Corporate socialism: suckling billions in profits from the government teat

More proof that multi-billion dollar corporations like McDonald’s are quite successfully bilking the American taxpayer to increase their own take-home profits:

Video: McDonald’s tells workers to get food stamps – Salon.com — An audio recording released by labor activists Wednesday afternoon captures a staffer for McDonald’s’ “McResources Line” instructing a McDonald’s worker how to apply for public assistance.

The audio – excerpted in the campaign video below – records a conversation between Chicago worker Nancy Salgado, a ten-year employee currently making the Illinois state minimum wage of $8.25, and a counselor staffing the company’s “McResources” 1-800 number for McDonald’s workers. The McResources staffer offers her a number to “ask about things like food pantries” and tells her she “would most likely be eligible for SNAP benefits” which she explains are “food stamps.” After Salgado asks about “the doctor,” the staffer asks, “Did you try to get on Medicaid?” She notes it’s “health coverage for low income or no income adults and children.”

“It was really, really upsetting,” Salgado told Salon Wednesday, “knowing that McDonald’s knows that they don’t pay us enough, and we have to rely on this.” Noting that McDonald’s was “a billionaire company,” she asked, “how can they not afford to pay us?”

Of course McDonald’s (and other fast-food / big box retail corporations) could afford to pay their employees better wages and stop draining so much out of the taxpayer-funded safety net, but that would mean the corporate big wigs would have to share or reinvest some of their profits.

The new video follows two reports released last week… which estimated that fast food workers utilize nearly $7 billion annually in public assistance, while fast food corporations last year netted $7.4 billion profits.

And, by the way, many of these companies (and their executives) don’t contribute as much to the safety net as, proportionally speaking, the average middle-class taxpayer. As Scott Klinger recently noted:

In the 1950s, corporations paid nearly a third of the federal government’s bills. Last year… corporate income taxes accounted for less than a tenth of Uncle Sam’s total revenue.

Over the past year, one in nine of the companies listed on the S&P 500 paid an effective tax rate of zero percent–that’s zero as in nothing–and that’s on top of taxpayers picking up the tab on public assistance for those profitable corporations who won’t pay their workers a living wage.

There are 57 separate companies listed on the index that paid a zero percent rate from the past year. Those companies include both household names like Verizon and News Corp. and lesser-known corporate giants like the data storage manufacturer Seagate (market value $15.9 billion) and Public Storage (market value $29.5 billion). Many of the companies USA Today identified in its analysis as paying negative rates make the list because they lost money, but several were profitable. Previous analyses have shown that the typical corporation pays a lower effective tax rate than most middle-class families, and a far lower one than the statutory corporate tax rate against which business interests disingenuously rail.

Even though Mitt Romney tried to convince us that “corporations are people, my friend,” the majority of corporations today are not our “neighbors,” they don’t contribute towards the greater good of whichever country they’ve parked a headquarters—in fact, today’s corporations (and their executives) actually seem to do whatever is necessary to get out of contributing their proportional share towards the society which benefits them so greatly. Today’s corporations are run by people who are low on talent and basic morality, but are paid enormous sums of money. And they are nothing like those who came before them. Vanity Fair remembers,

In 1914, [Henry] Ford decided to pay his employees a rich wage and otherwise improve the working conditions…

In January 1914, (Henry Ford) startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn’t automatically apply to every worker, it more than doubled the average autoworker’s wage. While Henry’s primary objective was to reduce worker attrition—labor turnover from monotonous assembly line work was high—newspapers from all over the world reported the story as an extraordinary gesture of goodwill.

After Ford’s announcement, thousands of prospective workers showed up at the Ford Motor Company employment office. People surged toward Detroit from the American South and the nations of Europe. As expected, employee turnover diminished. And, by creating an eight-hour day, Ford could run three shifts instead of two, increasing productivity.

Henry Ford had reasoned that since it was now possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class. In the process, Henry Ford had changed manufacturing forever.

