“Income Inequality Creates Huge Gaps In Opportunity”: The Class Divide Is One Of The Biggest Problems Now Facing The Country
By now, you’ve surely heard of the Texas drunken-driving case that has sparked national outrage — angering victims, upsetting psychologists and sending Twitter into overdrive. A 16-year-old who killed four people while intoxicated was sentenced to 10 years’ probation and treatment in a tony rehab facility.
As unusual as that example of mercy may be, it was the rationale offered by a defense expert that drove observers into a frenzy. A psychologist hired by defense attorneys told the court that the young man’s tragically irresponsible actions were the fault of his rich parents, who didn’t rear him with sufficient discipline. As a consequence, G. Dick Miller said, the teenager suffered from “affluenza” and didn’t know right from wrong. (Many other psychologists have disagreed vociferously, saying there is no such diagnosis.)
It’s hard to stomach that notion, especially since Judge Jean Boyd of the Fort Worth Juvenile Court seems to have swallowed it whole. I can’t imagine how bitter and resentful — not to mention mystified — the victims’ families must be.
But Boyd might have unintentionally done us a favor by opening the door to a dank, dark room that we have worked too hard to keep closed. She has let out the putrid aromas of economic inequality, which we have long ignored. Wealthy people, the judge’s sentence reminds us, have huge advantages over ordinary folk, despite an American mythology about equal opportunity. And the opportunity gap is growing as inequality cleaves the country into haves and have-nots.
The very terms “wage gap” and “disappearing middle class” have become clichés in Washington, often muttered by pandering politicians and comfortable journalists who have little real understanding of the effect that income inequality has had on the lives of ordinary Americans. But the fallout is real enough.
Since the 1970s, the wages of working-class Americans — those without college degrees — have stagnated and fallen further and further behind. Meanwhile, the wealthy have only become more prosperous.
Despite what you may believe to be true, the individual’s work ethic has little to do with those results. No matter how hardworking you are, a job at Walmart won’t give you much in the way of financial security. And if you are born to parents who can give you a trust fund, it doesn’t matter how little you work; you’ll still have plenty of security.
The trends that have eaten away at the great American middle — including globalization and technological gains — have been evident for decades, but the Great Recession accelerated the consequences. Even as economic data show huge gains in productivity, the jobless rate remains high, stuck at around 7 percent. (Translation: Companies have found ways to get more and more work done with technology, whether it’s through eliminating bank tellers and installing more ATMs, or using more robots in factories.)
This is a complex problem with no easy answers, but we could make a start toward solutions by looking squarely at the issue and refusing to call it by other names. Here are a few things it’s not: indolence, racism, the failure of the welfare state.
Mitt Romney became appropriately infamous for his condescending dismissal of the “47 percent” who he claimed don’t want to work, but that wrong-headed idea doesn’t stop with Romney. U.S. Rep. Jack Kingston (R-GA), running for the GOP nomination for the U.S. Senate, has proposed that poor children sweep school cafeteria floors in exchange for free or reduced lunches, a deal that would get the “myth out of their head that there is such a thing as a free lunch,” he said.
But liberals often get it wrong, too — confusing rampant income inequality with racism. The legacy of racism has certainly contributed to the wealth gap between black and white Americans, but class is now a bigger factor in a child’s future than race. President Obama’s children are virtually assured a bright future, while millions of their cohort among the working classes are not.
The class divide is one of the biggest problems now facing the country, and it’s time we started to confront it. Judge Boyd’s unjust sentence is just the provocation to force us to take it on.
By: Cynthia Tucker, The National Memo, December 28, 2013
“Sometimes Things Don’t Work Out As Planned”: UPS’s Christmas Screw Up Is Comeuppance For Private-Sector Triumphalists
At the heart of the great big pile-on of ridicule for the flawed healthcare.gov rollout the past few months was a large helping of private-sector triumphalism. Just imagine, the chorus went, if tech giants like Amazon or Google had been in charge of the Web site instead of those clueless, fusty bureaucrats – first, the problems would not have happened in the first place, but even if they had, the private sector would have held those responsible for the mistakes to account.
