“Life Is Too Short”: Typical American Worker Would Need 244 Years To Match CEO’s Annual Salary
The average CEO made $9.6 million in 2011, even as workers’ wages remained stagnant and unemployment hovered nationally around 8 percent. Chief Executive Officers are being paid at the highest-ever rate since the AP started tracking the figure in 2006, according to a new report from the news organization.
But while CEOs may be reaping the rewards of higher profits and a growing stock market, very little of that achievement spreads as far as the average worker — or even the company’s stockholders:
Profit at companies in the Standard & Poor’s 500 stock index rose 16 percent last year, remarkable in an economy that grew more slowly than expected.
CEOs managed to sell more, and squeeze more profit from each sale, despite problems ranging from a downgrade of the U.S. credit rating to an economic slowdown in China and Europe’s neverending debt crisis.
Still, there wasn’t much immediate benefit for the shareholders. The S&P 500 ended the year unchanged from where it started. Including dividends, the index returned a slender 2 percent.
As the AP noted, “the typical American worker would have to labor for 244 years to make what the typical boss of a big public company makes in one.”
Growing CEO pay is contributing to the larger trend of increasing income inequality — CEO pay increased 127 times faster than the average worker pay over the last 30 years, and the average Fortune 500 CEO made 380 times what the average worker did last year. Fortune 500 companies made a record $824 billion in 2011.
By: Annie-Rose Strasser, Think Progress, May 25, 2012
“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
“A Tsunami Of Anti-Union Legislation”: The GOP’s State And National Assault On Labor Rights
The past 15 months have seen a remarkable assault by the GOP on federal labor rights.
Republicans have introduced numerous bills designed to undermine the National Labor Relations Act, all with wonderfully deceptive names suggesting they would strengthen the rights of ordinary workers: Workforce Democracy and Fairness Act, Protecting Jobs from Government Interference Act, Employee Rights Act, Jobs Protection Act, Employee Workplace Freedom Act, Secret Ballot Protection Act, National Right to Work Act, Truth in Employment Act, National Labor Relations Reorganization Act, and others.
Republicans on the federal level have also attempted to defund and abolish the National Labor Relations Board, subjected its Democratic members to repeated subpoenas and requests for information, protested President Obama’s recess appointments to the board, joined lawsuits by corporate and anti-union organizations and threatened Congressional Review Acts – which could happen within weeks – to block the implementation of new board rules streamlining union certification elections and requiring notice posting on federal labor rights.
Rarely, if ever, has the board, and the rights it enforces, been subjected to such relentless attacks. And the attacks continue. While impressive, this assault on federal labor rights pales in comparison to what has been happening – occasionally in full view, but mostly with little notice – at the state level. Almost everyone knows about the 2011 legislation stripping public sector workers of collective bargaining rights in Wisconsin and Ohio, and Indiana’s 2012 “right-to-work” (RTW) legislation, which outlaws union security agreements.
However, the sheer number of anti-union bills supported by GOP-controlled legislatures demonstrates the breadth and depth of the party’s anti-unionism. So what is happening in the states?
In addition to Indiana, at least 18 other states have considered RTW measures. South Carolina and Tennessee passed bills strengthening RTW legislation that has been on the books for six decades, while another RTW state, Virginia, attempted to write RTW into its constitution. And last week, the New Hampshire House passed a RTW bill identical to one vetoed last year by the state’s Democratic governor. Other states that may act on RTW this year — sometimes over the wishes of the GOP establishment — through legislation or ballot initiatives include Maine, Michigan, Minnesota and Ohio.
In addition to high-profile bills in Wisconsin and Ohio, at least 13 other states have considered legislation that would eliminate or restrict public sector collective bargaining. New Jersey eliminated public sector bargaining over health benefits, Oklahoma outlawed collective bargaining for municipal employees, and Tennessee replaced bargaining for public school teachers with “collaborative conferencing.” And at least 14 states have considered legislation that would ban public employers from deducting union dues from employees’ paychecks, thereby making it difficult for unions to finance their basic activities. Last week, Michigan Gov. Rick Snyder signed a measure prohibiting public schools from deducting union dues from the paychecks of teachers and other employees.
Many Republican legislatures have promoted bills that, while not directly attacking labor rights, are clearly intended to weaken unions, including unions in the building trades and public schools. 14 states have introduced legislation restricting Project Labor Agreements, and 11 have bills attacking prevailing wage laws, both of which protect building trades standards.
