Tag Labor

Frozen Assets

The New York Times included a special “Wealth” section for the 1% in today’s print edition, including articles such as:

  • Parceling Out a Nest Egg, Without Emptying It (raising the issue of how much of the $5.12 million exemption on gift taxes can you exploit on your nest egg of $10 million but less than $40m; “nice calculations to have to make, but that does not make them any less stressful for the people making them.”);
  • A Guiding Hand for Bequests, Beyond the Grave (discussing how one might, for example, satisfy both a second spouse and children from a previous marriage with a “QTIP” — qualified terminable interest property trust);
  • Courting the Next Generation of the Rich (discussing the “exploding” popularity of “programs for the next generation of wealth holders” on topics such as financial literacy, prenuptial agreements and managing family dynamics).

Diego Rivera
Frozen Assets (1931)
Fresco on reinforced cement in a galvanized-steel framework
94 1/8 x 74 3/16″ (239 x 188.5 cm)

NYT: The Rich Get Even Richer

The New York Times printed an op-ed today by a “longtime Wall Street executive” drawning on work by French economists Thomas Piketty and Emmanuel Saez analyzing U.S. tax returns:

NEW statistics show an ever-more-startling divergence between the fortunes of the wealthy and everybody else — and the desperate need to address this wrenching problem. Even in a country that sometimes seems inured to income inequality, these takeaways are truly stunning.

In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income. That delivered an average single-year pay increase of 11.6 percent to each of these households.

Still more astonishing was the extent to which the super rich got rich faster than the merely rich. In 2010, 37 percent of these additional earnings went to just the top 0.01 percent, a teaspoon-size collection of about 15,000 households with average incomes of $23.8 million. These fortunate few saw their incomes rise by 21.5 percent.

The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent, whose average income is $1,019,089, had an 11.6 percent increase in income.

Steven Rattner, Op-Ed, The Rich Get Even Richer, N.Y. Times, Mar. 26, 2012, at A27.

And the Business section reported a few days earlier that, although “Americans have never been too worried about the income gap,” now “tolerance for a widening income gap may be ebbing.” Eduardo Porter, Inequality Undermines Democracy, N.Y. Times, Mar. 21, 2012, at B1. The article also notes that when “inequality becomes very acute, it breeds resentment and political instability, eroding the legitimacy of democratic institutions.” Indeed, as Gar Alperovitz has pointed out

repeated studies have shown the majority of Americans know full well that something challenging and fundamental is going on with “democracy”: Four out of five in a recent assessment judged that “[g]overnment leaders say and do anything to get elected, then do whatever they want.” Another study found that seven out of ten felt that “people like me have almost no say in the political system.”

Gar Alpervitz, American Beyond Capitalism 1 (2005) (arguing for democratization of the economic system through varying forms of ownership such as co-ops, worker-owned businesses, community land trusts, and other social enterprises).

Soaring Poverty Casts Spotlight on ‘Lost Decade’

Sabrina Tavernise, Poverty Rate Soars to Highest Level Since 1993, N.Y. Times, Sept. 14, 2011, at A1:

Another 2.6 million people slipped into poverty in the United States last year, the Census Bureau reported Tuesday, and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it.

… The past decade was also marked by a growing gap between the very top and very bottom of the income ladder. Median household income for the bottom tenth of the income spectrum fell by 12 percent from a peak in 1999, while the top 90th percentile dropped by just 1.5 percent. Overall, median household income adjusted for inflation declined by 2.3 percent in 2010 from the previous year, to $49,445. That was 7 percent less than the peak of $53,252 in 1999. Part of the income decline over time is because of the smaller size of the American family.

This year is not likely to be any better, economists said. Stimulus money has largely ended, and state and local governments have made deep cuts to staff and to budgets for social programs, both likely to move economically fragile families closer to poverty.

Minorities were hit hardest. Blacks experienced the highest poverty rate, at 27 percent, up from 25 percent in 2009, and Hispanics rose to 26 percent from 25 percent. For whites, 9.9 percent lived in poverty, up from 9.4 percent in 2009. Asians were unchanged at 12.1 percent.

