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KEEPING WORKERS POOR IS BAD FOR BUSINESS

At America’s biggest low-wage employers, chief executives now pocket 670 times more than their workers.

By Sam Pizzigati 

CEOs at America’s biggest low-wage employers now take home, on average, 670 times what their typical workers make.

But we don’t just get unfairness when a boss can grab more in a year than a worker could make in over six centuries. We get bungling and inefficient businesses.

Management science has been clear on this point for generations, ever since the days of the late Peter Drucker.

Management theorists credit Drucker, a refugee from Nazism in the 1930s, for laying down “the foundations of management as a scientific discipline.” Drucker’s classic 1946 study of General Motors established him as the nation’s foremost authority on corporate effectiveness.

That effectiveness, Drucker believed, had to rest on fairness.

Corporations that compensate their CEOs at rates far outpacing worker pay create cultures where organizational excellence can never take root. These corporations create ever bigger bureaucracies, with endless layers of management that serve only to prop up huge paychecks at the top.

Drucker argued that no executive should make more than 25 times what their workers earn. And, in the two decades after World War II, America’s leading corporate chiefs by and large accepted Drucker’s perspective.

Their companies shared the wealth when they bargained with the strong unions of the postwar years. In fact, notes the Economic Policy Institute, major U.S. corporate CEOs in 1965 were only realizing 21 times the pay their workers were pocketing.

Drucker died in 2005 at age 95. He lived long enough to see Corporate America make a mockery of his 25-to-1 standard. But research since his death has consistently reaffirmed his take on the negative impact of wide CEO-worker pay differentials.

The just-released 28th annual edition of the Institute for Policy Studies Executive Excess report explores these wide differentials in eye-opening detail. The report zeroes in on the 300 major U.S. corporations that pay their median workers the least.

At these 300 firms, average CEO pay last year jumped to $10.6 million, some 670 times their $24,000 median worker pay.

At over 100 of these firms, worker pay didn’t even keep with inflation. And at most of those companies, executives wasted millions buying back their own stock instead of giving workers a raise.

Just as Drucker predicted, this unfairness has led directly to performance issues. Many of our nation’s most unequal companies, from Amazon to federal call center contractor Maximus, have seen repeated walkouts and protests from justifiably aggrieved workers.

Lawmakers in Congress, the Institute for Policy Studies points out, could be taking concrete steps to rein in extreme pay disparities. They could, for instance, raise taxes on corporations with outrageously wide pay gaps.

But with this Congress unlikely to act, the new Institute for Policy Studies report also highlights a promising move the Biden administration could take on its own. The administration could start using executive action “to give corporations with narrow pay ratios preferential treatment in government contracting.”

That would amount to a major step forward, since 40 percent of our largest low-wage employers hold federal contracts. If the Biden administration denied lucrative government contracts to companies with pay gaps over 100 to 1, those low-wage firms would have a powerful incentive to pay workers more fairly.

Various federal programs already offer a leg up in contracting to targeted groups, typically small businesses owned by women, disabled veterans, and minorities.

“Using public procurement to address extreme disparities within large corporations,” the IPS report adds, “would be a step towards the same general objective.”

And a step in that direction, as Peter Drucker told Wall Street Journal readers back in 1977, would honor the great achievement of American business in the middle of the 20th century: “the steady narrowing of the income gap between the ‘big boss’ and the ‘working man.’”

[Source]

Capitalism’s Unplanned Obsolescence

By Pedro Domínguez Gento

After centuries of atrocities against people including wars, massacres, slavery, exploitation, the destruction of the environment, pollution of ecosystems, extinction of flora and fauna, etc., this insensitive and insatiable system has brought us to the current critical situation, including pandemics. And if it were not for the environmental problems, more and more unsustainable, it would continue doing barbarities indefinitely, because people are easy to deceive (this is the only way to explain why the extreme right that caused the Second World War and 60 million deaths is growing again), but Nature cannot be deceived because it works with physics and chemical laws absolutely indifferent to publicity and lies of the great political, economic, religious, media leaders…

Corporate and state capitalism is reaching its expiration date, unplanned obsolescence, for at least three different reasons:

Climate emergency: the COP26 declared that during this decade we have to reduce greenhouse gases and therefore fossil fuels by 45% if we want to limit the global rise in temperatures to 35F, so that extreme climatic phenomena do not prove to be excessively destructive and we can withstand them.

