Tuesday :: Jul 11, 2006

Evil Is As Evil Profits

by pessimist

I was challeneged on a previous comment thread over the activities of Bu$hCo which are making things worse rather than better. Those specific activities happened to be international in scope, but that doesn't mean they didn't have domestic effects.

Bu$hco activities are also affecting our nation in an adverse way:

The politics of greed
Nasty effects of Bushonomics start to take toll
Molly Ivins, Creators Syndicate

Anyone who doesn't think this is a country where the rich are getting richer and the poor are getting poorer needs to check the numbers -- this is Bush country, where a rising tide lifts all yachts. It seems to me that we've seen enough evidence over the years that the capitalist system is not going to be destroyed by an outside challenger like communism -- it will be destroyed by its own internal greed. Greed is the greatest danger as we develop an increasingly winner-take-all system. And voices like The Wall Street Journal's editorial page encourage this mentality by insisting that any form of regulation is bad. But for whom?

Believe it or not - it isn't just American workers who get to endure the slings and arrows of outrageous executive fortune:

Bush, Congress consider free trade pact with North Korea
by David Sirota

In getting ready for the big National Press Club event tomorrow to discuss the politics of “free” trade – and Washington’s refusal to back off selling out Americans – I came across this positively shocking piece in the Wall Street Journal [Login required].

The broad strokes are simple: the Bush administration and both parties in Congress are considering signing a "free" trade pact with South Korea that would cover a special project in North Korea that allows Big Money interests to exploit the enslaved people there.

It would be rewarding a dictator like Kim Jong Il in that
it would create a premium for corporations to exploit his enslaved population.
The fact that this is even being talked about as a legitimate consideration inside our government tells you everything you need to know about the hostile takeover of our government by Big Money interests. [O]ur international trade policy prioritizes profits over national security. [T]his atrocious pact lays bare what our government sees our "free" trade as: a vehicle for driving wages, workplace standards, environmental protections and standards of living into the ground in order to pad Big Money's bottom line.

That bottom line appears to be going more and more into the pockets of those at the top.

Top 100 Executives by Total Compensation

#100 Michael J. Mancuso, SVP and CFO of General Dynamics Corp. received $3,509,553 in compensation, of which $575,000 was salary, while his company earned $1.5 billion. [This is 0.2% of the company's earnings]

#1 Thomas J. Fitzpatrick, CEO of SLM Corp., received $39,629,325 in compensation, of which $682,500 was salary, while his company earned only $1.4 billion. [This is 2.7% of the company's earnings]

They don't 'earn' such vast sums by answering the phone and giving orders. Their job is to convince the rest of us that they know better than we do about how business should be conducted - like this:

Undoubtedly, Big Money interests will trot out politicians from both parties to once again tell us this is all good for American workers, even as wages continue to stagnate, pensions get cut, and health care benefits eliminated. They would rather the public ignore the effort to validate the "joint-venture Kaesong industrial complex in North Korea" that "combines South Korean capital with North Korean labor" (read: combines multinational corporate cash with exploitable slaves).

By the time the complex is in full operation in 2012, "it could employ more than 750,000 North Koreans" – again, North Koreans who are literally enslaved and barred from leaving their prison. Such a deal would force the world’s workers to compete with slave labor.

No one wants to come out and say this is what the trade negotiations are all about, or that they really want this North Korea piece - even though its obvious Big Money is salivating for it. Clearly, though, it is the bought off, the dishonest and the immoral who would continue justifying a trade policy that deliberately eliminates all wage, workplace, environmental and human rights protections. It is these elitists who would sit by while our government openly debates whether to reward a country like North Korea for its horrific treatment of its people.

This proposed deal goes beyond the other awful trade deals that we've watched the Bush administration and Congress consider recently - it goes beyond the job-destroying Central American Free Trade Agreement and even beyond the proposed trade pact with Malaysia, a country that prohibits a minimum wage.

Now, we have a U.S. administration publicly considering economically rewarding a country that is test firing missiles, developing nuclear weapons, and threatening our allies - rewarding this global threat with a trade pact that validates that aggressor’s enslavement of its population.

That's why the upper level White House staff 'earned' raises - in one case, to assist with reimbursing the government for expenses billed while job hunting.

But for those who aren't at the top [and this must not include all of our wrong-winger friends, who thus don't 'feel our pain'], Things aren't so rosy:

According to the current issue of Mother Jones:
# One in four U.S. jobs pays less than a poverty-level income.