And last month, PBS ran a strong piece as part of an occasional series on inequality in America:

Watch the full episode. See more PBS NewsHour.

Weathering the economy’s soft patch

Kate Linebaugh and James R. Hagerty, Business Abroad Drives U.S. Profits, Wall St. J., July 25, 2011, at B1:

While the U.S. economy is struggling, U.S. corporations aren’t. A third of the way through the second-quarter reporting season, earnings at companies in the Standard & Poor’s 500-stock index are the highest in four years, according to S&P analyst Howard Silverblatt, who predicts the second half will be even stronger. Yet there is little indication that the strong results will jump-start the U.S. economy and get the millions of Americans idled by the recession back to work…. Corporate profits — one of the few areas of strength in the limp U.S. recovery — appear to be weathering the economy’s soft patch.

According to a study by Northeastern University economists titled The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent.”

But “even as the economy limps along, more of the nation’s wealthier families are cutting out the car ride and chartering planes to fly to summer camps” according to Christine Haughney, To Reach Simple Life of Summer Camp, Lining Up for Private Jets, N.Y. Times, July 25, 2011, at A1:

Gov. Paul LePage of Maine happened to be waiting for his flight at Augusta State Airport on a recent Saturday when the weekend crush began.

A turboprop Pilatus PC-12 carrying Melissa Thomas, her daughter, her daughter’s friend and a pile of lacrosse equipment took off for their home in Connecticut, following the girls’ three-week stay at Camp All-Star in nearby Kents Hill, Me. Shortly after, a Cessna Citation Excel arrived, and a mother, a father and their 13-year-old daughter emerged carrying a pink sleeping bag and two large duffel bags, all headed to Camp Vega in Fayette.

“Love it, love it, love it,” Mr. LePage said of the private-plane traffic generated by summer camps. “I wish they’d stay a week while they’re here. This is a big business.”

More on LePage’s economic ideas here.

NYT: Executive Pay at Big Companies Rose 23% Last Year

Pradnya Joshi, We Knew They Got Raises. But This?, N.Y. Times, July 3, 2001, at BU3.

It turns out that the good times are even better than we thought for American chief executives.

… The final figures show that the median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009. The earlier study had put the median pay at a none-too-shabby $9.6 million, up 12 percent.

Total C.E.O. pay hasn’t quite returned to its heady, prerecession levels — but it certainly seems headed there. Despite the soft economy, weak home prices and persistently high unemployment, some top executives are already making more than they were before the economy soured.

… The preliminary and final studies put Philippe P. Dauman, the chief executive of Viacom, at the top of the list. Mr. Dauman made $84.5 million last year, after signing a new long-term contract that included one-time stock awards.

Leslie Moonves, of the CBS Corporation, got a 32 percent raise and reaped $56.9 million. Michael White of DirecTV was paid $32.9 million, while Brian L. Roberts of the Comcast Corporation and Robert A. Iger of the Walt Disney Company each received pay packages valued at $28 million.

Florida’s Genius Solution to Unemployment: Super-hero Capes

From the website of Workforce Central Florida.

Forget job retraining or back-to-school money or even another stimulus package. An employment center in central Florida has the answer to ending the Sunshine State’s chronic unemployment problem: Red super-hero capes.

Yes, that’s right. As WFTV Orlando reports, a new marketing initiative unveiled by an outfit called Workforce Central Florida (self-described as the “region’s workforce expert”) called the “Cape-ability Challenge” gives red capes to jobless Floridians as a way to boost their job-seeking prospects. The state-funded workforce organization reportedly spent $14,000 on 6,000 capes as part of the campaign, which a state workforce group called “insensitive and wasteful.” The capes fit in with Workforce Central Florida’s comic book-inspired campaign that features a villain named “Dr. Evil Unemployment.”

Now, the state is investigating Workforce Central Florida over the cape campaign. Hmm, wonder why. Here’s more from WFTV:

The newest allegation of misspending involves a marketing campaign, in which the chairman of the board for the job agency marches around in a super-hero cape.

