“Corporations Are Very Rich People”: Record $824 Billion Last Year As Conservatives Claim Obama Anti-Business
A favorite conservative attack on President Obama is that his policies — and even his personality — amount to an assault on American businesses. “President Obama himself is the most anti-business presidentin my lifetime. With rhetoric not befitting a president he has attacked oil companies, banks, airplane users, Wall Street and anyone who makes money,” wrote Gary Shapiro, president and CEO of the Consumer Electronics Association.
However, according to the latest data, President Obama has been very good for America’s biggest businesses. Last year, in fact, the Fortune 500 made a record $824 billion, topping the previous record set before the Great Recession:
The Fortune 500 generated a total of $824.5 billion in earnings last year, up 16.4% over 2010. That beats the previous record of $785 billion, set in 2006 during a roaring economy. The 2011 profits are outsized based on two key historical metrics. They represent 7% of total sales, vs. an average of 5.14% over the 58-year history of the Fortune 500. Companies are also garnering exceptional returns on their capital. The 500 achieved a return-on-equity of 14.3%, far above the historical norm of 12%.
Of course, that return to pre-recession level earnings hasn’t translated into job or wage growth for America’s workers. In fact, inflation-adjusted wages fell last year. Big companies are also squeezing more productivity out of their workers, with annual revenue generated per worker increasing by more than $40,000 over the last five years. CEO pay, meanwhile, increased 15 percent last year.
This data also puts the lie to the Republican claim that corporate tax cuts will spur businesses to hire. If all it took were extra cash, businesses would be hiring like crazy. However, they are clearly not doing so — and the effective corporate tax rate is already at a forty year low.
By: Pat Garofalo, Think Progress, May 7, 2012
“At Risk Of Sliding Backwards”: Don’t Call Women The Richer Sex
Are women really on track to become “the richer sex” and replace men as primary breadwinners in American families, as recent headlines suggest? Not quite. The notion that women are outpacing men on the job has become a popular media narrative over the past few years. But the data on which it’s based don’t hold up.
Last week, the Bureau of Labor Statistics revealed that, in fact, we’re in the middle of a “mancovery”—while women are slipping backwards. Between June 2009 and June 2011, women lost close to 300,000 jobs, while men gained more than 800,000. “We’ve never seen a recovery like this,” the National Women’s Law Center’s Joan Entmacher told NPR, “where two years into the recovery women are doing so much worse than men and are actually losing ground.”
Still, the popular perception is that women are soaring. Much is made of the “fact” that more than 40 percent of American women are their family’s breadwinner. In her recent Time magazine cover piece (adapted from her new book, The Richer Sex), for example, journalist Liza Mundy cites 2009 Bureau of Labor Statistics data saying that one in four women outearn their spouses. This claim was picked up by scores of media outlets.
But look a bit more closely at the numbers, and the picture doesn’t seem so rosy for women. Which women are advancing? And which men are backsliding? The answers are important if you are going to talk about who’s getting “rich.”
In fact, the only segment of society in which a substantial percent of wives significantly outearn their husbands is low-income workers, according to two respected scholars who looked at large national data sets. Senior economist Heather Boushey of the Center for American Progress says that in 2010, among couples whose earnings are in the bottom 20 percent, 70 percent of women outearn their husbands.
And Anne Winkler of the University of Missouri, in her detailed 2005 analysis, found that the wealthier the couple, the less likely it is that the wife will outearn her husband.
As family income goes up, fewer and fewer women outearn their husbands, Winkler told The Daily Beast. When you look at women who really are the breadwinners—who earn 60 percent of family income—the figure drops to about 10 percent. So when you talk about women who are making appreciably more than their husbands, it’s only one woman in ten. And it’s primarily among couples earning the lowest salaries, averaging some $20,000 a year per household. Clearly, using the term “rich” doesn’t describe what’s really happening for many women.
In addition, the 40 percent figure widely cited today drops dramatically when more sophisticated analyses are used. Only when you define a woman who outearns her working husband by as little as a dollar a day as the “breadwinner”–and you include single mothers who are sole providers—can you get to that 40 percent figure.
Certainly, women have made significant gains in the past four decades, and there are indeed educated middle-class women who are the primary breadwinners, but they are far from taking over American homes.
