Working Life Jonathan Tasini's Ruminations on Work, The Economy, and Politics Mon, 28 Jul 2014 13:33:17 +0000 en-US hourly 1 An Opera Diva Can Be A Union Buster, And Just As Dumb As A Corp Thug Mon, 28 Jul 2014 13:33:17 +0000 The tender landscape of art can often obscure labor nastiness, and stupidity, that rivals anything you’d find in the corporate world, with stupidity and greed part of the mix (take Arianna Huffington, grand narcissist, who is happy to leach off writers and make tens of millions along the way). Welcome to the New York Metropolitan Opera, folks, which, true to form, is trying to lay blame on its workers and threatening a lock-out, when mismanagement has been the order of the day.

The basic story is simple: Peter Gelb, the general manager of the Opera, has to figure out how to close a deficit that he created by his overspending and mismanagement. So, his answer: go after the workers. He’s threatening to lock out the workers this week (a tactic straight from the worst playbooks of union-busting corporate raiders), even as the union’s members have said they are willing to make some sacrifices–if Gelb the Greedy does a little self-inspection.

He could be mentally disturbed perhaps:

“If Peter Gelb thinks a lockout gives him ‘leverage’ in negotiations, he doesn’t understand the performers who work for him,” said Alan Gordon, executive director of the American Guild of Musical Artists, in a statement. “Someone who would hurt the very people who work for him by taking away their money and health insurance is a very disturbed individual, not a leader but a betrayer.”[emphasis added]

Perhaps…but certainly greedy. The union explained in a press release recently:

Across the board, opera employees are questioning why the Met is demanding pay and benefit cuts from employees while delivering raises to top management. Earlier this week, the Met’s 990 tax-reporting forms were released for 2012 (the most recent year available) showing that the opera company’s general manager, Peter Gelb received a 26 percent increase in pay and benefits. Gelb received $1.8 million that year in compensation according to the 990s. In a statement to the New York Times, the Opera’s spokesman Peter Clark said that Gelb has since taken a 10 percent cut in pay.Joe Hartnett, the IA’s Assistant Director of Stagecraft, termed this “a rebate on an overcharge,” and noted that Gelb used a similar maneuver during the last round of labor negotiations in 2009. “Nobody’s fooled when management gives themselves a 26% raise and then takes a 10% pay cut right before negotiations,” said Hartnett. “We’ve been waiting all week for an explanation of why the same management that has driven up costs and mismanaged the revenue stream deserves a raise, while the workers who actually produce the opera are being asked to take a pay cut. We’re still waiting.” [emphasis added]

And in this story:

“We consider the Met Opera our family,” says D. Joseph Hartnett of the International Alliance of Theatrical Stage Employees. He’s at the bargaining table for the six unions that represent the stagehands, wardrobe workers and box office personnel, among others. “We feel that, just as any family that has a budgetary crisis, everything needs to be on the table. And that includes Mr. Gelb’s spending. And if we’re being asked to tighten our belts, Mr. Gelb is gonna have to cut up some credit cards.”

Today, the union released a letter addressed to the Opera’s Board of Directors which talks about the people who work at the Opera and savings already realized:

As the deadline draws near for negotiating a new agreement that, if successful, will sustain the Metropolitan Opera for years to come, we are struck by how little of what is being said and written about the members of the lATSE reflects a true understanding of how much those of us working behind the curtain love this great art form and how deeply committed we are to its perpetuation.Like any love, ours cannot be measured solely in dollars and cents. We are not merely “the unions.” We are not only the backstage artists whose technical expertise, night in and night out, helps to make possible the world’s greatest opera. We are part of the Metropolitan Opera family, and our love of this family is why we believe that a solution for saving the Met lies in expanding the dialogue in our deliberations beyond a singular focus on work rules, wages and benefits.

….Our members hoped to bargain collaboratively in the spirit of family and the values shared by the Met Opera and its dedicated employees. Instead, we are being subjected not only to a narrow set of demands that ignores our commitment to achieving Mr. Gelb’s vision, but also to blindness to the savings that a more comprehensive deliberation might achieve.”

Aha…So, Gelb is no different than the greedy bankers, the Wal-Mart family, or any of the other miscreants who savage the middle class: it’s his pay and wallet first in line, and fuck the rest of the people.

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Marvin Miller Will Not Be Mentioned, And So Baseball Continues To Deny Its Labor History Fri, 25 Jul 2014 16:48:22 +0000 Sunday there will be yet another ceremony at the National Baseball Hall of Fame–and it will be, without anyone saying so, a ceremony that continues the despicable behavior towards the one man who did more to change baseball outside the lines than perhaps any single individual: Marvin Miller. Despicable because, simply because Marvin Miller built the players’ union into a serious union, the owners have refused to vote him into the Hall of Fame. It’s even more despicable because, after Miller died at age 95 in November 2012, you would think that people would have an ounce of decency, a bit of humanity, to tamp down the animosity enough to be big and do the right thing. But, they have not.

I’ve had a small obsession for a number of years about somehow getting Miller his due, largely because his story is the story of the power of unions and of the transformation of peoples’ consciousness.