[…]

Job-seekers such as Gregory Bryant said the capes are a waste of money and they’re offended by the cartoon-like portrayal of being unemployed.

“Would you wear this around?” WFTV reporter Bianca Castro asked Bryant.

“No, I mean, would you?” Bryant answered. “It’s a mockery to Americans.”

The bizarre campaign, however, didn’t last long. In a Wednesday press release, the group announced it was canning the cape idea, which it described as an “admittedly out-of-the-box creative campaign.”

(via Mother Jones)

NYT: Labor Board Says Boeing’s South Carolina Plant Breaks Law

Steven Greenhouse, Labor Board Tells Boeing New Factory Breaks Law, N.Y. Times, Apr. 21, 2011, at B1.

In its complaint, the labor board said that Boeing’s decision to transfer a second production line for its new 787 Dreamliner passenger plane to South Carolina was motivated by an unlawful desire to retaliate against union workers for their past strikes in Washington and to discourage future strikes. The agency’s acting general counsel, Lafe Solomon, said it was illegal for companies to take actions in retaliation against workers for exercising the right to strike.

Although manufacturers have long moved plants to nonunion states, the board noted that Boeing officials had, in internal documents and news interviews, specifically cited the strikes and potential future strikes as a reason for their 2009 decision to expand in South Carolina.

Study: Increasing Wages at Wal-Mart Would Barely Affect Shoppers

Wal-Mart is the largest private-sector employer in the United States. It employs more than 1.4 million workers here, but pays them an estimated 12 percent less than average retail workers in the country. Many argue that, while unfortunate, such low wages help poor families since by allowing them to purchase goods cheaply.

That argument was most famously articulated by the current National Economic Council Deputy Director, who before she joined the White House published a paper in 2005 titled “Wal-Mart A Progressive Success Story.” It argued that Wal-Mart could not raise wages without raising prices, which would hurt poor and low income communities

However a study released on Monday by University of California, Berkeley’s Center for Labor Research and Education found that increasing wages to $12 per hour would cost Wal-Mart $3.2 billion if applied to all workers across the United States. That amounts to about 1 percent of the company’s annual sales of $305 billion. Even if Wal-Mart were to pass on the total cost of the wage increase to consumers, researchers estimate that shoppers would pay about $12.50 more per year – or 46 cents per shopping trip – to cover the cost of the pay raise for Wal-Mart workers.

(via In These Times)

YouTube: Walker Admits No Fiscal Benefit to Anti-Union Provision

Rep. Dennis Kucinich: “Can you please explain to me and members of this committee how much money this provision saves for your state budget?”

Gov. Scott Walker: “That and a number of other provisions we put in because if you’re going to ask, if you’re going to put in place a change like that, we wanted to make sure we protected the workers of our state, so they got value out of that.”

Rep. Dennis Kucinich: “Would you answer the question? How much money does it save, Governor?”

Gov. Scott Walker: “It doesn’t save any.”

Mural of Maine’s Workers Becomes Political Target

Panels 7-9: The 1937 Strike, Francis Perkins, and Rosie the Riveter.

Panels 1-11.

Steven Greenhouse, Gov. Paul LePage Takes Aim at Mural to Maine’s Workers, N.Y. Times, Mar. 24, 2011, at A18.

Clashes at state capitols over organized labor have become commonplace this year, with protesters throughout the country objecting to proposed limits on collective bargaining and cuts in benefits. Maine’s governor, Paul LePage, has opened a new — and unlikely — front in the battle between some lawmakers and unions: a 36-foot-wide mural in the state’s Department of Labor building in Augusta.

The three-year-old mural has 11 panels showing scenes of Maine workers, including colonial-era shoemaking apprentices, lumberjacks, a “Rosie the Riveter” in a shipyard and a 1986 paper mill strike. Taken together, his administration deems these scenes too one-sided in favor of unions.

A spokeswoman said Mr. LePage, a Republican, ordered the mural removed after several business officials complained about it and after the governor received an anonymous fax saying it was reminiscent of “communist North Korea where they use these murals to brainwash the masses.”