The real story behind headlines touting the rise of women is that men, especially at the lower end of the wage scale, were doing poorly at the beginning of the recession. Even then, women weren’t doing great, but men were losing their jobs at a faster clip and their wages were declining. Now, women are sliding backward. But will the “mancovery” story have legs, or will it lose out to the “richer sex” narrative?
The latter seems likely, in part because women are graduating from college and grad schools at record rates, and there’s a strong belief that advanced degrees will turn into fat paychecks. But that doesn’t seem to be happening for women.
Women start behind when they enter the workforce and never catch up. This pattern holds true even with graduates from our most elite universities. Female Harvard alumni earn 30 percent less than their male counterparts 10 to 16 years after graduation.
And women’s representation hasn’t grown significantly in corporate boardrooms, executive suites or among companies’ top earners, reports Catalyst. CEO Ilene H. Lang said in 2011, “This is our fifth report where the annual change in female leadership remained flat. If this trend line represented a patient’s pulse—she’d be dead.”
In a recent speech, Harvard law professor Nancy Gertner said about women, “You’re supposed to say: ‘Things are fabulous.’ But they are not. Advancement has stalled.” Half of all new lawyers are women, she said, but only 16 percent of equity partners in law firms are female. And of lawyers who leave the profession, most are women—and most do it because of family and social concerns.
Under a veneer of success and progress, women are in fact at risk of sliding backward. A 2010 study by psychologist Jennifer Spoor and her colleagues at Queensland University in Australia found that men feel threatened by women’s gains.
As we wrote in a Daily Beast column last year, based on the anxiety men report over women’s successes, exaggerated news coverage of women “taking over the world” could result in a real pushback from men.
In contrast, when women focus on these gains, they report low levels of threat—as well as a diminished need to bond with other women. Spoor calls this the “rose-colored-glasses syndrome.” Too many women think all the battles have been fought, discrimination is a thing of the past and the future will bring ever-greater progress for them. This difference may explain the current low levels of feminist activism.
The “richer sex” narrative may blind women to reality, making it harder for them to build on the very real gains they’ve made in the past and truly move forward.
By: Rosalind C. Barnett and Caryl Rivers, The Daily Beast, April 28, 2012
“Can’t-Win Cul-de-Sac”: Mitt Romney’s Clumsy Economic Centrism
There are times when I feel a twinge of sympathy for former Gov. Mitt Romney. Really and truly. The Unbearable Heaviness of Being Mitt in the current ideological climate—with its highly-charged suspicions of both “socialism” and conspicuous wealth—forces him to tack left and right in ways that leave him pitifully exposed.
His calculated moves toward the right sometime in the mid-2000s, on key issues like abortion, gay rights, and immigration, are well-known and justly scrutinized.
Less noticed—but no less calculated—have been his efforts to hew to the center.
I’m thinking, first, of Romney’s proposal to eliminate capital gains taxes only for married couples making under $200,000 and singles making less than $100,000. The cap at those income levels is head-scratchingly pointless, as the vast majority who benefit from low capital gains tax rates make well over $200,000.
Romney’s official rationale for limited capital gains tax relief is that “We need to spend our precious tax dollars on the middle class.”
That sounds nice and centrist-y, but the more likely reason became clear when Romney finally released his tax returns: If he proposed eliminating taxes on capital gains altogether—as former Speaker Newt Gingrich, Rep. Ron Paul and Gov. Rick Perry have proposed—then Romney would be forced to defend the prospect of paying even less than his already low rate of 13.9 percent.
“Under that plan”—meaning Gingrich’s—”I’d have paid no taxes in the last two years,” Romney said, in one of his sharpest lines in the debate in Tampa last month.
Romney is similarly lukewarm, from the libertarian economic perspective, on the issue of the minimum wage. As in 2008, Romney favors automatic increases to keep pace with inflation. The right uniformly hates this idea—they think it will actually eliminate entry-level jobs and hurt the very people it’s trying to help.
As with his suspicious-seeming lurches toward the right to appease the social conservative base, Romney trims toward the center on sensitive economic issues to limit the appearance of rank plutocracy.
Steve Forbes tells Yahoo News: “It goes to show he’s still very defensive about his own wealth. All it does is give the base another reason to be unenthusiastic about him.”
At National Review Online, Andrew C. McCarthy likewise asserted that Romney was “doubling down on stupid to overcompensate for any hint of a compassion deficit.”