Bret Stephens wrote an entire column in the Wall Street Journal listing all the ways that the kludgy healthcare.gov launch had failed to live up to Amazonian standards: “For an ‘Amazon-like’ experience, it isn’t enough to have a website that functions on the front end, the back end and in between. Nor is it enough to have a site that can handle 800,000 users a day without crashing, as the administration now boasts of the health site. Amazon.com handled 26.5 million purchases on Nov. 26, 2012, a company record and a rate of 306 items per second. You also need an Amazon-like culture, which is the product of other Amazon-like realities. Such as: Jeff Bezos as the boss, demanding results and innovation from his employees, providing results and satisfaction for his customers and shareholders.” California congresswoman Anne Eshoo, a Democrat, questioned the contractors’ excuse that the website’s problems had been exacerbated by the large number of visitors after the launch: “There are thousands of websites that handle concurrent volumes far larger than what HealthCare.gov was faced with,” she said. “Amazon and eBay don’t crash the week before Christmas, and ProFlowers doesn’t crash on Valentine’s Day.” And the Washington Examiner’s Philip Klein mocked healthcare.gov’s performance by noting that during the 2011 holiday shopping season, “nearly half of [large retail] websites (such as Amazon and eBay) were up 100 percent of the time. The lowest performing was Foot Locker, which was at 98.573 percent.” He added: “Imagine what a disaster it would be for sales if, during the holiday shopping season, Amazon’s website were down for about a day and a half.”
Yes, just imagine the disaster: the presents might not make it to people’s homes on time!
Oh, wait, what’s this I see in today’s papers?
A surge in online shopping this holiday season left stores breaking promises to deliver packages by Christmas, suggesting that retailers and shipping companies still haven’t fully figured out consumers’ buying patterns in the Internet era. Companies from Amazon.com Inc. to Kohl’s Corp. and Wal-Mart Stores Inc., having promised to deliver items before Dec. 25, missed some delivery target dates. United Parcel Service Inc. determined late Tuesday that it wouldn’t deliver some goods in time for Christmas, as a spike in last-minute shopping overwhelmed its system. “The volume of air packages in the UPS system did exceed capacity as demand was much greater than our forecast,” a UPS spokeswoman said…. Although weather, Web glitches and late deliveries from manufacturers played a part in late deliveries, the sheer unanticipated volume of holiday buying this year may have been the biggest problem, retail analysts said.
…In notifications to some Amazon customers, UPS said there were some shipping delays because it had “not yet received the package from the shipper.” “Amazon fulfillment centers processed and tendered customer orders to delivery carriers on time for holiday delivery,” said an Amazon spokeswoman Wednesday. “We are reviewing the performance of the delivery carriers.” The spokeswoman also said Amazon refunded any shipping charges associated with the impacted shipment and provided a $20 gift card. She declined to say how many customers had been impacted or offered such a rebate.
On Christmas Eve, Brandon Scott was still waiting for a 46-inch Samsung TV and Kate Spade watch he ordered from Amazon on Saturday. “I’m frustrated because these items could have easily been purchased at various retailers in my area, something I would have gladly done had Amazon not ‘guaranteed’ their arrival before Christmas,” said Mr. Scott, of Ann Arbor, Mich.
Well, then. There’s little schadenfreude to be had in people being left empty-handed of presents to give their family and friends, or in underpaid, overworked warehouse employees and drivers rushing unsuccessfully to get the goods to their destinations on time. And as my colleague Jonathan Cohn noted recently, the comparison between healthcare.gov and Amazon was deeply flawed from the outset. But still, the Great Christmas Delivery Screwup of 2013 should inject a bit of perspective and humility into the ranks of the loudest private-sector champions. The fact is, the clichés are true: life is complicated, stuff happens and sometimes things don’t work out as planned. As amazing and wonderful as technology is, there are still limits to what is possible in narrow windows of time – sometimes you just need a few more weeks to get the complex new health insurance Web site for 36 states working properly, or you just run out of hours to beat Santa to the house – to millions and millions of houses. (And sometimes it’s not just the government web site that struggles with keeping personal information secure, but also one of the largest retailers in the country, in a breach far wider and more potentially damaging than anything that has happened with healthcare.gov.)
So, how about it: if not an outright truce, maybe some de-escalation of the anti-government triumphalism. And a little forgiveness all around. Happy Boxing Day.
By: Alec MacGinnis, The New Republic, December 26, 2013
“What Would Jesus Cut?”: Republicans Should Listen To Pope Francis’ Economic Message
Usually poverty gets less attention from the media than global warming, which gets very little. Now the problem is on the front pages and trending on Twitter. Two weeks ago, Pope Francis issued a plea for income equality, and it was President Obama’s turn to discuss poverty last week. Underpaid workers are mounting protests against Wal-Mart and the fast food industry. New Jersey, the District of Columbia and many municipalities have recently increased the minimum wage within their jurisdictions.
Middle-class families are mired in debt because their incomes haven’t increased in the last 20 years while college, energy and health care costs have skyrocketed. Meanwhile, economic royalists are reaping the benefits of trickle-down economics as they harvest the lion’s share of income growth.
