Count on America’s venal financial class to engage unironic self parody. According to a recent CNBC report, Goldman Sachs, one of the largest financial institutions in the world, asked whether the use of cutting-edge genetic therapy to cure patients is a “sustainable business model”: Continue reading
As much of the country laments the demise of Toys R Us — a source of much nostalgia for generations of Americans since the late 1950s — it is worth taking a look at one way the company tried to climb out of bankruptcy just a few months prior: giving its top executives millions of dollars. Quoting a December 2017 article of USA Today: Continue reading
By now, it is well established that capitalism is fundamentally built upon threats of force. As libertarian philosophers Robert Nozick and Matt Zwolinski have explained, the only way to turn unowned natural resources (such as land, minerals and other goods) into privately owned property is by violently preventing all others from using them. This one-sided exclusion destroys freedom of movement and cuts many people off from the things that they need to survive.
When the physical resources necessary for production are privately held in the hands of very few, as in the United States, the majority of the population is forced to submit itself to well-financed employers in order to live. The precarious position of most workers in this position — desperate for employment but aware that they could lose their jobs at any time — is coercive on its face and susceptible to exploitation and abuse.
Labor protection in the form of safety laws, collective bargaining and prohibitions against harassment and discrimination have helped cut down on many of the worst employer abuses. But no amount of labor regulation can ever undo the fact that workers are confronted daily with the choice between obeying a supervisor or losing all their income. The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that working-age adults, at least, have some way to support themselves whether they work or not….
….True freedom requires freedom from destitution and freedom from the demands of the employer. Capitalism ensures neither, but a universal basic income, if successful, could provide both.
— Matt Bruenig, “Tired of Capitalism? There could be a better way“. The Washington Post.
From the Economic Policy Institute (EPI) comes the ever-important reminder of how the U.S. economy, for all its size and relatively robust growth, has failed to benefit the average worker.
Between 2000 and the second quarter of 2015, the share of income generated by corporations that went to workers’ wages (instead of going to capital incomes like profits) declined from 82.3 percent to 75.5 percent, as the figure shows. This 6.8 percentage-point decline in labor’s share of corporate income might not seem like a lot, but if labor’s share had not fallen this much, employees in the corporate sector would have $535 billion more in their paychecks today. If this amount was spread over the entire labor force (not just corporate sector employees) this would translate into a $3,770 raise for each worker.
Here is a visual of the data, which shows just how wide the gap is by historical standards. Continue reading
Amid demonstrations and public pressure by lowly paid fast food workers, the state of New York has become the latest jurisdiction to increase the minimum wage, this time to $15 an hour. In response, many grumbled upon the unfairness of having burger flippers and fry cooks make as much as EMTs, firefighters, and other “more important” occupations.
In response to this pushback, a paramedic publicly shared his own thoughts on the matter, which have since gone viral. Here it is in its entirety.
Fast food workers in NY just won a $15/hr wage.
I’m a paramedic. My job requires a broad set of skills: interpersonal, medical, and technical skills, as well as the crucial skill of performing under pressure. I often make decisions on my own, in seconds, under chaotic circumstances, that impact people’s health and lives. I make $15/hr.
And these burger flippers think they deserve as much as me?
Good for them.
Look, if any job is going to take up someone’s life, it deserves a living wage. If a job exists and you have to hire someone to do it, they deserve a living wage. End of story. There’s a lot of talk going around my workplace along the lines of, “These guys with no education and no skills think they deserve as much as us? Fuck those guys.” And elsewhere on FB: “I’m a licensed electrician, I make $13/hr, fuck these burger flippers.”
And that’s exactly what the bosses want! They want us fighting over who has the bigger pile of crumbs so we don’t realize they made off with almost the whole damn cake. Why are you angry about fast food workers making two bucks more an hour when your CEO makes four hundred TIMES what you do? It’s in the bosses’ interests to keep your anger directed downward, at the poor people who are just trying to get by, like you, rather than at the rich assholes who consume almost everything we produce and give next to nothing for it.
My company, as they’re so fond of telling us in boosterist emails, cleared 1.3 billion dollars last year. They expect guys supporting families on 26-27k/year to applaud that. And that’s to say nothing of the techs and janitors and cashiers and bed pushers who make even less than us, but are as absolutely crucial to making a hospital work as the fucking CEO or the neurosurgeons. Can they pay us more? Absolutely. But why would they? No one’s making them.