Or, as Henry put it, raising wages “has the same effect as throwing a stone in a still pond,” creating an “ever-widening circle of buying” that increases the prosperity of a nation.

It’s simply a fact that Henry Ford didn’t base his decisions on what Ford Motor Company’s net profits would be the next quarter–he had much greater things to accomplish. Because of Henry’s decisions, an entire nation benefited for years, and you know what? So did his company. Unfortunately those times are over (Reaganomics was the beginning of The End), Henry Ford would be run out of most corporate boardrooms today, and the word Patriotism now holds some twisted meaning that includes offshore bank accounts for the wealthy and easy access to guns for the rest of us. There is no longer a balance or any kind of mutual respect between industrialists and workers—negotiated, contrived, or otherwise. And each one of us ought to ask ourselves, “how did we allow this to happen?” and more importantly, “how can we change it?

Here’s Bill Maher from last week:

“Now when it comes to raising the minimum wage, conservatives always say it’s a non-starter because it cuts into profits. Well… yeah. Of course. Paying workers is one of those unfortunate expenses of running a business. You know, like taxes or making a product. If you want to get rich with a tax-free enterprise that sells nothing, start a church.” 

“…And, look, even if you’re not moved by the Don’t-Be-Such-a-Heartless-Prick argument, consider the fact that most fast food workers (whose average age, by the way, now is 29–I’m not talking about kids) are on some form of public assistance. Which is not surprising… when even working people can’t make enough to live, they take money from the government in the form of food stamps, school lunches, housing assistance, daycare. This is the welfare that conservatives hate but they never stop to think: if we raise the minimum wage and force McDonald’s and Walmart to pay their employees enough to eat, we the taxpayers wouldn’t have to pick up the slack. This is the question the Right has to answer: do you want smaller government with less handouts or do you want a low minimum wage–because you cannot have both. If Col. Sanders isn’t going to pay the lady behind the counter enough to live on, then Uncle Sam has to. And I for one am getting a little tired of helping highly profitable companies pay their workers.” 

Chicago fast-food and retail workers go on strike to raise minimum wage to $15.00

Chicago fast-food and retail workers begin mass walkout  — Hundreds of fast food and retail employees in Chicago began a mass walkout Wednesday morning, calling for the city’s minimum wage to be raised to $15 an hour. WLS-TV reported that the protest, organized by the Workers Organizing Committee of Chicago (WOCC), included employees from national store chains ranging from McDonald’s to Sears to Victoria’s Secret, most of whom currently make $8.25 an hour, a wage that WOCC members said forces workers to use social service programs like RentAid to make ends meet. “We need wages that we can survive on and support our families,” said committee member Lorraine Sanchez. “These are poverty wages and homelessness wages, and our workers are working two or three jobs, supporting families.”

NBC Chicago — The Workers Organizing Committee of Chicago campaign says many of the 275,000 men and women working in Chicago’s fast food and retail outlets can’t afford things like food, clothing and rent on the minimum $8.25 an hour that most of them make. Some say they rely on public assistance for health care for their children while others say bills are piling up. [...] The group says their companies make more than $4 billion a year on Chicago’s Magnificent Mile and in the Loop yet workers’ wages remain too low to live in the city.

Chicago Tribune — A study last year by the National Employment Law Project, an advocacy group, found that most of the jobs gained since the early 2010 — 58 percent — paid $12 an hour or less. It also found that the workers earning $14 to just over $21 per hour suffered the biggest losses during the recession and that hiring at that pay grade has lagged during the recovery.

But those six- and seven-figure executive bonuses keep growing every year! 