However, the real commitments of governments are insufficient (some still subsidize airplanes, automobiles, mass tourism, weapons and want to expand airports, ports, roads, etc.) and lead us towards rises of 36F and 38F over the coming decades, with the danger that some phenomena such as melting Arctic ice, tundra and glaciers are self-sustaining and can irreversibly accelerate global warming. And if global temperatures rise this much, in Spain we will have summers with days of 122F and 140F, as in the Sahara .Are the governments, the owners of the big companies and the citizens aware that this is absolutely unsustainable and threatens the survival of millions of species, including our own?

Decline of natural resources: some strategic minerals are being depleted at a rapid rate, for example mercury of which we have already extracted 92%, silver 79%, gold 75%, tin 75%, arsenic 75%,  lead 72%, copper 59%, oil 48%, etc., and this is already beginning to generate serious problems before they are exhausted. Oil, in particular, still has half of its reserves left, but those of easy extraction have run out and every year it is more complicated and more expensive to continue extracting it, so that its production has passed peak oil 4 and is declining, especially diesel, fuel for heavy machinery… With the decline and depletion of natural resources, how long can a system based on continuous growth and abundant and cheap oil last?

System collapse: in the long run this system is unsustainable, but the question now is what will world leaders do in the short and medium term? In principle, they do not seem to want to solve the problems because for the moment they are doing well, they are getting richer and more powerful, the opposite of what is happening to the great majority of people. And they continue to do more of the same: speculation and financial bubbles, disconnection of the financial world and the real economy, privatization of public services and even pensions, automation of processes and reduction of human labor, growing unemployment especially among young people, maintenance of long working hours, lengthening of the retirement age, etc. etc.. They are so much carried away by the historical inertia that they are repeating the “solutions” that they already applied to the biggest previous crisis, the 1929 crash and the world depression of the 30’s; making those at the bottom pay for the crisis, hardening repression, encouraging extreme right-wing groups/parties/governments, specialists in lying and provoking, promoting a new arms escalation with NATO destroying oil countries, plundering them and besieging Russians, Chinese and others. We already know how that crisis ended and now it could be much worse because they have 13,000 thermonuclear missiles, much more destructive than the bombs that destroyed Hiroshima and Nagasaki… How would this civilization be left if World War III broke out? Would anyone survive?

Today there are already 7,921 billion human beings but the main problem is not overpopulation but over consumption. As Ghandi said, “the Earth has enough resources to sustain all mankind but not enough to satisfy the greed of a few”. In other words, there are not enough resources and regenerative capacity of the biosphere for our economy, consumption and waste to continue to grow ad infinitum; this insane pretension of capitalists and their economists is completely impossible and leads us humans and millions of species to the dustbin of history!

However, there are solutions to all problems and we have known them for a long time, but they all involve overcoming this system. Solutions such as those proposed by the 11,000 scientists generalizing savings, efficiency and renewable energies, eliminating fossil fuel subsidies, helping poor countries to abandon them, protecting and restoring ecosystems, consuming more plant-based food and less animal-based food, stabilizing the world population while respecting human rights and on and on.

And by consuming less, in rich countries, we can even live better. For example, with regard to the climate emergency, we must reduce by half fossil fuels, which account for almost 90% of the energy we use, and we can do this perfectly well because right now there are people who maintain a good standard of living and quality of life by consuming much less energy and resources than the average of their fellow citizens. And they are equally or happier because, after covering basic needs, well-being and happiness no longer grow with consumption, and may even decrease due to the negative impacts of consumerism on health and the environment.

Inevitably we are going to decrease because we have exceeded the fundamental limits of the biosphere and this is unsustainable. We were warned because the authors of The Limits to Growth predicted it 50 years ago and numerous subsequent studies have corroborated it. The question now is how we decrease, if by the hard way, continuing as we are going until the uncontrollable collapse explodes uncontrollably, or by the good way, organizing and empowering ourselves as conscious people and leading it in a scientific, democratic, cooperative and in solidarity with one another.

This decade will be crucial, if we lose it uselessly as the previous ones, perhaps we will not be able to recover the climate balance, nor will we have enough resources for change or simply we will have burst in a new global deflagration… But the future is not written and if we do not let ourselves be deceived or lead like sheep to the slaughter, if we organize and fight, we can overcome this obsolete system and evolve towards a much better one…

[Source]

Tlaib Calls On Biden To Confront ‘Corporate Greed’ And Pursue Executive Action On Climate Change

Rep. Rashida Tlaib (D-MI) on Thursday called on President Biden to take executive action on climate change as the Democrats signature climate and social spending bill sits stalled in the U.S. Senate.

https://www.youtube.com/watch?v=USds-qD3cuI

Is Woke Capitalism the New Trickle-Down Economics?

Stakeholder capitalism might be a feel-good corporate-friendly ideology, but so long as some stakeholders are (extremely) more equal than others, it is a flimsy fig leaf trying to hide an economic system that is producing ever-increasing levels of inequality.