I have loved baseball since I was a kid. Just for the game itself. But, as I got older, and worked as a labor activist/writer and generally politically engaged person, it was baseball, and other sports, that quite clearly were the great connector: you can walk into any meeting, any union hall, any community, sit down with someone you never met and begin to forge some relationship with a simple sentence: “How about that no-hitter last night?”…

Before Miller arrived in 1966 to take over as executive director of the players association, baseball players were effectively the property of the teams they played for–-they couldn’t leave of their own accord to play for another team. Their pensions were crappy and they basically had very little bargaining power.

Miller transformed the union–and the entire industry–largely by engineering what would become free agency, but, in the bigger sense, he made the Players Association into a union.

There is a forward and introduction in Miller’s fascinating 1991 autobiography, “A Whole Different Ball Game: The Inside Story of Baseball’s New Deal” (I proudly own an autographed copy). The amazing Studs Terkel writes:

Marvin Miller, the founding executive director of the Major League Baseball Players Association, came along and not only changed the rules of the game but brought an end to the age of innocence: for some of our finest athletes, it was a liberating experience. They discovered that “union” was not a dirty word. They discovered a sense of community. One of the most aspects of this book concerns ballplayers, including the stars, fighting not only for themselves, but for the old-timers as well as for the kids yet to come. In these days, when union-busting is the fashion of the day, and mean-spiritedness the new religion, this is pretty thrilling stuff.Marvin Miller, I suspect, is the most effective union organizer since John L. Lewis. Though the times may be out of joint for trade unionism, though “scab” is no longer a dirty word in too many quarters, something remarkable has happened to our pro athletes: they have discovered where the body is buried, who gets what and who earns what he gets. And it began with the baseball players.[emphasis added]

Bill James, who is probably the leading baseball statistician, wrote, in part:

If baseball ever buys itself a mountain and starts carving faces in it, one of the first men to go up is sure to be Marvin Miller……Miller’s battle was not for himself, but for what he saw as being right, the right of players to control their own careers and participate in the enormous wealth generated by major league baseball. He worked hard to keep the spotlight off himself and on the issues, on the absurdity of the status quo–but the simple fact that so little was know about him, as a man, enabled his opponents to patin onto him whatever image they chose. He courted enmies among the wealthy and powerful and became the target of their animus. Because he attacked the settled issues of power, it was so easy to portray him as powerful. The irony of Miller’s greatness is that he became larger than life by trying hard not to be, by trying simply to slip into the role he had created for himself.

One of the most powerful weapons used against unions is to essentially write them out of history: children don’t learn about unions in schools. Most politicians only mention unions when they are slumming for a check for their campaigns or they promise to put on sneakers and walk picket lines when elected but somehow that promise is forgotten once the election is over; they talk great rhetoric about the “middle class” but you almost never hear, unprompted and certainly not in front of crowds outside a union hall, a great speech about unions and their central place in making a healthy economy.Now, the refusal, posthumously, to pave the way for Miller’s induction is a continued denial of labor’s role. I am still hopeful that maybe this campaign might still take off…in the near future.

Most sports “journalists” ignore this story. I use “journalist” quite loosely because, largely, they avoid the social aspects of sports particularly when it comes to labor rights. It doesn’t fit with the narrative–and most of them are beholden to teams and leagues for access so they came their mouths shut (come to think of it, they aren’t much different than political journalists these days…but I digress).

Murray Chass of The New York Times had a strong column on Miller back in 2007 on the occasion of the snub of the day:

The National Baseball Hall of Fame has become a national joke. Its latest electoral contrivance elected three former executives to the Hall yesterday, none named Marvin Miller. Making the committee’s decision even worse, one of the three is named Bowie Kuhn.For any committee of 12 supposedly knowledgeable baseball people to elect Kuhn, Barney Dreyfuss and Walter O’Malley and not Miller defies reasonable and logical explanation.

Of the three men elected by this newfangled panel, O’Malley deserves the honor because by moving his Brooklyn Dodgers to Los Angeles 50 years ago, a move for which he is still reviled in Brooklyn, he opened the entire country to baseball. The new geography made a significant impact on Major League Baseball.

Few men, if any, however, made as significant an impact as Miller on Major League Baseball. You don’t have to like what he did to recognize that impact. The game today is what it is in great part because of what Miller did as executive director of the players union from 1966 through 1983.

I hope, probably in vain, that someone like Joe Torre would use the moment on Sunday of his well-deserved induction to at least mention Marvin Miller’s role. After all, Torre was, during his playing years, an active union rep for his team (Atlanta). A few years ago, I traveled to Major League Baseball’s winter meetings to try to drum up support among players for Miller’s induction. I saw Torre, and asked him: isn’t it time? His response: no doubt (Though, after handing him a card, I never heard from him subsequently).

Personally, I will not watch the induction ceremony, nor set foot in the Hall of Fame (which is not a far drive away) until Marvin Miller is inducted. It would feel like scabbing, crossing a picket line. Certainly, it would feel like ignoring a small, and invisible to most, dab of venom running through the building, an ugly stain that divides–and that is not what baseball should be about.