Hence my (momentary) twinge of sympathy for Romney. His ideological contortions, whichever direction they take him, land him in the same can’t-win cul-de-sac.
By: Scott Galupo, U. S. News and World Report, February 7, 2012
Does Right To Work Actually Lead to More Jobs?
A study by two economists sheds doubt on whether right-to-work laws are all they’re cracked up to be.
Most people watching the Super Bowl last night probably had no idea that only a few days before, in the same city of Indianapolis, Governor Mitch Daniels signed a law that will cripple unions. As I’ve written before, Indiana is the first Rust Belt state to pass a right-to-work law, which prohibits both mandatory union membership and collecting fees from non-members. The news, however, has hardly gotten the attention the labor-minded might have expected. Blame it on the big game or the GOP presidential primary. Or blame it on the loss of union power that allowed the law to pass in the first place.
Whatever the reason, this lack of stories has meant little discussion of the actual impact of right-to-work legislation. Daniels, along with many proponents of such measures, argues that companies choose to locate in right-to-work states rather than in states with powerful unions. And the Indiana governor says he’s already seeing the fruits of the newly passed law. Union advocates, meanwhile, say the laws decrease not only union power but also wages and workplace protections. According to conventional wisdom, it seems, the choice is between fewer good jobs and more cruddy jobs.
But according to Gordon Lafer, an economist at the University of Oregon’s Labor Education and Research Center, that’s a false choice. In fact, he says, there’s no evidence that right-to-work laws have any positive impact on employment or bringing back manufacturing jobs.
While 23 states have right-to-work legislation, Lafer says that to adequately judge the law’s impact in today’s economy, you have to look at states that passed the law after the United States embraced the North American Free Trade Agreement (NAFTA) and free trade in general. “Anything before the impact of NAFTA started to be felt in the late ’90s is meaningless in terms of what it can tell us,” he says.
Because of free-trade agreements, companies can go to other countries and get their goods made for a fraction of the cost. Even in the most anti-union state in the country, there are still basic worker protections and a minimum-wage law to deal with. Such “roadblocks” to corporate profit can disappear if the business relocates overseas. “The wage difference that right to work makes … is meaningless compared to the wage savings you can have leaving the country,” Lafer says.
Only one state has passed right to work since NAFTA: Oklahoma in 2001. (Before that, the most recent was Idaho in 1985.) About a year ago, Lafer and economist Sylvia Allegretto published a report for the Economic Policy Institute* exploring just what had happened in the decade since Oklahomans got their “right to work.” The results weren’t pretty.
Rather than increasing job opportunities, the state saw companies relocate out of Oklahoma. In high-tech industries and those service industries “dependent on consumer spending in the local economy” the laws appear to have actually damaged growth. At the end of the decade, 50,000 fewer Oklahoma residents had jobs in manufacturing. Perhaps most damning, Lafer and Allegretto could find no evidence that the legislation had a positive impact on employment rates.
“It will not bring new jobs in, but it will result in less wages and benefits for everybody including non-union workers,” says Lafer.
*Full disclosure: I was a writing fellow at the Economic Policy Institute in 2008.
By: Abby Rapoport, The American Prospect, February 6, 2012
From Wisconsin To Wall Street, An Economic Reckoning
The comparisons were inevitable. As Occupy Wall Street gathers momentum and new allies, progressives have quickly connected it with the other headline-grabbing uprising this year: The mass protests in Wisconsin against Gov. Scott Walker’s attack on labor unions. A statement from leaders of the American Federation of State, County, and Municipal Employees union, which endorsed Occupy Wall Street this week, was typical: “Just as a message was sent to politicians in Wisconsin, a clear message is now being sent to Wall Street: Priority number one should be rebuilding Main Street, not fueling the power of corporate CEOs and their marionette politicians.”
The essential theme connecting events in Madison and New York City is unmistakable. Both represent an economic reckoning at a time of grim unemployment rates and stagnant wages for middle-class Americans. “Both the defense of unions [in Wisconsin] and Occupy Wall Street, which is broader in its definition of the problem, are responding to two or three decades of increasing economic inequality and, until fairly recently, the inability of progressives to address those things,” says Georgetown University historian Michael Kazin, author of American Dreamers: How the Left Changed a Nation.
