Archives for category: Economy

Walmart, owned by the fabulously wealthy Walton family of Arkansas, has told the city of Washington, DC, that it will not build stores there if the City Council passes a “living wage” bill. The members of the family are billionaires and at the very least multimillionaires.

Walmart wants to pay only the minimum wage of $7.50 an hour. The City Council wants a “living wage” of $12.50 an hour, reflecting the high cost of living in DC.

Walmart says it will abandon DC if required to pay such “high” wages.

Have you seen the ads that Walmart is running on national television that show how their employees are achieving their dreams because of their beneficent employer? On $7.50 an hour?

The Walton Family Foundation is happy to throw millions of dollars into DC charter schools, but not provide a wage that will allow the parents of the children in those schools to make choices about their lives.

We have heard in state after state that teachers’ pensions and wages must be curtailed because they–and other public workers–are destroying the economy. Those greedy, selfish teachers and principals!

However.

The Economic Policy Institute in DC reports that in 2012 the average CEO made 273 times the wages of the average worker.

Now it is very important to understand the concept of shared sacrifice. Your typical CEO might have insisted on wages 500 times that of the workers, but they graciously consented to a ratio of only 273:1.

Here are a few key findings:

“Average CEO compensation was $14.1 million in 2012, using a measure of CEO pay that covers CEOs of the top 350 firms and includes the value of stock options exercised in a given year (“options realized”), up 12.7 percent since 2011 and 37.4 percent since 2009. This is our preferred measure.”

Also:

“From 1978 to 2012, CEO compensation measured with options realized increased about 875 percent, a rise more than double stock market growth and substantially greater than the painfully slow 5.4 percent growth in a typical worker’s compensation over the same period.

“Using the same measure of options-realized CEO pay, the CEO-to-worker compensation ratio was 20.1-to-1 in 1965 and 29.0-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.”

Think how busy they must be outsourcing jobs to low-wage nations. Tough job, but someone has to do it.

One of our regular readers and commenters Is a Tea Party activist who likes to joust with anyone who dares to express compassion for those whose lives are blighted by poverty. He scoffs at the idea that there is such a thing as communal responsibility. In his world, it is always nasty and brutish, and it is each one for himself.

So here is a story that appeared in the New York Times on July 2. It is about a woman who works for Kentucky Fried Chicken. She is a shift manager, and she is paid $7.75 an hour. She makes an extra 50 cents an hour because of her title and extra responsibilities. Her husband is unemployed. From her meager earnings, she must feed and clothe three children and pay the rent. She said, “I’m beyond not satisfied. This isn’t the life I want for my children. This isn’t the life I want for myself.” Last year, when boiling oil scalded her hands and she was out of work, she got $58 a week in workers’ compensation. A welfare queen, right?

The CEO of YUM!, which owns Taco Bell and KFC, makes $11.3 million per year. The Times says he “helped lead the battle against paid sick days.”

Fast food workers and other workers whose wages are barely above the poverty line are trying to unionize. Imagine that.

More from a reader who calls himself “Democracy”:

As I continue to point out, the U.S. already IS internationally competitive.

The World Economic Forum ranks nations each year on competitiveness. It uses “a highly comprehensive index” of the “many factors” that enable “national economies to achieve sustained economic growth and long-term prosperity.”

The U.S. is usually in the top five (if not 1 or 2). When it drops, the WEF doesn’t cite education, but stupid economic decisions and policies.

For example, when the U.S. dropped from 2nd to 4th in 2010-11, four factors were cited by the WEF for the decline: (1) weak corporate auditing and reporting standards, (2) suspect corporate ethics, (3) big deficits (brought on by Wall Street’s financial implosion) and (4) unsustainable levels of debt.