The workers in NY made them. They fought for and won a living wage. So how incredibly petty and counterproductive is it to fuss that their pile of crumbs is bigger than ours? Put that energy elsewhere. Organize. Fight. Win.
Writing for EMS1.com, an online network for emergency medical services (EMS) personnel, Arthur Hsieh weighed into the subsequent debate about who deserves a decent salary or wage.
Given the mounting hardship and misery that has become common in most Americans’ working lives, one cannot help wonder why we have yet to take action — where are the strikes, demonstrations, unionizings, and other forms of pushback?How many more years of income stagnation, inequality, and stress can the majority of workers take? How much more difficult do things need to get?
As one of the fastest-growing industries in the country, food service — along with other low-paying sectors like retail and hospitality — is becoming the new normal of employment.
But as the following list from the Washington Post shows, this is a troubling trend, as many Americans do not realize what little the industry has to offer to its burgeoning and increasingly desperate labor force.
1. Fast-food workers are mostly teenagers working for pocket money.
Fast food was indeed an adolescent gig in the 1950s and 1960s, when the paper hat symbolized the classic short-term, entry-level job. But today, despite arguments that these low-wage jobs are largely filled by “suburban teenagers,” as the Heritage Foundation put it, labor data show that about 70 percent of the fast-food workforce is at least 20 years old. The typical burger-flipper is an independent adult of about 29, with a high school diploma. Nearly a third have some college experience, and many are single parents raising families on $9 an hour. In contrast to McDonald’s rather optimistic model budget — which assumes that an employee lives in a two-income household and doesn’t need child care or gas or groceries — a large portion of fast-food workers are forced to borrow from friends to cover basic household expenses, or sometimes fall into homelessness.
According to researchers at the University of California at Berkeley, about half of the families of front-line fast-food workers depend on public programs, compared with 25 percent of the American workforce. About 87 percent of fast-food workers lack employer health benefits, compared with 40 percent of the general workforce. And roughly one-fifth of workers’ families are below the poverty line. That adds up to some $7 billion in welfare payouts each year — essentially enabling fast-food mega-chains to subsidize ultra-low wages with public benefits.2. Employees can work their way up and eventually even own a franchise.
Burger King’s career Web site proclaims: “You’ll never be short of opportunities to show what you’ve got. And if we like what we see, there’s no limit to how far you could go here.” The New York Restaurant Association boasts that restaurant work “creates an opportunity for people to live the American dream.” Under its franchise “success stories,” McDonald’s features a man who advanced from being a crew member to owning a franchise in just a few years.
The dream of upward mobility, however, eludes most workers. The National Employment Law Project (NELP) points out that about 90 percent of the fast-food workforce is made up of “front-line workers” such as line cooks and cashiers. About 9 percent are lower-level supervisors, who earn about $13 an hour. And just 2.2 percent of fast-food jobs are “managerial, professional, and technical occupations,” compared with 31 percent of jobs in the U.S. economy.
As for the notion of working your way up to ownership, NELP reports that 1 percent of the fast-food workforce owns a franchise — a purchase that could require $750,000 to several million dollars in financial assets. And there’s no indication that many of these franchisees actually did “rise through the ranks” to become owners, which requires an amount of capital that might top the lifetime salary of an average kitchen worker.
3. Fast-food companies can’t control franchise wages or working conditions.
McDonald’s plan to raise wages at least $1 over the local minimum wagewas announced this month to much fanfare. But the raise applies only to employees of the 1,500 stores McDonald’s owns directly. The company contends that as a chain franchisor, it merely licenses its brand to individual franchise operators; is not legally liable as an employer; and thus “does not direct or co-determine the hiring, termination, wages, hours” and other working conditions for all who toil under the golden arches.
But critics say these fast-food chains actually exert powerful oversight over their franchisees by closely tracking their spending and operations. Domino’s, one franchisee claims, critiqued how his employees answered the phone; Burger King franchisees sued the chain in 2009, claiming that it was forcing them to sell menu items for a loss at $1. Companies often pressure owner-operators to squeeze down labor costs: According to one employee quoted in the Guardian, “McDonald’s corporate representatives turn up at the restaurant where he works five or six times a year, counting the number of cars using the drive-through service, timing sales, making sure staff are preparing food according to McDonald’s specifications.” More so than most fast-food chains, McDonald’s wields financial control over its franchisees and owns the rental real estate of the restaurants.Former McDonald’s executive Richard Adams has said: “McDonald’s franchisees are pretty compliant. They don’t really organize, they don’t really protest. And if you do, they tell you you’re not a good member of the McFamily. I don’t want to make this seem too Orwellian, but the average franchisee has about six restaurants, and the franchise agreement is for 20 years. You’re probably going to have a renewal coming up. If you’re not a compliant member of the team, you’re probably not going to get that renewal.”