The concentration of wealth has become such a problem that wealth is even concentrated among the wealthy. In the recent Forbes list of top earners, 6 of the richest 10 Americans were either Kochs or Waltons. You will find a family portrait of the Waltons beside the word selfish in the dictionary. The Walton family makes billions of dollars every year, but they can’t reach deep enough into their pockets to pay the employees at Wal-Mart a living wage.
Two weeks ago, the pope made a strong statement about the evils of poverty. Pope Francis said “trickle down” economics is a “crude naïve belief in the goodness of those wielding economic power.” Francis wasn’t the first pope to weigh in on poverty. In the shade of economic abuses during the industrial age, Pope Pius VIII called for a “living wage” in his 1891 message “Rerum Novarum,” which roughly translates from Latin into English as “On the New World.” The economic deprivations of our time resemble the abuses of that era. Modern conservatives might note that the abuses of the industrial age led to the progressive populist presidencies of Teddy Roosevelt and Woodrow Wilson. The policies of those two presidents were the foundation of Franklin Roosevelt’s New Deal.
Pope Francis’s pronouncement was strong enough to generate an attack from Rush Limbaugh, who described the pontiff’s statement as “Marxist dogma.” Limbaugh should be more careful about calling people names, because if the pope is a Marxist so is Jesus. I don’t know if Rush ever reads the Bible, but he might want to check out the Sermon on the Mount in the Gospel of St. Matthew. In the sermon, Jesus said, “Blessed are the poor in spirit; for theirs is the Kingdom of Heaven”.
I went to Holy Cross High School in Flushing, Queens, in New York City. Flushing was the home of the famous blue collar fictional TV conservative, Archie Bunker. If Archie had had a talk radio show, he would have been Rush Limbaugh. Many of my schoolmates were from families like Archie’s and had the same conservative beliefs.
One of my teachers was Brother Anthony Pepe. Brother Anthony was not preaching to the choir when he taught that the Gospel of St. Matthew was the gospel of social justice. I don’t know if the good brother had an impact on my conservative classmates, but he made a strong impression on me. Jesus made it pretty clear the only people going to heaven were those who cared for the sick, hungry and infirm.
If tea partiers like Rep. Paul Ryan, R-Wis., want to accuse Jesus of waging class warfare, so be it. The flip side of the Gospel of St. Matthew is Ryan’s path to poverty budget. The Ryan budget would decimate social programs crucial to the lives of middle-class families and the survival of poor families. Ryan says his opposition to abortion is based is based on his Catholic faith but he completely ignores his church’s teaching on poverty. I hope he paid attention to his spiritual leader when he spoke about the dangers of “unfettered capitalism” last month.
By: Brad Bannon, U. S. News and World Report, December 9, 2013
“Yes, McDonald’s Can Do Better”: More Than Greed, Profitable Fast Food Companies Could Pay A Living Wage
When I was 18, I spent a year and change flipping burgers in one of those restaurants where customers eat from a tray balanced across their car windows. It was one of the three jobs I held at the time, affording a simple budget and enough left over to save up to go to college after a couple of years. I put in hard hours for my employer and it eventually worked out just fine for me. It also makes for a nice story, but one that is embarrassingly dated. The fast food industry in which I worked is not the fast food industry of America today—just ask the thousands of workers on the streets, standing up for same opportunity to get by and get ahead that built the American Dream.
For today’s fast food work force, erratic scheduling makes holding down more than one job impossible—you can’t commit to a second employer if you’re on call for the first. At the same time, low wages barely cover basic household needs, leaving millions of workers in poverty despite being employed, and making saving for the future impossible. And the 18-year-old serving your root beer float? Now she is 29, and likely to have been to college and have a family to support.
What else has changed since I was behind the counter? Oh yeah, fast food companies are making more money than ever.
In our report “A Higher Wage is Possible,” my co-author Amy Traub and I show how Wal-Mart could meet worker demands for a fair wage without passing costs onto consumers. Every year, Wal-Mart directs a portion of its profits to buying back its own public stock, consolidating ownership and increasing earnings per share. If they used that money to invest in their workforce instead, Wal-Mart could offer a raise of $5.83 per hour to all of its 825,000 low wage workers. In addition to pulling thousands of families out of poverty, Wal-Mart would see lower turnover and higher productivity and contribute to economic growth that benefits Wal-Mart, retail, and the economy overall.
Share repurchases have become an increasingly popular business strategy. Last year, McDonald’s Corp spent $2.6 billion on them. YUM! Brands Inc, which includes Taco Bell, KFC, and Pizza Hut, spent $965 million. But while the long term value of buying back shares accrue mainly to those executives whose compensation is tied to stock performance, using that money to invest in the workforce would have benefits that apply to all stakeholders—workers, customers, communities, and shareholders too.