But the Wisconsin-Occupy Wall Street comparison is a more complicated one in its specifics. The two don’t fit neatly side by side and, in some ways, bear no resemblance at all. Here is a look at how two of the biggest populist protests of the year stack up:
The Organizers
As I reported from Madison in March, labor unions and community activist groups were, from the very beginning, the driving force in the Wisconsin protests. On November 3, 2010, the day after Republicans reclaimed the state Legislature and the governor’s mansion, union leaders began plotting how to respond to the looming assault on organized labor. And when Gov. Scott Walker unveiled his anti-union budget repair bill, and later threatened to sic the National Guard on those protesting his bill, unions marshaled their resources and called every member in their ranks. From their command center in Madison’s only unionized hotel, labor turned out more than a 100,000 supporters in a span of weeks.
Occupy Wall Street is not union-made. It was the anti-capitalist Adbusters magazine that put out the initial call for protesters to flood downtown Manhattan on September 17. Since then the protests have grown almost entirely without institutional support, an organic groundswell without leaders or executive boards or much structure at all. In recent days, unions have endorsed Occupy Wall Street, marched with them, and provided food, drinks, clothing, and more. But the protests remain a loosely organized, essentially leaderless effort.
Goals of the Movement
“Kill the bill! Kill the bill!” Wading among the crowd in Madison in February, you couldn’t go more than 10 minutes without that chant breaking out. It captured exactly what the protesters wanted: the death of Scott Walker’s anti-union bill. (They didn’t get it.) Later, those demands broadened to include fewer cuts to funding for education and social services by Walker and Wisconsin Republicans, but for much of the protests, it was perfectly clear what the angry cheeseheads wanted.
Occupy Wall Street so far has had no clear set of demands—and intentionally so, it seems. A post at OccupyWallSt.org demanded that supporters stop listing demands for fear of making protesters “look like extremist nut jobs.” The post went on, “You don’t speak for everyone in this.” The vague intentions have raised eyebrows, but they also have had the effect of welcoming a diverse group of supporters without alienating them. “The protesters have been eloquent in rejecting the idea that they produce ‘one demand’ and also in articulating in broad terms what they want,” says Robert Weissman, president of Public Citizen.
Spreading the Word
Like the protesters in Iran’s “Green Revolution” and Egypt’s Tahrir Square uprising, Wisconsin and Occupy Wall Street have made savvy use of social media for everything from rallying supporters and organizing marches to asking for food. Take Twitter: Both uprisings have built lively, if contentious, forums for debate with the hash tags #wiunion and #occupywallstreet. So many tweets poured in during Wednesday’s Occupy Wall Street march that it was impossible to keep up.
Other forms of online organizing have been pivotal. There are more than 230 Facebook pages promoting Occupy events from Tacoma, Washington, to Marfa, Texas, to Milwaukee, just as Facebook helped energize protesters in Wisconsin. And for those who couldn’t make it in person, livestreaming has brought supporters from around the country and the world closer to the action on the ground.
Laying Down the Law
Scott Walker’s bill exempted police officers from the most draconian crackdowns on workers’ rights. That put cops in a tight spot, because it was the job of the police to contain and, when necessary, crack down on the crowds of public workers who occupied the state Capitol rotunda and protested in the surrounding streets. But throughout the months-long protests, police arrested very few, allowed the occupiers to remain inside the Capitol for weeks, and generally treated angry demonstrators as best as could be hoped. Off-duty cops from around the state even joined the protesters in Madison.
Actions by law enforcement in Manhattan against Occupy Wall Street have at some turns been a very different story, with police crackdowns stealing the spotlight. This video of an NYPD deputy inspector using pepper spray on a handful of female protesters sparked outrage, added a streak of sensationalism to the story, and was picked up by mainstream news outlets. The arrest of more than 700 people who marched on the Brooklyn Bridge last weekend similarly made national headlines, leading to heaps of criticism and a class-action lawsuit against the NYPD.
Pizza for Protesters
Supporters called in pizza orders from around the world for the hearty crew of Capitol occupiers in Wisconsin. The same is happening for those camped out in Zuccotti Park, blocks from Wall Street. Pizza: It’s the nosh of choice for American uprisings in 2011.
By: Andy Kroll, Mother Jones, October 6, 2011
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