At least 28 states have considered charter school and voucher bills that would weaken public school unions, and others have bills privatizing most schools services, along with bills privatizing transportation, water supply, port authorities, airport security, liquor distribution, prisons and prison medical services, Medicaid delivery, state park vendors, kindergarten development and evaluation, and every municipal service imaginable.
At least 10 states have introduced so-called “paycheck protection” measures, which are designed to place strict limits on the use of union dues money for political purposes, while placing few, if any, restrictions on corporate political spending. Alabama, Arizona and North Carolina passed paycheck measures in 2011 – though all three bills have been challenged in the courts – while California and New Jersey have upcoming paycheck ballot initiatives.
Deception dominates in the messaging on state bills. California’s paycheck ballot initiative is ludicrously misnamed “Stop Special Interest Money Now.” Backers of the bill, the ultra-conservative Lincoln Club of Orange County, co-produced “Hillary: The Movie,” which led to the Supreme Court’s Citizens United decision. The Lincoln Club welcomed Citizens United as a “victory for free speech,” but now claims that its measure is a balanced effort to remove all special interest money from state elections, to the extent allowed by federal law. In reality, it would undermine the ability of unions to engage in core political activities but have almost no impact on corporate political spending.
This type of obfuscation is central to Republicans’ anti-union strategy. If the party were unable to hide behind deceptive messaging, it would be exposed as a front for the American Legislative Exchange Council and other extreme organizations.
And finally: not one new job has been created by this tsunami of anti-union legislation.
“Drug-Addled Wrong”: Mitt Romney Condemns The Auto-Industry Rescue
Looking back over the last three years, there’s arguably no better example of a policy Republicans got wrong than the rescue of the American auto industry.
When President Obama launched his ambitious policy in 2009, he was taking a major gamble — not only with the backbone of American manufacturing, but with his presidency and its ability to use the power of government to repair a private industry facing collapse. As First Read noted at the time, “As the GM bailout goes, so goes the Obama presidency.”
We now know the gamble paid off. Chrysler has posted its first profit in 15 years; GM is building new American facilities; and plants are operating at a capacity unseen in a long while. General Motors went from the brink of total failure to reclaiming its spot as the world’s top automaker, and as the Wall Street Journal reported earlier this month, “The auto industry hasn’t just turned the corner. It’s starting to accelerate.”
Had it not been for the Obama administration’s policy, these heartening headlines would have been impossible. And yet, Mitt Romney still isn’t happy.
In a new Detroit News op-ed, the former Massachusetts governor says he’s glad the industry still exists, but proceeds to complain anyway about the way in which Obama rescued GM and Chrysler from an imminent collapse.
Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.
Instead of doing the right thing and standing up to union bosses, Obama rewarded them…. By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.
It takes a fair amount of chutzpah to face a crisis, get it wrong, then whine about the way in which the other guy got it right.
This is a subject Romney would be better off ignoring. After all, in 2009, he famously urged policymakers to “let Detroit go bankrupt.” Romney was so certain Obama’s policy would fail, he said Americans could “kiss the American automotive industry goodbye” if Obama’s policy moved forward in 2009. Indeed, at the time, Romney called the administration’s plan “tragic” and “a very sad circumstance for this country.” He wrote an April 2009 piece in which he said Obama’s plan “would make GM the living dead.”
With the benefit of hindsight, we now know all of Romney’s warnings were wrong. For him to double down today on the virtues of letting Detroit go bankrupt is just bizarre.
I’m reminded of this clip, which Democrats gleefully put together last summer.
Of particular interest is the last quote in the clip, in which a Chrysler executive responded to a Romney quote by saying, “Whoever told you that is smoking illegal material. That market had become absolutely dysfunctional in 2008 and 2009. There were attempts made by a variety of people to find strategic alliances with other car makers on a global scale and the government stepped in, as the actor of last resort. It had to do it because the consequences would have been just too large to deal with.”
In other words, Romney wasn’t just wrong; he was drug-addled wrong.
To be sure, the former governor wasn’t the only Obama critic whose predictions now look foolish, but Romney is the one who still likes to pretend he was right.
Even the complaints themselves are strange. As Marcy Wheeler explained, Romney’s “basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised. He’s pissed they got to keep their healthcare. He’s also complaining that banks took a haircut.”
I haven’t talked to the White House about this, but I suspect if 2012 comes down to a debate over who was right about the auto-industry rescue, Obama likes his chances.
By: Steve Benen, The Maddow Blog, February 14, 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
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