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Obama: Companies “cherry-picking the rules, and it damages the country’s finances” Fri, 25 Jul 2014 01:56:07 +0000 I detect a president who thinks he’s found a very potent political argument. Having gone soft on the bankers, letting all the big fish skate after wrecking the economy, the president has figured out that people just won’t stand for a tax system that leaves regular people holding the tab while CEOs figure out how to screw the public, day after day. And, so, he’s now personally calling for an end to so-called tax “inversions”

I’ve written about this over the past few months, and a big tip of the hat to Sen. Carl Levin and his brother Rep. Sander Levin who have companion bills to stop so-called tax “inversions” (and another tip of the hat to Citizens for Tax Justice, which has been pushing the issues).

As Levin put it:

The issue we seek to address is known technically as “corporate inversion.” The details of inversions sound complex, but the principle is not. Inversion means avoiding potentially billions of dollars in U. S. taxes by changing a corporation’s address, for tax purposes, to an offshore location. What we have here is a tax avoidance scheme, an enormous loophole that allows companies to avoid billions in taxes without any significant change in where they operate, where their profits are generated, or the location of the executives who manage and control these corporations. A recent prominent example involves Pfizer, a U.S. drug company, and AstraZeneca, a U.K.-based competitor. This proposed corporate takeover – which Pfizer makes abundantly clear is largely about avoiding U.S. taxes – has gotten a lot of attention the attention, and for good reason. It would cost the United States about $1 billion a year in tax revenue. But this is not about just two companies. This is not about just one merger – even a merger that could shove billions of dollars in tax burden onto U.S. taxpayers. The Pfizer-AstraZeneca deal is just the latest example of abusive inversion deals. You cannot pick up a newspaper’s business section these days without reading about what Reuters has called “a wave of tax-driven overseas deal-making.” Some companies that believe in meeting their tax obligations are under competitive pressure to invert. It is clear that dozens, perhaps scores of companies are preparing to file their change-of-address cards, and in doing so, avoid billions in U.S. taxes. That burden doesn’t just go away. Either our remaining constituents must pick up the tab, or the loss of Treasury revenue adds to the federal deficit.[emphasis added]

More from CTJ:

The loophole in the current law allows the company resulting from a U.S.-foreign merger to be considered a “foreign” corporation even if it is 80 percent owned by shareholders of the American corporation, and even if most of the business activity and headquarters of the resulting entity are in the U.S.In theory, once a corporation is “foreign,” any profits it earns in the U.S. remain subject to U.S. taxes, but offshore profits are not. But inversion also makes it easier for a corporation to avoid U.S. taxes on its U.S. profits. This is because corporate inversions are often followed by “earnings-stripping,” which makes U.S. profits appear, on paper, to be earned offshore. Corporations load the American part of the company with debt owed to the foreign part of the company. The interest payments on the debt are tax deductible, officially reducing American profits, which are effectively shifted to the foreign part of the company.

And, so, now the president has seen the light. Just today in Los Angeles, he called for an end to tax inversions:

President Obama on Thursday called for Congress to strip away tax advantages that have encouraged a rush of mergers and acquisitions that give companies an overseas base while they maintain their presence in the United States.In an appearance at a technical college that was intended to focus on job training, the president used unusually harsh language to describe American companies that acquire overseas companies to relocate for tax reasons, known as inversions. He said they were renouncing their American citizenship by “cherry-picking” the nation’s tax laws at the expense of ordinary taxpayers.

“These companies are cherry-picking the rules, and it damages the country’s finances,” Mr. Obama said. “It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.”

“I don’t care if it’s legal — it’s wrong,” he said, prompting the audience to boo the companies taking advantage of the practice.[emphasis added]

Welcome to the party, Mr. President. About time.And if these guys are smart, they’ll take this theme and bang it in every state where there is a close Senate race.

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$300 BILLION Robbery of Workers And Counting: Why We Need $20-An-Hour Minimum Wage Thu, 24 Jul 2014 19:44:31 +0000 Tick, tick, tick, tick…every minute that goes by is another minute workers are being robbed–in particular, those people forced to work for the slave-like minimum wage. And if you looked back just five years, there’s a price tag to that robbery: over $300 billion.

My friends over at the truly progressive Center for Economic and Policy Research came up with a terrific running calculator that we should stick on every union website and every progressive site:

This second clock shows how many dollars America’s minimum wage workers have lost since July 24, 2009 if the minimum wage had instead been raised to its 1968 level and then kept pace with inflation since then. Every second it shows how much more money they’re losing, as long as the federal minimum wage remains below its historical peak.

As I sat down to write this piece, the calculator was ticking towards $301 billion…

The clock easily documents the legalized slavery and legalized robbery millions of workers have to endure.

My only disagreement with CEPR is that the minimum wage hikes should be tied to PRODUCTIVITY not inflation–as I explained here in my argument for a campaign for a $20-an-hour minimum wage.

Either way, though, this tells the story quite well.

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Retroactive, Of Course Wed, 23 Jul 2014 17:43:57 +0000 In the debate over tax inversions–that little corporate maneuver to reincorporate abroad to avoid U.S. taxes–there’s a little fight going on about a small but significant issue: if legislation passes to stop this scam, should it be retroactive? Of course it should.