———————————————————————————————————

Blake Fall-Conroy, “Minimum Wage Machine,” 2008-2010 (via andrewfishman) — This machine allows anyone to work for minimum wage for as long as they like. Turning the crank on the side releases one penny every 4.97 seconds, for a total of $7.25 per hour. This corresponds to minimum wage for a person in New York. This piece is brilliant on multiple levels, particularly as social commentary. Without a doubt, most people who started operating the machine for fun would quickly grow disheartened and stop when realizing just how little they’re earning by turning this mindless crank. A person would then conceivably realize that this is what nearly two million people in the United States do every day at much harder jobs than turning a crank. This turns the piece into a simple, yet effective argument for raising the minimum wage.

Right to work laws give you the “right to work” for less money

Why are Michigan Democrats opposed to right to work laws being contemplated by Gov. Rick Synder? “Workers are currently not required to join a union — …they simply wanted to preserve the right of unions to collect fees from non-members to pay for wage and benefit negotiations that actually benefit them.”

Michigan prepares for mass protests today against right-to-work legislation: Union leaders in Michigan have been training members in “peaceful civil disobedience” methods in preparation for a protest on Tuesday against controversial right-to-work legislation. Supporters of the law, which among other measures would prohibit unions from collecting fees from non-union workers, are also expected to demonstrate at the state capitol in Lansing. The Republican-dominated Michigan Senate voted the right-to-work bill on Thursday by 22 votes to 16. Governor Rick Synder has said he will sign the bill into law and could do so on Tuesday.

Laura Clawson reports on Obama’s appearance in Detroit yesterday:

Speaking in Detroit Monday afternoon, President Barack Obama strongly criticized the push by Michigan Republicans to pass an anti-union law during the lame duck session. In a speech largely focused on his proposal to tax income over $250,000 and making the case that “our economic success has never come from the top down, it comes from the middle out and the bottom up,” Obama characterized the bill being rushed through the Michigan legislature as political and part of a race to the bottom:

And by the way, what we shouldn’t do. I’ve just got to say this, what we shouldn’t be doing is trying to take away your rights to bargain for better wages and working conditions. These so-called right to work laws, they don’t have to do with economics, they have everything to do with politics. What they’re really talking about is giving you the right to work for less money.

You only have to look to Michigan, where workers were instrumental in reviving the auto industry, to see how unions have helped build not just a stronger middle class but a stronger America. [...]

We don’t want a race to the bottom. We want a race to the top. America’s not going to compete based on low skill, low wage, no workers rights. That’s not our competitive advantage. There’s always going to be some other country that can treat its workers worse.

That appears to be just what Michigan Republicans do want, however. After hearing from his state’s congressional Democrats, Gov. Rick Snyder once again insisted that the bill “is all about creating more and better jobs in Michigan.” In fact, we know that freeloader laws lower wages by about $1,500 a year for the average worker—the “right to work for less money” that President Obama referred to. 

The Waltons have created lots of jobs — but are they jobs YOU’d want to try to support your family with? How many of us want an American economy based almost exclusively on minimum-wage, no benefits “Mcjobs” — or a future for our children where, if you’re not born into wealth, those kinds of jobs are the only aspiration?

Darden Restaurants promises to keep prices low — by screwing over its employees

The company that owns Red Lobster and Olive Garden is feeling the effects of its well-publicized tantrum plan to not provide its employees — who get paid very low wages — with health insurance coverage. Of course we can expect that Darden’s owners / upper management will continue to receive outlandish salaries and bonuses, because that’s how American capitalism works.  But that has nothing to do with anything… right?

How not to succeed in business: Promise to dodge Obamacare mandates — Darden began testing a plan under which it would hire more part-time employees in October, who would work fewer than 40 hours a week. That would exempt the company from the health law’s mandate to provide health insurance coverage to all full-time workers. Separate research from YouGov suggests that other restaurant chains that have recently criticized the Affordable Care Act have seen their favorability dip shortly thereafter… As much as Americans have negative opinions about the larger health-care system, they also tend to have pretty positive views of their own health insurance. Politifact has sifted through this data before, and found that polls that ask Americans whether they’re satisfied with their health-care plan can find upwards of 80 percent of respondents agreeing with them.