The issue of whether McDonald’s can be labeled a “joint employer” is being litigated in numerous claims of unfair labor practices that workers have filed with the National Labor Relations Board. The NLRB’s general counsel recently deemed McDonald’s a joint employer, and if it is ultimately penalized as such, workers could see a dramatic expansion in the company’s legal and regulatory obligations.
4. Flipping burgers is an easy job.
Some people chafe at the idea of “unskilled” fast-food workers meriting a wage more suited to a “high-skilled” job. Not only does this ignore the fact that this work requires skills — from managing inventory to training and supervising other employees — it also disregards the day-to-day challenges workers navigate on the job. According to a slew of complaints filed with the Occupational Safety and Health Administration, workers often suffer injuries such as hot-oil burns and are sometimes denied proper medical care. (Some are told to dress wounds with condiments.) Violence is also common at fast-food restaurants; according to a recent survey, roughly one in eight workers reported being assaulted at work in the past year.
Workers have also complained of racial discrimination, sexual harassment and retaliatory punishment by management. More than 40 of the NLRB claims filed against McDonald’s in the past few years alleged illegal firings or penalties because of workers’ engagement in labor activism. Add to all of this the challenge of just getting paid: Subway was found guilty of 17,000separate wage and hour violations since 2000, and in 2013, Taco Bell was hit with a $2.5 million settlement in a class-action lawsuit over unpaid overtime.
5. Paying workers $15 an hour would make burgers prohibitively costly and hurt the industry.
Some analysts, particularly on the right, have laid out doomsday scenarios of massive economic disruption caused by a sudden doubling of wages in the fast-food industry. The Heritage Foundation argues that raising wages to $15 an hour could lead to a price spike, shrinking job opportunities, and huge drops in sales and profits . In reality, any such wage increase would probably be incremental and could be absorbed in large part by lowering the fees collected by parent companies from franchisees. Fast-food workers already enjoy such higher pay in other countries with strong labor regulation and union representation. A Big Mac in New Zealand costs less than one in the United States — $4.49 vs. $4.79, according to the Economist’s Big Mac index — and it’ll likely be served by a full-time union worker earning about $12 per hour.
Higher wages might also bring business benefits, in the form of lower turnover and good press. The Michigan-based fast-casual restaurant Moo Cluck Moo offers a $15 wage alongside premium grass-fed burgers, turning its reputation as a socially responsible employer into a selling point. The market for super-cheap fast food is apparently declining. Consumers just might be hungry for a more conscientious business model.
That is basically the sum of Americans’ attitudes towards large corporations, according to a survey conducted by CNBC and public relations firm Burson-Marsteller. It gathered the responses of about 25,000 participants from 25 countries, including both rich and developing economies, regarding big business, its relationship with government, and similar issues (note that results for developing countries are skewed towards the wealthier and better educated citizens with computer access, and thus may be less representative — you can find the full report here).
The results, reported by the New York Times, were interesting in their nuance: although famously pro-business, Americans were nonetheless pretty skeptical when it came to the confluence of business and politics. When asked whether corporations have too much, too little, or just the right amount of influence over the country’s economic future, 48 percent of Americans chose “too much” — roughly the median between China, the lowest scorer at 24 percent, and Brazil, the highest at 63 percent.
Countries that are more concerned than America about big business’ role on economic future include the U.K., France, India, Japan, the Netherlands, Singapore, and Russia; among those that express more reservations than the U.S. are Italy, Spain, Australia, Germany, South Korea, Mexico, and Canada.
However, when the question regarding corporate influence was phrased in a different way, the results altered: when ask whether it a good thing or bad thing for corporations to be strong and influential, only 31 percent of Americans answered that it is a good thing, among the lowest of the countries surveyed, and well below the levels of major emerging economies like India, Mexico, Turkey, and China (in which 60 to 70 percent of respondents were favorable to greater business influence).
In fact, only Germany, Poland, the U.K., and Hong Kong were more cynical about companies having greater influence, although Australia, the Netherlands, Japan, and Canada were not far behind the U.S. in their dim view of more powerful businesses. Yet when asked whether corporate lobbyists exercise a high amount of influence over the national government, 59 percent of Americans responded in the affirmative, second only to Italy.