This just came up during a Senate hearing. Republicans, in particular Orrin Hatch, are throwing up all sorts of objections (phony of course) to try to block a serious bill to end this robbery. As Citizens for Tax Justice explains, whether the bill should be retroactive is one of the objections:

As for Hatch’s opposition to any retroactive change in the tax law, waiting even a couple weeks could result in more corporations that merge and claim to be foreign and able to avoid U.S. taxes forever. And a retroactive provision is not particularly burdensome for these corporations, which are on notice that such a change is likely to apply to any deals made from May on and are able to plan accordingly. In fact, Medtronic and other aspiring inverters are actually writing provisions into their merger agreements that allow them to walk away from the deals if Congress changes the rules to deny the tax benefits of inversion.

As I’ve pointed out before, the whole maneuver is a scam. So, making it retroactive it entirely in the public interest. Not that Hatch cares.


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Tragedy In Detroit Tue, 22 Jul 2014 13:01:46 +0000 This is simply a tale of having a gun put to your head: vote “yes” or we screw you even harder.


Coming to terms with what came to be seen as inevitable, this city’s public-sector retirees have voted to lower their expected pension benefits, a crucial step in the city’s plan to emerge from bankruptcy before the end of the year.

The result, announced late Monday night, came after two months of court-required voting.

The balloting revealed a belief by current workers and retirees that the city’s offer — as much as 4.5 percent cuts to some pensions and diminished future cost-of-living increases — would be even worse if this one was rejected. It also reflected a series of deals struck over months with the leaders of unions, retiree groups and pension funds who had, in some cases reluctantly, called on their members to vote yes to cutting their own pensions. Some retirees said they had voted yes because they felt there was no good alternative.

]]> 0 No, Miles, It Does Matter Mon, 21 Jul 2014 13:16:41 +0000 Love those CEOs obfuscating the truth. I know, you’re shocked. This little pearl comes in the arena of tax avoidance.

You may recall my previous posts on tax “inversions”, that clever little maneuver companies do to avoid paying taxes in the U.S. by reincorporating abroad (see here). Well, now comes Abbott Labs CEO Miles White who is upset that anyone would see what his company would so as tax avoidance. CTJ has it down pat:

In a July 18 Wall Street Journal op-ed, White suggests that there are no tax benefits to inversion: “Inversion doesn’t change a company’s tax rate. A company pays the same tax rate in the U.S. after inversion as it does before inverting. A company also pays the same tax rates in foreign domiciles before and after inversion,he wrote.

While it is technically true that inverted companies should continue to pay the 35 percent U.S. tax rate on any U.S. profits, the experience of previous inversions tells us that U.S. tax rates will likely become mostly irrelevant to these companies post-inversion because they will move aggressively to make their U.S. profits appear to be foreign.

For example, the manufacturer Ingersoll-Rand, after inverting to become a Bermuda corporation in 2001, immediately went from reporting annual U.S. profits of hundreds of millions to reporting losses or very small profits each year, while it’s reported profits outside the United States expanded dramatically. This did not reflect any actual loss of U.S. customers or business. Rather, the corporation accomplished this by loaning $3 billion to its U.S. subsidiary, which then deducted the interest payments on the debt to effectively wipe out its U.S. income for tax purposes. It seems likely that this practice, called earnings stripping, would be aggressively used by Walgreens, Medtronic, Mylan, and each of the other large U.S. companies that are currently contemplating an inversion.

It’s a scam. It’s legal. But, guys like White have the gall to try to dress it up as something else.



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The Post Office Could Be Your Bank Fri, 18 Jul 2014 19:40:50 +0000 Stumbled on a conversation today at Netroots Nation that is quite intriguing: using the post office as a bank outlet. Guess what? It existed decades ago. It could happen again–but, you’ll never guess who hates the idea? OK, yup.

I’ll write a bit more on this soon. But, the basic idea is simple, as outlined in this paper by Professor Mehrsa Baradaran:

The post office could offer check cashing and payday lending services much like those offered by fringe banks, but at a much lower cost. It could also offer them without all the documentation and formal barriers of banks. There are currently non-banks, other than fringe lenders, starting to offer these products because they do not involve sophisticated credit analysis or any regulatory support, such as FDIC deposit insurance.

This idea is not new but it also has been given a bit of institutional support from the Inspector General of the U.S. Postal Service. In a recent white paper, he wrote:

Millions of Americans do not have a bank account, or use costly services like payday loans and check cashing exchanges just to make ends meet. The entire underserved population comprises more than a quarter of all U.S. households—some 68 million adults. They are an economically diverse mix of working and middle class families, poor and unemployed people hurt by the recent economic crisis, young people, immigrants, and others who are trying to make it paycheck to paycheck. Together, they represent a huge market. In 2012, they spent about $89 billion just on interest and fees for alternative financial services.

The Postal Service is well positioned to provide non-bank financial services to those whose needs are not being met by the traditional financial sector.

Wonder what people would do if they could never have to walk into a Citibank again.

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Inversions Will Continue Thu, 17 Jul 2014 20:37:29 +0000 Heh. That’s likely what those corporate legal and accounting minds are thinking: nuttin’ is going to pass that stops that nice little scam allowing corporations to incorporate overseas to avoid paying taxes in the U.S.