NEW YORK (MarketWatch) — Darden Restaurants Inc. shares fell 9% in premarket trades on Tuesday after it said it expects adjusted second-quarter profit of 25 to 26 cents a share. The Orlando, Fla., operator of Olive Garden and Red Lobster eateries was expected to earn 46 cents a share, according to a survey by FactSet.

American business gets what it pays for

“So what you really want to ask is why American businesses don’t feel that it’s worth their while to pay enough to attract the workers they say they need.” — Paul Krugman (via azspot)


image: questionall

They have no hesitation about paying themselves top wages though.

Welfare Queen Business Model: Walmart is ‘the largest recipient of public aid in the country’

No wonder the Walton family’s personal wealth is equal to the combined wealth of 40% of American families. Walmart is the anti-American dream… it’s the American nightmare. Why would any American shop at Walmart?

“Representative-elect Alan Grayson (D-FL) said Monday that he will put mega-retailer Walmart squarely in his sights during the next Congress for the company’s liberal use of public assistance programs to supplement their workers’ wages… Grayson called Walmart “the largest recipient of public aid in the country,” saying their low wages force workers to take food stamps, housing assistance and Medicaid just to get by.

“The taxpayer pays for the earned income credit,” he said. “The taxpayer pays for Medicaid. The taxpayer pays for unemployment insurance when they cut hours down. And the taxpayer pays for other forms of public assistance like food stamps. I think the taxpayer is getting fed up of paying these things when, in fact, Walmart could give every employee its got, even the CEO, a 30 percent raise and still be profitable.”

He added that while the health care mandate in the Affordable Care Act will help, “that’s just the start. In state after state after state, Walmart employees represent the largest group of Medicaid recipients, the largest group of food stamp recipients, and taxpayers shouldn’t have to bear that burden,” Grayson said. “It should be Walmart. So, we’re going to take that burden and put it where it belongs: on Walmart.”

Continue reading…

And this is a GREAT point: 

abaldwin360: It goes even further than this, those Walmart employees who make so little that they need to be on food stamps more than likely spend their food stamps at Walmart.

In fact, Walmart and other retailers make a killing off of food stamps.

Related: 

Costco and Walmart: a good American employer vs. a shitty American employer

Costco charges charges low prices, makes a ton of money & still treats its employees well.

For Costco, treating workers well has led to increased motivation, higher quality service, greater productivity and lower turnover. After the first year of employment, turnover was less than 6 percent, one of the lowest rates in the industry. The combination of good wages and the knowledge that there were opportunities for advancement was an important incentive for employees to work hard and build a career with the firm. The high quality of service provided by motivated, engaged employees at Costco, combined with the low prices, meant that customers returned and were willing to pay the membership fees. Costco’s high-quality service also attracted a clientele that shopped not only for basic goods but also luxury items, which were still more profitable, even with the low markup. As a result, Costco had higher annual sales per square foot than its most direct competitor, Wal-Mart’s Sam’s Club, ($795 versus $516), and higher annual profits per employee ($13,647 versus $11,039) even though Costco’s average wage was 42 percent higher. Over 16 years, Costco grew from 206 warehouses and $16 billion in sales to 554 warehouses and $69.9 billion in sales.

via: ericmortensen

One half of all jobs in the U.S. today now pay less than $35,000 a year

We were once a great country that proudly built things, exported goods, and earned a living wage—in large part because we had thriving labor unions. We also had a healthy public sector employment rate, which contributed to employment, the economy and America’s overall success. Over the past 30 years or more, we’ve been outsmarted with tax laws written to benefit the one percent, had our labor unions and government workers demonized by conservative ideology, and we were Bain Capitalized out of our manufacturing base—we were Bain Capitalized to death. The GOP and their wealthy benefactors have killed America’s middle class for nothing more than greed—and here we are today.