Last year (2011-12), major factors cited by the WEF are a “business community” and business leaders who are “critical toward public and private institutions,” a lack of trust in politicians and the political process with a lack of transparency in policy-making, and “a lack of macroeconomic stability” caused by decades of fiscal deficits especially deficits and debt accrued over the last decade that “are likely to weigh heavily on the country’s future growth.” The WEF did NOT cite public schools as being problematic to innovation and competitiveness.

And this year (2012-13) the WEF dropped the U.S. to 7th place, citing problems like “increasing inequality and youth unemployment” and, environmentally, “the United States is among the countries that have ratified the fewest environmental treaties.“ The WEF noted that in the U.S.,”the business community continues to be critical toward public and private institutions” and “trust in politicians is not strong.” Political dysfunction has led to “a lack of macroeconomic stability” that “continues to be the country’s greatest area of weakness.”


[Note: data on 2009, from the 2010-1011 competitiveness report can be found here: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf ]

The critics continue to point the finger of blame and responsibility, though, at public schools and teachers. Seriously, you’d almost have to be a moron to buy into this stuff. And yet……

The problem in American public education is largely one of poverty. The data show it. Indeed, PISA scores (the scores usually cited by public education critics) are quite sensitive to income level. If one disaggregates U.S. scores the problem becomes clearer: the more poverty a school has, the lower its scores. The presumed do-gooders seem to think that more “competition” and ambitiousness will cause the schools to fix the effects of poverty. Those effects are pernicious.

A technical report from the American Academy of Pediatrics on the damaging effects of toxic stress in children – the kind of stress found in high-poverty urban areas – finds that such stress involves “activation of the hypothalamic-pituitary-adrenocortical axis and the sympathetic-adrenomedullary system, which results in increased levels of stress hormones, such as corticotropin-releasing hormone (CRH), cortisol, norepinephrine, and adrenaline. These changes co-occur with a network of other mediators that include elevated inflammatory cytokines and the response of the parasympathetic nervous system, which counterbalances both sympathetic activation and inflammatory responses.”

The result is that “toxic stress in young children can lead to less outwardly visible yet permanent changes in brain structure and function….chronic stress is associated with hypertrophy and overactivity in the amygdala and orbitofrontal cortex, whereas comparable levels of adversity can lead to loss of neurons and neural connections in the hippocampus and medial PFC. The functional consequences of these structural changes include more anxiety related to both hyperactivation of the amygdala and less top-down control as a result of PFC atrophy as well as impaired memory and mood control as a consequence of hippocampal reduction.”

See: http://pediatrics.aappublications.org/content/129/1/e232.full.pdf

In plain speak, alleviating poverty and its pernicious effects, and providing children with high quality environments before they get to school, and following up with health and academic and social policy programs while they are in school, results not only in high-quality education but also in a high-quality citizenry….and in promoting the general welfare of the nation. This is surely not what the “reformers” want. It might – will – require a cessation to the gaming of the “markets” and the tax system.

The public education system in a democratic republic is supposed to develop and nurture democratic character and citizenship. That’s the kind of reform we need.

And it’s exactly the kind of reform the “reformers” detest.

Including Arne Duncan.

EduShyster offers free career advice to those who worry about being unprepared for the new economy or being fired.

She takes her cues from the New York Times columnist Tom Friedman. The first tip is to make a point of rooming with Tom’s daughter at Harvard.

The second tip is to learn who Kanye West is and start tweeting about him.

Her other tips are equally valuable. You should not miss this one.

EduShyster reports here about a charter school in Utah where the goal of schooling is commerce.

Starting in kindergarten, the curriculum is all about buying and selling:

“HighMark administrators are quick to point out that the school is not a pint-sized business school. Instead, key business concepts and principles are integrated into every aspect of the K-8 charter. For example, “a student wanting to become a dentist will learn about the marketing aspect of dentistry, the pros and cons of opening their own office, entrepreneurship, and what leadership qualities are necessary to hire and supervise a staff.””

Now this is an interesting idea that needs to be deconstructed. Mayor Bloomberg, reputedly worth $20 Billion, suggests that some young people should skip college and be a plumber.