I wrote about this scam not too long ago. And prospects are not good:

On Tuesday, senators are scheduled to conduct a hearing on international corporate taxation that is expected to focus on inversions.

“This inversion loophole must be plugged,” Mr. Wyden said in a statement. “As the speed of inversions increases, this will only fuel bipartisan urgency to stop companies from deserting the U.S. I’m talking with my colleagues and exploring options for addressing this in the near and long term.”

But without a similar effort in the House, no new laws are likely anytime soon. [emphasis added]

It’s all the rage:

In recent months, several big companies have reached deals that will allow them to reincorporate in countries like Ireland and the Netherlands, where corporate taxes are lower. This week alone, two such arrangements appeared sealed, with AbbVie, the drug maker based in Chicago, winning tentative approval from Ireland-based Shire for a $53 billion acquisition; and Mylan, the generic drug maker based outside Pittsburgh, paying $5.3 billion for the European assets of Abbott Laboratories.

The theft continues.

]]> 1 Only A Patriot When It Mean Money Tue, 15 Jul 2014 16:30:42 +0000 Flag-waving patriots don’t particularly impress me. Too many are the types to want to go to war–but never serve themselves (a la Dick Cheney’s “I had other priorities” during the Vietnam War). Here’s an economic “patriot” who is only as good as profits to her corporation.

A patriot no more:

Heather Bresch grew up around politics. Her father is Joe Manchin, the Democratic senator from West Virginia and a former governor. She has heard him say repeatedly, “We live in the greatest country on Earth,” as he did in countless political advertisements. And it appeared to rub off on her: Ms. Bresch was named a “Patriot of the Year” in 2011 by Esquire magazine for helping to push through the F.D.A. Safety Innovation Act.

Until she was looking to save money:

But on Monday, Ms. Bresch announced plans to renounce her company’s United States citizenship and instead become a company incorporated in the Netherlands, where the tax rates are lower.

America…so yesterday.

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The Jail Cells Remain Empty Of Bankers Mon, 14 Jul 2014 20:14:35 +0000 Well, gee, no surprise here. A big CIVIL penalty for a major financial scam but no banker is heading to jail. Yet. Or probably never.

This was via The Wall Street Journal:

The Justice Department on Monday said Citigroup knowingly sold mortgage-backed securities with loans containing “material defects” and concealed that information from investors in what Attorney General Eric Holder described as “egregious” misconduct that helped fuel the 2008 financial crisis.

The settlement, which includes a $4 billion civil penalty, doesn’t absolve Citigroup or its employees from facing any possible criminal charges, Mr. Holder said. He declined to say whether the government was pursuing criminal charges.

Ok, so, what about some pressure on Holder to bring some criminal charges? It has to come from the streets because the White House clearly is not interested in prosecuting these crooks. Look, it even says Citiban “knowingly sold mortgage-backed securities with loans containing “material defects” and concealed that information from investors”!!!

For fuck’s sake.

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When You Hit That Pothole This Weekend, Thank Corporate GREED Thu, 03 Jul 2014 15:57:40 +0000 For the millions of people hitting the road at this very hour, and in the hours to come, it’s going to be a bumpy journey, crashing through potholes after pothole, rutted road after rutted road, and creaky bridge after creaky bridge–all thanks to the dismal shape of the  country’s infrastructure (which gets a D+ from the American Society of Civil Engineers). No doubt, drivers will curse a whole list of people–but a small wager that few give up a few choice words for a big culprit: corporate greed.

You may know this, courtesy of Citizens for Tax Justice:

Most federal funding for highways comes from the federal Highway Trust Fund, which will face a shortfall starting in August because Congress has not adjusted the 18.4 cent per-gallon gas tax and 24.4 cent per-gallon diesel tax, which are not indexed for inflation, since 1993. The fact that they have not been increased to keep up with the rising costs of construction or adjusted to account for reduced fuel consumption now means that these taxes no longer raise enough money to fund our infrastructure needs.

Of course, one way to deal with this is to raise the tax of gasoline (we still pay really low prices relative to the rest of the world). But, that ain’t happening with the jokers running the show in Congress.So, instead, CTJ points out:

If lawmakers cannot bring themselves to provide the most obvious solution, an increase in fuel taxes, a second best solution would be to raise revenue by closing corporate tax loopholes. It would be impossible for corporations to profit if the U.S. did not have the roads, bridges and other infrastructure that makes commerce possible, so it’s only reasonable that they pay some taxes to support the federal government and it’s reasonable for Congress to close loopholes allowing corporations to shirk that duty.Two proposals introduced in Congress recently would raise $19.5 billion for the Highway Trust Fund by closing the loopholes that allow corporations to “invert.” In an inversion, an American corporation reincorporates itself abroad and claims to be a foreign company that is mostly not subject to U.S. taxes even if it is still managed from the U.S. and conducts most of its business in the U.S. There are many more corporate tax loopholes that must be closed, and much more Congress needs to do to provide adequate infrastructure funding. But it certainly makes sense to start by stopping the worst corporate citizens from avoiding taxes.