So what gives with this apparent contradiction? Times columnist Niel Irwin offers his assessment of the results:
When it comes to business exerting power over the economy, Americans have mixed views but are generally comfortable. But when it comes to business exerting power over government, they are much more exercised.
Americans aren’t antibusiness, in other words. They’re just against business having what they see as too much power in Washington.
Compare that with China, where citizens seem to view businesses as less powerful in terms of lobbying (only 19 percent seeing a lot of influence by corporate lobbyists, a full 40 percentage points lower than in the United States) but are more likely to believe it is good for companies to be strong and influential. One might imagine that Chinese citizens see less a phenomenon in which business overly influences government and one more in which government overly influences businesses.
Indeed, a remarkable pattern stands out. In some of the places where big business has the least power and capitalist economies are the least developed, optimism and support for the corporate sector is highest.
In Communist Party-led China, 74 percent of respondents agreed with the statement that “it is a good thing when corporations are strong and influential, because they are engines of innovation and economic growth.” That is around three times the level of support found in capitalist paradises like Britain, the United States and Australia.
Indeed, when asked whether the role of corporations in the future is a reason for hope or for fear, the U.S. and most other rich nations expressed the highest level of apprehension; conversely, the greatest amount of hope in the corporate sector were in the emerging economies like Indonesia, China, Malaysia and India.
As Irwin notes, it basically comes down to the fact that the less developed a corporate sector is in a given country, the more hopeful its people are that it will be a force for the better. Perhaps this is because these nations have yet to experience the large scale of business malfeasance than the long-industrialized West; or maybe it reflects greater trust in private institutions as opposed to the public ones — in most of these nations, particularly India and Brazil, governments are far less trusted.
Of course, it bears reminding that respondents from the developing world represent a smaller and more elite proportion of their respective nations — perhaps the average worker in these countries feels far less hopeful and trustworthy towards their corporations? What are your thoughts?
Well, that is not quite the argument that Amy B. Dean made in her opinion piece for Al-Jazeera America, titled Not Enough Taxation and Too Much Representation. But she does point out the discrepancy between how little modern corporations invest in their community — whether through paying taxes or through offering decent employment — and how much they nonetheless continue to exercise disproportionate political influence.
For decades now, U.S. corporations have been cutting ties with the communities that enabled their success in the first place. The trend began in manufacturing, a sector that has slashed nearly 8 million jobs since 1979. It has since spread as companies have outsourced and offshored an expanding array of jobs. A good example comes from the semiconductor industry. According to the Government Accountability Office, beginning in the 1960s, semiconductor manufacturers began to move assembly plants to Asia. In the 1980s they followed these with wafer foundries and, beginning in the 2000s, design and engineering jobs as well. A survey of over 500 companies by the consulting firm Booz Allen Hamilton affirms this trend, finding “a salient shift toward locating more sophisticated and mission-critical work in countries such as India, China, Hungary, Brazil and the Philippines.”
From 2010 to 2012, three-quarters of the jobs created by the 35 largest U.S. companies from were outside the country, according to The Wall Street Journal. And for the 2000s, the newspaper reports, “U.S. multinational corporations, the big brand-name companies that employ a fifth of all American workers, have been hiring abroad while cutting back at home” — with domestic payrolls reduced by 2.9 million while 2.4 million jobs were established overseas.
As it is, the complaint about high statutory corporate tax rates is a red herring. As the Economic Policy Institute reports, the effective corporate tax rate has stayed at a relatively low 27.7 percent, on par with those of other economically advanced countries. In fact, the effective rate has remained well below the statutory rate since the early 1980s, making corporations’ complaints about their tax rate here seem hyperbolic. The fact remains that almost all the benefits of higher productivity have gone to corporations, and their profits are at an all-time high.
One could argue that this trend could be tolerated, were it not for companies nevertheless wanting to play an ever bigger role in domestic issues and local governance:
As corporate culture has grown more and more disconnected from American communities, it has demanded a greater and greater say in the country’s elections. Since 2000, independent expenditures in electoral campaigns have increased over 60-fold, from under $3 million to $186 million today. And an increasing amount of this money has come from avenues opened by the 2010 Supreme Court decision Citizens United, in which it upheld the idea that corporate money should be regarded as speech and thus be covered by First Amendment protections.
