Writing in Huffington Post, Amy Traub, an Analyst at Demos, notes that the National Labor Relations Board has ruled that McDonald’s workers could organize as one union because of the corporation’s rules for franchisees. This ruling will be appealed. However, if it is maintained, fast food workers have won a great victory in their fight for a living wage. Traub also notes efforts in the U.S. Senate and House to introduce new legislation that would make it easier for workers to organize. Given the current structure of the Congress, it’s hard to imagine these measures becoming law. That’s the bad news. The good news is that strong progressive voices like Senator Tom Harkin and Representative Keith Ellison are speaking out and presenting alternatives to “right to work” [for less] schemes. As Traub states, this has been a good week for workers. May there be many more.
Life is settle a matter of white and black. Hobby Lobby has come under fire for its role in the Supreme Court’s decision that will let the company not pay for certain kinds of birth control. As someone who supports workers’ rights, this case bothers me and makes me afraid that much worse is to come from the Supreme Court. On the issue of minimum wage, however, Hobby Lobby is something of a trailblazer. According to Demos, a left-leaning think tank, the company raised its minimum wage to $14 per hour in 2013. Demos points out that Hobby Lobby will win greater worker loyalty by paying a higher wage. It also is closed on Sunday, which means that every employee gets that day off. However, a year later, the company has lost some of that good will by its stance on paying for birth control options. An employee who is forced to pay for contraception might resent this restriction and the religious motivation behind it. My fear is that the Hobby Lobby case and other recent Supreme Court decisions will let companies take even more liberties with workers’ rights. What if a company says that its religious beliefs require women to dress a certain way? What if a company refuses to hire gays based on religious beliefs? I can’t argue with what Hobby Lobby pays as a minimum wage, but the Supreme Court's decision that a company’s religious beliefs puts us on a very slippery slope.
Run a big bank. Buzzfeed reports that James Gorman, head of Morgan Stanley, has been given an 85% pay increase, upping his income to $18 million. To put things in perspective, Gorman is credited with turning the company around, and he still makes less than Goldman Sach’s chief Lloyd Blankfein, whose annual compensation is $23 million. Still, in a time when most Americans consider a 3% annual raise to be normal, an 85% pay increase sounds like some people play a different game. That’s because they do. Momma, don’t let your babies grow up to be cowboys. Send them to a great MBA program that feeds investment banks. It seems that’s the only way to get ahead in 21st century America.
I frequently blog about income inequality because it is a vital issue that affects all working people, not just those in low wage jobs. Today, President Obama called income inequality, “the defining challenge of our time.” The President referred to specific types of low wage workers in calling for an increase in the minimum wage. More importantly, he addressed the issue of decreased mobility: not only are more Americans being born into poverty, they seem to be stuck there. The President’s words are good and inspiring. However, during his first campaign, he told labor that he would stand with them and put on his walking shoes to be with them in the picket line. Did Obama march in Wisconsin or Ohio? No. Did he push through passage of the Employee Free Choice Act? No. Hopefully, these good words will lead to some positive action. Let’s remember Jesse Jackson motto: “Keep hope alive.”
There is nothing hopeful about the situation in Detroit. Judge Steven W. Rhodes, a federal bankruptcy judge, ruled that all should be for the creditors, nothing for retired workers who paid into pension funds. David Cay Johnston describes the situation as “stealing from the workers.” His reasoning is clear: Pensions are deferred wages. Would anyone think of taking money from an employee’s paycheck? That would clearly be theft. How is a promised pension any different? Johnson lists several examples of how politicians have played this game in the past. Detroit is just the latest, ugliest example of a trend that is also taking place in my state, Illinois, which is run by Democrats.
As Johnston examines the economic impact of Detroit’s bankruptcy, John Nichols considers the political impact. Citing a study by Demos, Nichols argues that Detroit’s serious financial problems should not have led to bankruptcy. Why did the city go bankrupt? So the Governor could appoint an unelected manager to strip assets that range from pension funds to the great collection in the city’s art museum. Nichols quotes Detroit’s new mayor Mike Duggan, who admits that he will only have power to the degree that it is given by the governor and his manager. The elected mayor is powerless. Nichols captures the problem in these words: “There is a lot more at stake in Detroit, and in Michigan, than one city’s balance sheet. Our understanding of democracy, itself, is being subverted.”
If President Obama is serious about addressing income inequality and mobility, he should start in Detroit. Turn the Justice Department loose on Governor Snyder and his “Emergency Managers,” who lord over cities that are populated mostly by poor African Americans. Clearly American citizens in the cities under Governor’s Snyder’s Emergency Manager system are not enjoying the rights promised under the XV Amendment. Detroit is a good starting point, Mr. President. Save democracy and promote opportunity in that great city.
P.S. David Sirota calls out the fraud in Detroit by discussing funds that can be found for a new hockey arena and $6 billion in subsidies, also known as corporate welfare.
According to the good people at Demos, Walmart could easily give its low wage workers a raise, and, with a little sacrifice by corporate leaders, all of the company’s workers could earn a salary well above the poverty line. Where do they get the data to make this claim? From a presentation by Walmart CEO Bill Simon. Check out this infographic to see how Demos finds a happy solution that would please both Walmart workers and customers – no prices need to be raised. The rich heads of the company would still be rich, just not as rich.
Sarah Lazare, a staff writer at Common Dreams, reports that Detroit’s bankruptcy is not the fault of pension funds. A report by Demos has found that bank deals, including “swaps,” have put the city in its current hole. The deals never should have been made given the city’s shaky standing. It’s almost as if the banks wanted Detroit to go bankrupt, so they could sweep in and clean the carcass. Another factor fueling the city’s failure was corporate subsidies, which the weak city gave to corporations that are flush with cash. Given all this, it makes perfect sense to blame pension funds and the workers who will lose all of their pensions. What’s going on in Detroit is criminal, but as we saw in the Banking Crisis of 2008 and its aftermath, bankers cannot be held responsible for their wrong doing. They get a bail out. Detroit gets the shaft.
One of my favorite websites, Common Dreams, has reposted an artice by Mijin Cha of Demos that analyzes the career mobility of workers in the fast food industry. As you might expect, the career ladder has only one rung for most employees. Few employees are made manager. Even fewer will ever own a franchised restaurant that requires a net worth of $500,000. Cha points out that the owner of Yum Brands is a millionaire who made $55 million last year. He pays his employees $7.25 an hour. I would add to this that many conservative politicians, following the lead of Herman Cain, are arguing to abolish the minimum wage. Do people like the owner of Yum Brands deserve to be richer while tens of thousands of workers get poorer? Is that a free market – or the road to slavery?
P.S. Laura Clawson of Daily Kos adds to this point. As always, her articles are a must read on issues that affect working people.