A quick calculation shows that McDonald’s and Yum could give raises of $2 to $3 per hour to every U.S. worker at their restaurant locations using just the money they now spend buying back shares. Since the details of their corporate pay structures are not public record, that is a raise applied to even the workers already earning above the threshold of $15 demanded on the streets. If we broke out the low-wage workers, or added in the billions in additional money paid to dividends each year, that raise could go even higher—without costing customers a dime.
There are lots of good reasons why fast food employers should do better for their workforce. It’s a win-win situation for everyone with a stake in the economy—and that is everyone. Moreover, fast food can do better, by using the money now syphoned to the top to invest in their workers and grow the economy.
To people like me who made their way through jobs similar to those of the workers on the street yesterday, the cripplingly poor terms of employment in today’s fast food industry look like more than just greed. It looks like the end of opportunity and the exchange of performance on paper for the substance of the American Dream.
By: Catherine Ruetschlin, The American Prospect, December 6, 2013
“Higher Wages Are Good For Companies Too”: The Intellectual Rigors Of Low-Wage Work Are Too Frequently Dismissed
Barbara Gertz is 25 and works at a Walmart in Aurora, Colorado, stocking shelves on the overnight shift. She and her husband, a cement mason, can get by most months, but there have been days Barbara has called in sick because she can’t afford the gas to drive to work.
Higher wages would obviously benefit Barbara and her colleagues at Walmart who protested last Friday. They would also benefit fast food workers striking tomorrow in 100 cities across the country who earn, on average, $11,000 a year.
But according to Zeynep Ton, an adjunct professor at MIT Sloan School of Management, higher wages are better for companies, too.
Ton’s book, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits, comes out in January and in it, she describes how large retail companies like Mercadona, Trader Joe’s and Costco have been able to invest in workers without raising prices. “These companies think about employees not as costs to minimize but as capable human beings with the potential to generate sales and profits,” Ton recently wrote on her blog. “Doesn’t all this cost a lot? Of course it does. But that’s only part of the strategy. These companies also design and manage work in a way that makes their employees more productive and takes full advantage of a committed, motivated, and capable (that is, well-paid, well-trained, and well-treated) workforce.”
Here’s one of Ton’s favorite examples of why the so-called Good Jobs Strategy works: During the recession, both Walmart and Mercadona, Spain’s largest supermarket chain, had to cut costs and did so by reducing the variety of products they carried. Walmart customers were annoyed when their local store stopped carrying their favorite brand of potato chip, or toilet paper or T-shirt. Sales dropped; Walmart’s chief merchandising officer had to leave the company. At Mercadona, customers were unfazed if an item they wanted was out of stock because workers, who as a matter of company policy are trained in every department, were able to recommend a replacement. Sales figures increased, even after Mercadona reduced its prices by 10 percent. Workers would let management know if there was a particular product that too many customers seemed to miss. “They could do this because they are empowered, cross-trained and have the time to engage the customer,” Ton writes. By comparison, Barbara told me that “there’s just a total lack of respect” for associates at Walmart. She mentioned a friend who politely pointed out an inventory problem to her supervisor and was fired the next day for the very mistake she tried to correct.
Ton’s argument is that workers who are paid fairly and treated respectfully are more productive and more innovative, across industries and on all salary levels, at Google or at Walmart. “Low-cost retail work is not trivial and how you perform that work makes a big difference for the company’s bottom line,” Ton has written. Retail work requires intuition and charm, quick decision-making, a good memory. As Mike Rose, an education professor at UCLA, has eloquently written the intellectual rigors of low-wage work are too frequently dismissed.
Ton’s Good Jobs Strategy also applies to fast food industry. In-N-Out Burger, the cultishly beloved West Coast hamburger chain, is a good example. The starting wage is $10.50 per hour, significantly higher than at McDonald’s. They have the lowest turnover rate in the fast-food industry. Like Mercadona and Trader Joe’s, In-N-Out keeps overhead low by limiting their offerings, by doing just a few things—hamburgers, cheeseburgers, milkshakes—really, really well.
With more than half of fast food workers on public assistance, costing taxpayers an estimated $7 billion a year, the demands of Thursday’s strike is in the public’s best interest as well. On Tuesday, the Washington, DC, Council voted to increase the minimum wage to $11.50 per hour and to extend paid sick leave to tipped workers, having found, despite theories to the contrary, that such a policy does not discourage new businesses from opening or cause preexisting businesses to relocate. President Obama recently endorsed raising the federal minimum wage to $10.10 an hour.
If political pressure and public protest don’t cause McDonald’s and Walmart to increase worker pay, perhaps pure profit-driven thinking will. After all, what if Barbara had to call in sick on one of the busiest days of the year?
By: Jessica Weisberg, The Nation, December 4, 2013
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 