# Bush has diverted $750 million to "healthy marriages" by shifting funds from social services, mostly childcare.

# Bush has proposed cutting housing programs for low-income people with disabilities by 50 percent.

# Since 2000, the number of Americans living below the poverty line at any one time has risen steadily. Now, 13 percent -- 37 million Americans -- are officially poor.

# Bush's tax cuts (extended until 2010) save those earning between $20,000 and $30,000 an average of $10 a year, while those making $1 million are saved $42,700.

# In 2002, Sen. Charles Grassley, R-Iowa, compared those who point out such statistics as the one above to Adolph Hitler (surely he meant Stalin?).

A series of related stats -- starting with the news that two out of three new jobs are in the suburbs -- shows how the poor are further disadvantaged in the job hunt by lack of public or private transportation.

But even if they had access to transportation, the deck is stacked against the worker:

Business people cite shifts in the world economy that give educated workers leverage to negotiate for higher wages but make low-paid workers replaceable -- a disparity that is especially pronounced in a service economy like Washington's.

Consider Focuspoint Inc., a company in Manassas that sells recorded messages for companies to play when callers are on hold. Three years ago, two order clerks frantically juggled calls and faxes from several hundred clients placing orders. Now the company has 1,700 clients and is expanding its sales and other high-level staff but still has just those two clerks -- who now sit quietly overseeing Internet orders. "Three years ago, we would have had to hire more people to handle all our new clients," said Joe Martin, a vice president.

"Now, we rely on new technology to pick up that work."
Such innovations help explain why, from 2003 to 2005, the average wage for people in the lowest pay bracket, with salaries around $20,000, rose only 5.4 percent in the Washington region -- not enough to keep up with rising prices.

"I'm not the kind of person to say I'm not getting paid enough," said Kamal Quarles, 27, of Oxon Hill, who handles packages for a large shipping company -- a function that is rapidly becoming automated. He said he is earning 4 percent more than he did when he started four years ago.

"The reality is my pay isn't rising - but everything else is."
When companies ask HireStrategy Inc., a staffing firm in Reston, to help them find an employee for a clerical job handling invoices, HireStrategy can usually find a match within a few days, chief executive Paul Villella said. The would-be clerk generally cannot negotiate a higher salary because the firm knows it can find someone else.
* The retail industry has shifted to big stores that require fewer cashiers (two-year wage gain nationwide: 2.1 percent) and stock clerks (2.7 percent) than the department stores and small shops they replace.

* Firms that once employed dozens of people handling payrolls now hand the work to huge companies that do nothing else and rely heavily on automation (payroll clerk wages: up 4.7 percent).

* [L]ong-distance telephone costs have dropped so much that it is feasible for big companies to hire people in the rural United States or abroad -- far from corporate offices -- to take phone orders (order clerk wages: up 3.2 percent).

* [B]anks had 88 tellers per $1 billion in bank assets in the region in 2003, two years later they had 84, based on a comparison of data from bank regulators and the Labor Department. [I]n those two years, tellers' average salary rose only 4.6 percent, to $24,090.

When demand for even a few types of low-wage jobs goes soft, wages can be held down in all of them, economists say. That's because a worker qualified to be a retail clerk might just as well become a security guard or receptionist.
That means, in effect, that
all low-wage workers are competing with one another
- a sharp contrast with more specialized jobs.

King George's Open Gate For Immigrants Policy is only going to make things worse:

Immigration may be another factor in the weak wage gains for those with low incomes. Recent immigrants, legal or not, tend to be less educated than the population at large and thus compete with low-skilled native-born Americans for jobs. Studies vary, but some economists estimate that immigration reduces wages for native-born Americans without a high school education by as much as 8 percent.

This leads at least one True Conservative columnist to ask What happens to the unemployed and underemployed Americans?

President Bush used to proclaim that illegal immigrants were taking "jobs Americans don't want." He more recently adjusted his rhetoric to refer more accurately to "jobs Americans are not taking." If the jobs paid more, more Americans probably would take them.
But that would run the risk of reducing profits for employers or raising prices for consumers.
Rather than risk a price increase for lettuce, many Americans prefer to look the other way. The result is what I call a make-believe immigration policy of laws that few people feel bound to respect.

The burdens that our make-believe immigration policy imposes on low-wage earners, immigrant and non-immigrant alike, continue. Their labors are devalued in a crowded labor market. The gap between highest and lowest earners continues to grow as the real income of low-wage earners continues to stagnate.

Raising the minimum wage would help, just for starters.
Raising the earned-income tax credit would help more.
If experts on both sides of the immigration divide agree on anything, it is that illegal immigrants provide a pool of cheap and eager labor, one that employers - and the politicians whose campaign coffers those employers support - cherish.