On one hand, that’s good advice for young people who are not interested in going to college. Many, even some who should go to college, can’t afford to go because the cost is so prohibitive. In recent years, the states have shifted the costs to students and made college unaffordable for students unless they are willing to take on heavy debt.

On the other hand, if Mayor Bloomberg really believes this, he should not have gutted so many of Néw York City’s fine vocational programs.

If the mayor is serious, he might look into the German apprenticeship system, which seems to work well. Germany has taken care not to outsource its manufacturing base (as our corporations did), and it has far fewer college graduates than we do.

From a reader:

Globalization has been the ingenious “get out of jail free” card the corporations have played:

As these “savvy businessmen” go global to freely impose the conditions which appalled America a century ago (The number of confirmed dead from the Bangladesh garment factory collapse and fire Is approaching and will certainly surpass 1000,)

I offer this:

The Triangle Shirtwaist Fire of 1911

At the time of the fire the only safety measures available for the workers were 27 buckets of water and a fire escape that would collapse when people tried to use it. Most of the doors were locked and those that were not locked only opened inwards and were effectively held shut by the onrush of workers escaping the fire.

As the clothing materials feed the fire workers tried to escape anyway they could. 25 passengers flung themselves down the elevator shaft trying to escape the fire. Their bodies rained blood and coins down onto the employees who made it into the elevator cars. Engine Company 72 and 33 were the first on the scene. To add to the already bleak situation the water streams from their hoses could only reach the 7th floor.

Their ladders could only reach between the 6th and 7th floor. 19 bodies were found charred against the locked doors. 25 bodies were found huddled in a cloakroom. These deaths, although horrible, was not what changed the feelings toward government regulation. Upon finding that they could not use the doors to escape and the fire burning at their clothes and hair, the girls of the Triangle Shirtwaist Company, aged mostly between 13 and 23 years of age, jumped 9 stories to their death.

One after another the girls jumped to their deaths on the concrete over one hundred of feet below. Sometimes the girls jumped three and four at a time. On lookers watched in horror as body after body fell to the earth. “Thud — dead; thud — dead; thud — dead; thud — dead. Sixty-two thud — deads. I call them that, because the sound and the thought of death came to me each time, at the same instant,” said United Press reporter William Shephard.

The bodies of teenage girls lined the street below. Blankets that would-be rescuers used ripped at the weight and the speed the bodies were falling. Fire Department blankets were ripped when multiple girls tried to jump into the same blanket. Some girls tried to jump to the ladders that could not reach the ninth floor. None reached the ladders. The fire escape in the rear of the building collapsed and trapped the employees even more.

A wealthy Bostonian who had come to New York for a Columbia University graduate degree, Frances Perkins (April 10, 1882 – May 14, 1965) was having tea nearby on March 25 when she heard the fire engines. She arrived at the scene of the Triangle Shirtwaist Factory fire in time to see workers jumping from the windows above.

Her words, spoken a little more than 50 years later, capture her own feelings and those of her contemporaries. “I can’t begin to tell you how disturbed the people were everywhere. It was as though we had all done something wrong. It shouldn’t have been. We were sorry. Mea culpa! Mea culpa! We didn’t want it that way. We hadn’t intended to have 147 boys and girls killed in a factory.

This scene motivated Perkins to work for reform in working conditions, especially for women and children. She served on the Committee on Safety of the City of New York as executive secretary, working to improve factory conditions.

Frances Perkins met Franklin D. Roosevelt in this capacity, while he was New York governor, and in 1932, he appointed her as Secretary of Labor, the first woman to be appointed to a cabinet position.

Frances Perkins called the day of the Triangle Shirtwaist Factory Fire “the day the New Deal began.”

——————–

The Ladies’ Garment Workers’ Union burst into the national consciousness in 1909 when 20,000 shirtwaist makers went on strike in New York City. .