Given the long-term shift in corporate loyalties away from being invested in American communities, we should be moving in the opposite direction, taking action against corporations that have such a dominant role in our democracy. The ability to participate in democratic deliberations should be predicated on embracing the responsibilities of citizenship and being invested in the well-being of our communities.
Personally, I agree with this sentiment. Although I see myself as a citizen of the world, and think we have an obligation towards bettering the lives of others beyond the borders we happen to be born within, what is going on here is different: companies are decoupling from any sense of social responsibility towards their communities while still feeling entitled to disproportionately influence the policies of the very areas they have essentially abandoned.
Moreover, the fact that record profits have not translated to better pay or treatment for workers — in or out of the country — makes this practice all the more reprehensible. Many of these companies have the resources at their disposal, and can in fact continue making good profits while looking after communities both here and abroad; but alas, the demand for ever-higher payouts to shareholders and executives eats a bigger chunk of the profit that could be reinvested through better pay, benefits, and the like.
In short, what we see is part of a wider trend in which economic elites feel little social obligation towards the rest of society. They have the resources to isolate themselves geographically from the non-wealthy, or indeed to leave their communities altogether (whether local, state, or national). Globalization has only amplified this disconnection, as the wealthiest citizens can simply move themselves and their great resources wherever suits them.
But in a world where overall wealth is higher than ever — yet concentrated so that 85 individuals have more than 3.5 billion people — is this sort of decoupling morally justifiable? Cannot these prosperous companies and their investors spare even a fraction of what they have towards bettering the lives of the workers worldwide who contributed to that prosperity, rather than try to dominate them further by supporting even more onerous policies? It would appear that our business culture and economic system do not allow it.
What do you think? Do companies have an obligation to their communities? Should they refrain from exercising influence if they are going to be leaving their localities or even countries behind?
To add insult to the injury of a stagnating economy, a report by economists Dan Hamermesh and Elena Stancanelli found that Americans are not only working longer than before (partly because they are making less per hour), but are increasingly more likely to toil outside of work hours, particularly at night and on weekends. As The Atlantic reported:
They found that on a typical weeknight, a quarter of American workers did some kind of work between 10 p.m. and 6 a.m. That’s a lot, compared with about seven percent in France and the Netherlands. The U.K. is closest to the U.S. on this measure, where 19 percent work during night hours. On the weekends, one in three workers in the U.S. were on the job, compared to one in five in France, Germany, and the Netherlands.
All of this adds up: According to the OECD, the U.S. leads the way in average annual work hours at 1,790—200 more hours than France, the Netherlands, and Denmark. That works out to about 35 hours a week, but a recent Gallup poll found the average to be much higher than that—at 47 hours weekly. And perhaps that’s not surprising, when 55 percent of college grads report that they get their sense of identity from their work.
As usual, technology serves as the double-edged sword: in many respects, it has made work a lot easier, not to mention all the new leisure activities (video games, Netflix, game apps, etc). But technology also allows work to be more accessible from home or even while on vacation, making it harder for employees to ignore emails, calls, and assignments — and easier for employers to expect, if not demand, such extra labor.
The consequences of such a work-centered culture are dire: strained social life, reduced sleep, frayed romantic and sexual activity, increased stress and, with all that, worsening mental and physical health. With the boundaries between work and leisure increasingly blurring, will jobs come to dominate our lives in the same way they once did during the early Industrial Era (when child labor, 12-hour workdays, and other such practices were the norm)?
If that is the case, then the solution is more or less the same now as it was then: more solidarity and activism among workers in all the relevant spheres — economic, public, and political. There is no sense in making people work more for less, especially when employers themselves stand to lose a lot in terms of reduced productivity, moral, and health among their employees.
We also need a serious assessment of how our business culture — and culture at large — operates counter-productively for human flourishing. It is becoming accepted practice, once again, for companies to squeeze out more and more from their beleaguered workers while simultaneously offering little to nothing to recompense (on the contrary, the trend is for ever-meager benefits, raises, and upward mobility).
More distressingly, it seems that far too many Americans consider this arrangement to be, at the very least, tolerable, if not acceptable. Ours is a work-obsessed culture that celebrates sacrificing leisure and even health for the sake of being productive at some task, even if it is for a company we hate and for benefits that do not make up for it. I can devote a whole other blog to assessing why it is that the U.S. seems especially enthusiastic about toiling at our own expense, but for now I ask that we at least question what it is we value in terms of quality of life; separating work from leisure is the very least we can do to that end.