The fact that low-wage workers have few employment choices only leads to the abuse of those workers. For example, Wal-Mart recently required employees to conduct a bomb search when a threat was called in, even though all the customers were ordered out of the store.

The following article shares some frank information on the employment and immigration problems facing this nation. I just wish the lead author had more credibility:

Immigration reform won't give average American job security
July 10, 2006

Tom Daschle was Senate majority leader in 2001-02. Leo Hindery is the managing partner of InterMedia Partners, former CEO of TCI, AT&T Broadband and the YES Network, and author of It Takes a CEO: It's Time to Lead With Integrity.

Clearly, integrating America's illegal immigrants into the work force and society is a national priority. However, no political solution to illegal immigration will ever be accepted while America's middle-class workers live in fear of losing their own employment or seeing it diminished.

Much has been written about how the influx of low-wage immigrants has made it more difficult for struggling native-born Americans to find employment. This is true, especially for disadvantaged populations such as school drop-outs, unskilled laborers, and young African-American males.

With millions of undocumented immigrants entering the United States each year, lawmakers are under pressure to stop the flow and determine how best to deal with more than 11 million illegal workers in the country today. Unfortunately, no amount of immigration reform will give average Americans what they want and need most: a secure, good-paying job.

An honest accounting of the nation's true unemployment rate would show as many as 10 percent to 12 percent of Americans are currently out of work. In addition, there are several million more people who are underemployed, having accepted jobs with fewer hours and benefits and lower wages.
The American economy is short about 12 million good jobs.
Although the U.S. economy is creating new jobs, most of these positions are not symmetrical in numbers and quality with those being lost to offshoring. Domestic service jobs paying on average $9,000 or less a year are not an acceptable offset to the loss of high-quality manufacturing, service and IT positions.
However, the far more serious threat to America's economic well-being
is the ongoing, systematic pressure to eliminate jobs, reduce wages and cut benefits.
Nearly 5 million American jobs have moved offshore since 2000. If this trend continues, a staggering 18 million positions in manufacturing, services and information technology will move overseas by 2015. No economy in the world can sustain that kind of loss in all three sectors and hope to remain productive and prosperous.

Finally, as a nation, we need to explore bold, creative ways to move away from our manic emphasis on consumption-led economic growth toward a more equitable system that rewards savings and investment, encourages renewable development, and values workers at every level.

Worker value - what a concept! As Clarence page pointed out above, a wage hike would help. One state has just become the latest to take minimum-wage matters into their own hands:

Pennsylvania Minimum Wage To Go Up $2 Per Hour
July 10, 2006

There is good news for people who earn minimum wage in the state of Pennsylvania. They'll soon see more money in their paychecks. Gov. Ed Rendell signed the bill raising the minimum wage by $2 an hour Sunday in Philadelphia at Sharon Baptist Church in Wynnefield Heights. The minimum wage increase will be phased in over the next year.

Click Here to see the entire press release.

I'll let Molly Ivins have the last word:

It is so discouraging to watch this country become less and less fair -- "justice for all" seems like an embarrassingly archaic tag. Republicans have rigged the "lottery of life" in this country in ways we don't even know about yet. The new bankruptcy law is unfair, and the new college loan rules are worse. The system has been stacked so that large corporations have an inside track over small businesses in getting government contracts.

Meanwhile, for those who have been following the collapse of the pension system, please note a series in The Wall Street Journal by Ellen Schultz taking a hard look at executive pension obligations:

# "Benefits for executives now account for a significant share of pension obligations in the United States, an average of 8 percent (of large companies). Sometimes a company's obligation for a single executive's pension approaches $100 million."

# "These liabilities are largely hidden, because corporations don't distinguish them from overall pension obligations in their federal financial findings."

# "As a result, the savings that companies make by curtailing pensions of regular retirees -- which have totaled billions of dollars in recent years -- can mask a rising cost of benefits for executives."

# "Executive pensions, even when they won't be paid until years from now, drag down the earnings today. And they do so in a way that's disproportionate to their size, because they aren't funded with dedicated assets."

Congress has voted seven times to raise its own wages since last the minimum wage budged. Of course, Congress always raises its own salary in the dark of night, hoping no one will notice. But now it does the same with the minimum wage, quietly killing it.

I don't get it. What's the percentage in keeping the minimum wage at $5.15 an hour? After nine years? this is such an unnecessary and nasty Republican move.

We won't see the full consequences of this mean and careless legislation for years,
but it starting to affect us already.
pessimist :: 9:19 PM :: Comments (6) :: TrackBack (0) :: Digg It!