The existing tax rules prevent an American corporation from simply reincorporating itself in a tax haven and declaring itself “foreign.” But a loophole allows inversions to take place when an American corporation merges with a smaller foreign corporation, even if the management and most of the business of the newly merged company stays in the U.S. In theory, the profits that any corporation (even a “foreign” corporation) earns in the U.S. are taxable in the U.S., but inversions are often followed by earnings stripping, which makes U.S. profits appear to be earned offshore where they won’t be taxed.[emphasis added]

As I wrote recently, Sen. Carl Levin has been trying to stop these “inversions.”Simple formula: holes in the road=corporate greed.

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$10.10-An Hour Minimum Wage Campaign Is A REALLY Bad Idea Wed, 02 Jul 2014 14:13:15 +0000 The campaign for a $10.10 federal minimum wage, championed by the president, Democrats in Congress and a whole raft of “liberal/progressive” organizations, is a very bad idea.

To be clear, I’m not arguing it’s too ambitious. The opposite: what we need is a campaign, now, today, for a minimum wage of $20-an-hour. Anything less is a failure to confront poverty in America and a bankrupt economic system.

$10.10-an-hour will not allow people to make a fair living, or challenge the basic, “We-make-profits-thanks-to-poverty” system that underpins today’s real world economy.

Anything short of $20-a-hour is a capitulation to the most narrow politics, particularly on the part of so-called “liberals/progressives” who are, unintentionally, locking into place deep poverty in America and ratifying the basic principle of the so-called “free market”.

And $20-an-hour actually relates to real life after you look at a very complicated idea: simple math.

The Math:

In the past 45 years, productivity has more than doubled. Productivity is a measure of how much value workers add per some unit, usually hours of time worked. In shorthand, it typically means people are working harder than ever and making more stuff faster (a small bit of that is due to technology) and, thus, cheaper (whether this fast rise in productivity is good for the human soul or the planet is a very important topic for another time).

In the old days, (say, the really “ancient history” of the early1970s) productivity translated into wage gains. If the minimum wage today reflected the cumulative productivity increases, computed from four decades ago to 2014, the minimum wage should be $18.30 today and close to $19-an-hour by 2016 when the proposed $10.10-an-hour would kick in, if it became law.

That’s pretty simple math. Grossly, and somewhat imperfectly speaking, the demand for $10.10-an-hour is a demand that would place the minimum wage a shade under half of what it should be if corporations actually paid for workers’ value-producing labor—as opposed to robbing them of their value-producing labor.

Some more basic math: at $10.10 per hour, for a 40-hour-a-week, a full-time worker laboring 52 weeks a year would gross $21,008, with no pension, and no vacation (for the moment, put aside the reality that minimum wage workers often can’t get full-time work).

That would put a worker just above the official poverty line for a family of three, which in 2014, is set at $19,790 (the numbers are published in the Federal Register and are based on the Census Bureau’s official poverty thresholds.

In that world, you are a slave. To make $21,008, you get no time off. None. Zero.

Second, if you happen to live in a family of four or larger, tough luck—you still are in poverty, which, for a family of four, is defined as an income below $23,850.

Third, and really most important, the official poverty levels are too optimistic because they are set using calculations that do not reflect what it really costs to make it day-to-day, week-to-week. I, and many others, have raised for a very long time the issue of the serious shortcomings in using the CPI and Gross Domestic Product as a measure of economic well-being (in short, a lot of stuff can be made, the economy can “expand” and prices can go up…and the people can actually be far worse off…here is one post). The official poverty level is set using the consumer price index, which rose 1.5 percent for the time period used to come up with the 2014 figures.

Raise your hand and dance a few cool steps if you think that on an annual wage of $21,008—whether you are single or in a family of two, three or four—you could meet your rent, pay utilities, pay for food, gas, cable, and a whole host of other expenses—not to mention, god forbid, save a few dollars for your kid’s education. The official price index does not reflect the real struggle to make ends meet in the wage-robbery economy of today.

So, we should be talking about indexing the minimum wage to productivity—how hard people work—as opposed to indexing it to inflation or the CPI (which the Democrats proposal does) because those are very dodgy numbers to use to judge how people actually live. This is an argument advanced for some time by Joel Rogers, a professor of sociology at the University of Wisconsin and one of the country’s foremost thinkers about work and the economy (and, as an aside, the original conceiver of the New Party, the first iteration of what would become the Working Families Party).

I’m guessing that the notion of tying the minimum wage to productivity will have a few worrywarts wringing their hands. They might say that if the minimum wage is indexed to productivity, then, eventually the minimum wage will catch up with the median wage.

Well, it’s worth remembering why that would happen. Wages have been flat for so long that the median wage has barely budged, rising just 0.2 percent annually between 1979 and 2013—while productivity rose almost 65 percent in that period overall.

Why? Well, we know why: employers have been more interested in pocketing profits for themselves (read: huge CEO pay and benefit packages) than giving workers raises. Those profits come directly from the big productivity gains thanks to the sweat and blood of workers (which is why my blood boils when I hear the bi-partisan praise for the small business “job creators” who power the economic engine seemingly on their own).

Oh, imagine the horror when the minimum wage catches up with the median wage. And if that is what worries people, wouldn’t it make more sense to seize the political agenda, and advocate for a higher minimum wage AND a boost in the median wage—partly by making it easier, not harder, to unionize?