A report from NPRHow America’s Losing The War On Poverty:

According to a recent survey by The Associated Press, the number of Americans living at or below the poverty line will reach its highest point since President Johnson made his famous declaration of war on poverty in 1964.

Close to 16 percent of Americans now live at or below the poverty line. For a family of four, that’s $23,000 a year. On top of that, 100 million of us — 1 out of 3 Americans — manage to survive on a household income barely twice that amount. How is this poverty crisis happening?

[...] One half of all jobs in the U.S. today now pay less than $35,000 a year. Adjusted for inflation, that’s one of the lowest rates for American workers in five decades.

There’s a common perception that somebody who’s poor or living below the poverty level is lazy or simply living off government handouts. Edelman says the actual average poor person is working.

[...] Many economists say that when the economy does recover, a lot of the jobs that were lost won’t be coming back. That suggests the possibility of significantly high unemployment for a long time — maybe even a permanently large class of Americans who live in poverty. Blackwell says we can act to prevent that future. “And it’s not rocket science.”

“We know now that by 2018, 45 percent of all jobs in this nation will require at least an associate’s degree,” she says. “We could invest in the system of training — particularly focusing on community colleges and preparing people to go to four-year institutions and improving our high school education.”

“We actually have extraordinary infrastructure in this country, from the manufacturing base we once had,” she continues. “We need to retool it, we need to refit it, we need to make sure that it’s ready for the kind of advanced manufacturing that we’re seeing develop in other countries.”

What we don’t need is to be “Bain Capitalized” further — or more of those “great” ideas like outsourcing work that can be done locally in the public sector. To let Republicans find more ways to cut spending, more austerity cuts for 99% of us—just to give the wealthiest even more tax breaks—costs our society, and our people, in too many ways to count.


The Walton’s wealth equals the bottom 40% of Americans: how the rich amass fortunes

According to Pat Garofalo at Think Progress, Walmart heirs have a combined wealth equal to the bottom 40% of Americans combined:

“Last year, Sylvia Allegretto, a labor economist at the Center on Wage and Employment Dynamics, found that as of 2007, the Walton family — heirs to the Walmart fortune — had a net worth equal to that of the bottom 30 percent of Americans. And due to the effects of the Great Recession that ratio has gotten substantially worse. New Federal Reserve data analyzed by both Allegretto and Josn Bivens at the Economic Policy Institute shows that the Waltons now hold as much wealth as the bottom 40 percent of Americans combined.”

So? Didn’t they ‘earn’ their wealth — should we punish the Walton family for being this wildly successful? As Garofalo points out, the federal government (i.e. the Republican Party / tax laws) have helped to redistribute money towards the Walton fortune as much as anything:

“At the same time that the Waltons have amassed an ever larger fortune, Congress decided to cut the estate tax, a policy for which the Waltons have been pushingfor years. And now that the estate tax cut is in place, conservatives are doing everything they can to ensure it doesn’t go away, allowing the Waltons to amass even larger amounts of wealth.”

And as president, Mitt Romney would like to redistribute even more money to the Waltons by implementing further tax cuts for those in the elite one percent class (himself included).

Further, let’s not forget that the Walton family fortune has been built on the backs of their low-wage employees:

“[Walmart] employees on average take home pay of under $250 a week. The salary for full-time employees (called “associates”) is $6 to $7.50 an hour for 28-40 hours a week, which is typical in the discount retail industry. This pay scale places employees with families below the poverty line, with the majority of employees’ children qualifying for free lunch at school. When closely examined, this amounts to a form of corporate welfare, as the taxpayer subsidizes the low salaries. One-third are part-time employees – limited to less than 28 hours of work per week – and are not eligible for benefits.”

So every taxpayer, in any community where a Walmart is located, has helped to subsidize the Walton family’s employees — and by extension, the Walton family fortune.  Instead of expecting them to pay their workers a living wage and provide affordable benefits (remember labor unions?), taxpayers have helped the Waltons pocket a selfishly unequal amount of their profits. Profits, by the way, which are created by selling goods from other countries, like China:

“Despite a well-publicized “Made in the U.S.A.” campaign, 85 percent of the stores’ items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart’s “Buy American” ad campaign was in full swing did the company become the country’s largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business.”

