pay Walmart dividends in terms of greater consumer demand, increased productivity, and better worker retention.

Owners of Walmart, the Waltons, are the wealthiest family in the United States. They have amassed a fortune equivalent to that of the bottom 41.5 percent of the country in 2010, nearly 49.5 million families. That percentage is up 10 percent from 30.5 percentage just three years earlier. Six members of the Walton family appear on the Forbes 400 list of the wealthiest Americans with a collective value of $102.7 billion.

No. 6:   Christy Walton (widow of John Walton), $25.3 billion

No. 9:   Jim Walton, $23.7 billion

No. 10: Alice Walton, $23.3 billion

No. 11:  S. Robson Walton, oldest son of Sam Walton, $23.1 billion

No. 103: Ann Walton Kroenke, $3.9 billion

No. 139: Nancy Walton Laurie, $3.4 billion

A common contrast to Walmart is Costco, a business that pays its workers at least 50 percent more than Walmart does. Higher wages for workers benefit everyone in the country. A 2011 study by the Chicago Federal Reserve Bank found that consumer spending increases $2,800 a year for for every dollar increase to that worker’s wages. Another study in 2009 that examined minimum wage showed  that raising the minimum wage to $9.50 per hour would increase $30 billion in spending during just one year.

Higher wages also decrease employee turnover and improve productivity. Costco has less than half the employee turnover rate of Walmart, the lowest employee theft figures in the industry, and greater productivity among its employees. One of the most successful businessmen in the 20th century understood this principal. In 1914, a time of deep recession, Henry Ford doubled his employees’ hourly wages. He said, “If you cut wages, you just cut the number of your own customers. If an employer does not share prosperity with those who make him prosperous, then pretty soon there will be no prosperity to share. That is why we think it is good business always to raise wages and never to lower them. We like to have plenty of customers.”

The growth of Walmart has played a large part in shrinking the middle class in the United States and destroyed large numbers of small businesses, particularly in small towns. I can identify at least 32 businesses that disappeared after Walmart invaded my small town almost 20 years go. Politicians have inundated the airwaves with the term “small business” for the past election cycle while refusing to admit that the middle class, the foundation for a solid economy, comes from wages. Walmart workers, and others like them, can’t afford to purchase what their employees sell.

I wish the Walmart workers good fortune in their courageous endeavors and hope you will join me in not shopping at Walmart this Thanksgiving weekend.

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