The Politics:

So, that’s the math. Predictably, when you get to the politics, you hear the most unimaginative, uninspiring and lazy, “this is the best we can do. Nothing better will pass.” This view also comes along with another politically exciting view: we, (presumably, this means “Democrats”), will have a real difference to show people in the 2014 elections, with a message: “we care about workers, the Republicans do not.”


Politics point Number One. According to the Economic Policy Institute: “Raising the federal minimum wage to $10.10 by 2016 would return the federal minimum wage to roughly the same inflation-adjusted value it had in the late 1960s.” [emphasis is mine].

Don’t you love it? The great minds of politics, the people who are the warriors for the working “family” (“family” being another annoying capitulation to “messaging”), the movement builders, are promoting a message that boils down to: “Hey, you, minimum-wage worker, have we got a bargain for you. We care so much about how hard it is for you to live on the minimum wage, elect us so we can bring your pay right up into the modern age…into the 1960s.”

And leave it stuck there for a very long time. The bill indexes the minimum wage to inflation, so that as prices rise in subsequent years, the $10.10 would be, as EPI writes, “automatically be adjusted to preserve its real value.”

But, its real value—the real value of how hard people have sweated and labored—has already been eviscerated. Indexing the $10.10 to inflation (not productivity) is keeping its real value linked to a 1960s standard.

Politics point Number Two: you can almost guarantee that, if someone actually notices, say in five years, that millions of people on the minimum wage are still mired in poverty and argues for a new hike, a bi-partisan echo will follows: “We did the minimum wage already, go away.”

So, in the unlikely event the $10.10 passes, it basically dooms millions of people to a life of poverty. Forever. Though it does offer a great opening for a new, inspiring slogan for the 21st Century: “The (Just Kidding) War On Poverty (Lite Version)”, with perhaps even an opening for a theme song to debut on American Idol.

Politics point Number Three (most obvious): $10.10 isn’t going to pass the Congress. So, it really is just a political exercise and one lacking in any political courage whatsoever.

So, why not be bold?

What Should Be Done:

Twenty. Dollars. An. Hour.

Simple. Easy to remember. And consistent with math that accurately values workers’ contributions to the economy.

Think of it. T-shirts, buttons, bumper stickers, and social media memes everywhere that state simply: $20.

That’s all. $20.

The back of the T-shirt might say, “I Am A Human Being”. Eventually, “$20” would carry with it passion, energy, a vision and a simple idea: everyone should have decent-paying work.

And we should not settle for anything less because to do so is inhuman.

In the 1970s, women, and many men, wore a button that simply said “59¢” to signify what a woman’s pay was compared to a man earning a dollar. Eventually, that button, without needing a single word of explanation, carried with it a whole narrative and political demand.

Liberals/progressives (on this issue, it’s hard to see a difference) will react to $20-an-hour either by saying it’s “crazy” or “too ambitious” or “unrealistic” because the polling doesn’t support such a big hike and, of course, it will never pass.

But, the job of leaders and organizations shouldn’t always be simply to cater to where “the public” is today. Or where organizational funders—either foundations or rich people—happen to be.

Instead, we need to look ahead, try to move the country in a different direction, and, sometimes, dramatically. It’s easy to take for granted, for example, the now growing public majority opinion supporting same-sex marriage and legalization of marijuana but those two issues, very recently, did not command majority support. The shift came because a core of committed people did not accept, and were not trapped by, what public opinion happened to be. And, in their actions, they moved the country.

For sure, it’s hard work. Moving the public dramatically involves a lot more than clicking a petition link, doing a “fly-in, fly-out speech” or, even more seductive, getting an invitation to the White House. You have to actually knock on doors and put in serious shoe leather to move the public.

People in SeaTac proved that, in the face of an onslaught of millions of dollars, it could be done—the community waged the successful ballot initiative to hike the minimum wage of $15-an-hour, a level no one would have imagined possible before the campaign began.

The timidity of a $10.10-an-hour rate is even more perplexing given the topic: inequality and wage robbery.  Occupy Wall Street, strikes against low-paying fast food chains, the unease about the Wal-Martization of the economy, the public’s awareness of corporate greed, the huge gap between rich and poor, and the continued anger that bankers complicit in the financial crisis escaped punishment—all converge to create a rich terrain to be bold, and to dramatically change the conversation.  The hiking of the city minimum wage in Seattle to $15-an-hour and the SeaTac ballot initiative show that you can move the conversation.

And those efforts also bluntly underscore how meek $10.10 is in comparison and, actually, is counter-productive and damaging to tackling deep poverty in the country

At the end of the day, win or lose, we should care about dramatically altering the economy of poverty, not having some phony messaging gambit to influence a particular election cycle.

Twenty. Dollars. An. Hour.

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TPP Ban on Buy American Preferences Tue, 01 Jul 2014 19:31:46 +0000 Personally, I have to say I’m a bit queasy about the “Buy American” campaign. Seems to me that the problem is not, ultimately, that people don’t buy American products. It’s that wages are way too low elsewhere — which is what needs to be solved. But, for the record, the Trans Pacific Partnership will obliterate “Buy American”.