The 1909 strike lasted 14 weeks, Union membership grew to 25,000 by the strike’s end.. Most of the larger factories had settled with the growing union, and conditions for workers seemed to be improving.

But the owners of the Triangle Waist Company, the largest blouse factory in the city at the time, led the opposition to the 1909 strike, hfiring thugs and prostitutes to harass the workers as they picketed.

Triangle was among the few nonunion holdouts when the factory went up in flamesMarch 25 of 1911, killing 146 workers.

“Everyone noticed that the Triangle factory, the one nonunionized shop, was the place of the fire. The company’s refusal to work with the unions was especially poignant, because a decent fire escape, and factory doors that opened outward, had been among the strikers’ demands.

——–

http://www.laboreducator.org/stevens.htm
http://www.forward.com/articles/136018/

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http://www.csun.edu/~ghy7463/mw2.html
Cornell University – ILR School – The Triangle Factory Fire – Legacy – Legislative Reform

http://www.ilr.cornell.edu/trianglefire/legacy/legislativeReform.html

http://womenshistory.about.com/od/triangle/a/perkins_fire.htm

When I read about the tragedy in Bangladesh, where hundreds of garment workers died when the building collapsed, it reminded me of the Triangle Shirtwaist Fire. Working at NYU, I frequently walked past the building where over 100 immigrant girls perished in a factory fire. The doors were locked. They could not escape. They could jump from the 12th floor or perish in the fire.

Events like these gave birth to the labor movement. Working people didn’t stand a chance until they organized to have a collective voice. The factory owners could treat them like human waste or lock them into their squalid work quarters or pay them as little as possible, and they had no alternative but to take the abuse or lose their job.

Unions changed that. They compelled factory owners to improve working conditions. They used their collective strength to elect officials with a social conscience. Unions changed working conditions for all workers, not just their members, and they enabled working class men and women to join the middle class.

Big business never liked unions. But only in recent decades has big business found a way to escape the legal structures that regulated wages and hours, safety, and working conditions. More and more corporations discovered that they could lower costs and improve profits by outsourcing their work to poor nations. First they fled to Mexico, then to Asia. They move their factories and facilities wherever they can pay the least.

So now we see the same conditions in China, Bangladesh, and other countries that our nation experienced a century or more ago. We see American and global corporations manufacturing their goods wherever wages are lowest (in the factories in Bangladesh, it was $40 a month), with no regard to safety or working conditions or child labor.

We pay a price too, though not so great as the price paid by the factory workers in Bangladesh. We have plentiful cheap goods, but we have lost the good manufacturing jobs that sustained millions of workers. Our leaders say that education will fix everything, and someday everyone will be college-and career-ready, but they forget that schools and colleges don’t create jobs.

I don’t have the answers to all these problems, but I have an uneasy feeling that our elites are getting fatter as the middle-class grows more insecure about the future. As I watch the war against unions, I wonder why so few people remember why unions were created.

And I worry about the disappearance of good middle-class jobs, as they are exported and turned into low-wage work and as they are replaced by technology that requires no workers at all. A friend who is now retired used to supervise a candy plant for a big corporation. It employed nearly 1,000 workers, each of whom supported a family. The same plant now is run by two or three people. Everyone else became superfluous.

Leo Casey at the Shanker Institute drew some parallels between the disaster in Bangladesh and the factory explosion in West, Texas.

I worry for our nation. Some inequality is inevitable. Dramatic inequality is toxic to the spirit.

The public schools of Buena Vista are closed. The teachers offered to work for free, but they were rebuffed. Some have filed for unemployment. The children are out of school, and no one knows when school will open again. Or if it will.

Joy Resnovits is following this story on Huffington Post.

Buena Vista is a town that got left behind when the American auto industry collapsed.

As more rust belt towns die, the question will come up again and again. Can we stop educating children when localities get washed away by economic recessions and depressions?