The Walton family is a basic story of how many in the elite one percent acquire their fortunes (ingenuity and hard work or by cheating with a lot of help from others including all levels of government). It’s this kind of information, ultimately, that people like Mitt Romney would like to withhold from public scrutiny. One doesn’t willingly reveal how one’s fortune was made, where it came from, who was sacrificed, and how it’s being used now by turning over one’s tax returns to the rabble. That could turn out to be rather distasteful.

In 30 years CEO pay grew 127 times faster than worker pay: do Americans want more inequality?

ThinkProgress: According to an analysis by the pay research group Equilar, compensation for top bank CEOs grew by nearly 12 percent last year. The Financial Times noted that    these increases occurred “despite widespread falls in profits and share prices“ [...] According to a different estimate by Bloomberg News, Wall Street CEO pay grew by 20 percent last year. At the same time, worker wages grew by only 2.1 percent. And inflation adjusted wages actually declined by 0.6 percent between March 2011 and March 2012. [...] Over the last 30 years, CEO pay has increased 127 times faster than worker pay. 

That time frame for unequal growth in CEO / worker pay coincides with the time period that Mitt Romney and Bain Capital (and companies like theirs) began their siege on outsourcing (offshoring!) American jobs. That’s quite a coincidence, isn’t it?

What’s sad about these facts is that low-information voters are completely missing the point: according to a Pew poll, Americans currently give Romney an 8-point lead over Obama on who they trust to handle the economy better. Seriously.

Profit for a few at the expense of many — do these people understand they’re saying that’s exactly the kind of economy they approve of with Mitt Romney?

When Republicans destroy the middle class…

Union workers and everyone’s wages and benefits


image: christopherstreet

Read more about The Republican Strategy 

“Somehow, firing people with jobs became the Republican strategy for job creation…”

“Somehow, firing people with jobs became the Republican strategy for job creation. People who taught our children; policed our streets; picked up our garbage; put out our fires; built and maintained our parks, libraries, and roads for a living wage became the scapegoat for the impoverishment the private sector imposed on workers. Instead of organizing to win back their own living wages and lost benefits, people were convinced that taking away those of government workers would somehow make them better off. Divide and conquer politics. The politics of fear, hate, greed, envy and spite. The race to the bottom. Orchestrated by plutocrats, executed by conservatives, allowed by Democrats.” — John Atcheson

via: christopherstreet

Two graphics that explain EVERYTHING: the Republican War on the 99%

Click for larger:

icaruscalling:

Okay, I found the source for this map. It’s from here. That’s it in PDF. This is the page about the 2012 report from the National Low Income Housing Coalition, and here is the full report in PDF (in just under 250 pages).

Some 2011 information.

Why are all the twenty-somethings living back home again? THIS. And remember — according to the GOP, our problems will all be solved when we can get some more tax cuts to the one percent — and maybe LOWER the minimum wage to help out the corporations and employers create jobs?!

Combine the graphic above with this little factoid:

Source: thinkprogress.org

Let the eagle soar! 

Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages

After the longest recession since WWII, many Americans are still struggling while S&P 500 corporations are sitting on $800 billion in cash and making massive profits. Now, economists from Northeastern University have released a study that finds our sluggish economic recovery has almost solely benefited corporations.

[...] So as average wages fall, and nearly 14 million people remain unemployed, America’s economic recovery has almost entirely benefited corporations. This development adds another chapter to the decline of the middle class, whose incomes are shrinking and wages are stagnating. Last year, top executives’ salaries increased 27 percent, while workers’ salaries increased only 2 percent. At the moment, income inequality in America is the worst it’s been since the 1920s, as the richest 1 percent make nearly 25 percent of the country’s income.