Per Public Citizen:

Under the TPP, the U.S. government would be required to grant all firms operating in any TPP country the same access as American firms to U.S. government procurement contracts over a set value. The TPP ban on preferential treatment for U.S. firms with respect to obtaining U.S. government contacts could result in the offshoring hundreds of millions in tax dollars now recycled into the U.S. economy under the Buy American procurement program, which started in 1933.

And here’s the table with the data.

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Is There Any Silver Lining In The SCOTUS Knifing of Public Unions? Mon, 30 Jun 2014 12:47:45 +0000 It seems more likely than not that, in a short while, the Supreme Court will inflict a deep wound in public union organizing, and, ultimately, the power of organized labor in the workplace and in politics. But, just a small word on what silver lining could be found here–and I know my friends will perhaps violently disagree.

The case, for those who have not followed it, is called Harris v. Quinn. The legalistic explanation via SCOTUSblog:

Issue: (1) Whether a state may, consistent with the First and Fourteenth Amendments to the United States Constitution, compel personal care providers to accept and financially support a private organization as their exclusive representative to petition the state for greater reimbursements from its Medicaid programs; and (2) whether the lower court erred in holding that the claims of providers in the Home Based Support Services Program are not ripe for judicial review.

In English, a ruling for the Harris side–which is represented by the anti-union National Right To Work Committee–could, if it was a broad opinion, essentially say no one working in the public sector is obligated to pay union dues. Right now, every worker has to pay an “agency fee”, whether a union member or not, to pay for the representation that comes when a union, which has won recognition to bargain for state and local workers, does the work that ends up as a collective bargaining agreement. The idea seems simple: you can’t be a “free rider”, getting for free a benefit that others work hard to achieve. It has a long tradition in law going back four decades.

There’s a pretty good summary at SCOTUSblog of the case made in the oral arguments before the court.

So, let’s say the ruling is as bad as feared. It invalidates the agency shop, and eviscerates public unions, at the very least because those unions will lose millions of dollars in income to support collective bargaining and organizing. By extension, it will severely crimp union political power because the drop in financial clout will impinge on the ability to deploy people and write checks, which, in many ways, is the reason this case is the wet-dream for the right wing.

Here is what I would see as a silver lining. If you walk up to many public sector workers in any city and ask them, “what union do you belong to?”, many don’t know. Teachers probably are the most engaged, and, at least in New York City, I’d guess most transport workers in the subway and bus system know they belong to the Transport Workers Union.

But, AFSCME…not so much. There is only a vague understanding of who the union is, and what it does.

That’s been an endemic problem for a very long time. Union members don’t have the same connection to the actual institution that represents them–people don’t see the union hall as a place to gather–accept during contract talks or a strike. Mostly, union reps deal with members only when there is a grievance, conflict–not in the course of daily life.

If the SCOTUS decision obliterates the agency fee, it will mean unions have to go out and sign up a lot more people. The case will have to be made why the union matters–and why people should pay dues.

It’s hard work. And, in an environment of less income, the union will have to figure out how to underwrite a ramped-up effort to touch people. No way to minimize that challenge.

But, at the end of the day, if labor wants to live the rhetoric of changing society and creating a movement that is broad-based–down in the streets, on every block, in every community–this *might* force unions to do some work that was not always pursued.

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The World Cup’s Dark Side: 37 Million People Left In Poverty Fri, 27 Jun 2014 18:14:39 +0000 Behind all the hoopla and fervor surrounding the World Cup, an inconvenient fact is forgotten: Brazil handed over a huge amount of money in tax breaks to the Fédération Internationale de Football Association (FIFA), much of it flowing into the pockets of huge multi-national corporations–money that roughly calculated would have lifted 37 million people out of poverty.

This is not to be forgotten, via Citizens For Tax Justice:

According to InspirAction, Christian Aid’s Spanish affiliate, Brazil will give up $530 million in tax revenue to benefit the World Cup’s corporate sponsors such as McDonalds, Budweiser and Johnson & Johnson. The country is allowing corporations to import an array of products from food, medical supplies and promotional materials tax-free, while also exempting seminars, workshops and other cultural activities from taxes.InspirAction and other advocates have said the millions saved by FIFA and its sponsors through these breaks should be used to benefit the poor, not corporations and their shareholders. Foregone World Cup tax revenue could help lift 37 million people out of extreme poverty and help improve basic services. Instead, FIFA, a supposed non-profit organization, is reporting historic profits while leaving the host country to foot the bill.[emphasis added]

The economic loss isn’t unusual in World Cup history:

In 2010, South Africa hosted the World Cup. FIFA reported that it received $3.8 billion tax-free in revenue and that year was “the most profitable in FIFA history”. However, South Africa had a $3.1 billion net loss from hosting the games. The same year, the number of tourists in South Africa dropped by half compared to previous years.

The issue of the peoples’ money going to underwrite sporting events and the building of stadiums has been out there, most regularly questioned by the good people at the Institute for Local Self-Reliance (see this, as an example)I speak as a big sports fan BUT totally opposed to public money going to subsidize the profits and egos of billionaires and big corporations.

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