By CARL RHODES

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Just like the trickle-down economics of a generation ago, stakeholder capitalism provides a moral justification for the pursuit of corporate self-interest while inequality gets worse and worse.

Each January Larry Fink, billionaire boss of asset management firm BlackRock, sends a letter to the CEOs of the corporations his company invests in. In these letters he takes it upon himself to outline his views on the most important issues affecting the business world.  

A well-known advocate of “corporate purpose,” in the past Fink’s letters have addressed the responsibility of corporations’ environmental sustainability, workforce diversity, and the impact of business on society. His mantra has been that people have lost trust in governments that are failing to solve social and political problems, and it’s time for business to step up.

In this year’s letter released on January 17, Fink had a slight change in tack. He still goes on about stakeholder capitalism and how corporations should pursue the interests of the customers, employees,  suppliers, and communities, rather than just shareholders. What he added in 2022 was a direct statement that his approach to business is not “woke” and “is not about politics.”

Stakeholder capitalism, according to Fink, has nothing to do with ideology, it is simply the best way to do capitalism. What could be less woke than that! “We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” he opines.

[Read on]

How Biden’s Build Back Better Debacle is a Blow to the US

Eugene Puryear of BreakThrough News explains how Senator Joe Manchin’s torpedoing of the Build Back Better plan will affect the people of the US across the board. He also talks about the dominance of corporate agenda in the halls of Congress, and the struggles of people’s movements in light of this debacle.

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Freedom Is Not Free (That’s Why You Don’t Have Any)

Listen to a reading of this article:

https://w.soundcloud.com/player/?visual=true&url=https%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F1086642940&show_artwork=true&maxwidth=1060&maxheight=1000

“Freedom is not free,” goes the old bumper sticker slogan, commonly accompanied by an image of a flag or soldiers or some other bullshit.

Freedom is not free, the saying goes, because military personnel are out there laying their lives on the line fighting for your right to do as you’re told and toil away at a meaningless job making some rich asshole even richer.

Freedom is not free, because we’re all just so much freer after murdering families on the other side of the planet for corporate profits and geostrategic domination.

Freedom is not free, because we’re all so much freer after teenagers get thrown into the gears of the imperial war machine to provide a good quarterly statement for Raytheon shareholders.

Freedom is not free, because this thing we’re calling “freedom” has been paid for with the blood, lives and limbs of millions of innocents throughout the Global South.

Freedom is not free. That’s why the only people doing as they please in our world are wealthy oligarchs.

Freedom is not free. And unless you’re wealthy enough or psychopathic enough there’s no way you’ll ever find a way to pay the price.

Freedom is not free. That’s why you don’t have any.

[Read On]

How Greedy Corporations Turn the Black American Dream into a Nightmare

By Lynn Parramore

The plight of white blue-collar workers is well-known, but Blacks in that category were feeling the squeeze long before their white counterparts.

It’s 2021, and Black Americans still struggle harder to climb the socioeconomic ladder compared to whites. For many, the trip is now downward, a situation worsened during a pandemic that has impacted them disproportionately.

Economists William Lazonick, Philip Moss, and Joshua Weitz have been researching the key economic forces that have disadvantaged Black men for decades. In a new study focusing on those with only high school diplomas or less, they find that corporate greed – abetted by government policies designed by the wealthy – turned the dreams of once-upwardly mobile citizens into ashes.

[Read On]

How Corporations Crush the Working Class

TRANSCRIPT:

The most dramatic change in the system over the last half-century has been the emergence of corporate giants like Amazon and the shrinkage of labor unions.

The resulting power imbalance has spawned near-record inequalities of income and wealth, corruption of democracy by big money, and the abandonment of the working class.

Fifty years ago, General Motors was the largest employer in America. The typical GM worker earned $35 an hour in today’s dollars and had a major say over working conditions.

Today’s largest employers are Amazon and Walmart, each paying far less per hour and routinely exploiting their workers, who have little recourse.

The typical GM worker wasn’t “worth” so much more than today’s Amazon or Walmart worker and didn’t have more valuable insights about working conditions.

The difference is those GM workers had a strong union. They were backed by the collective bargaining power of more than a third of the entire American workforce. 

Today, most workers are on their own. Only 6.4% of America’s private-sector workers are unionized, providing little collective pressure on Amazon, Walmart, or other major employers to treat their workers any better.

Fifty years ago, the labor movement had enough political clout to ensure labor laws were enforced and that the government pushed giant firms like GM to sustain the middle class.

Today, organized labor’s political clout is minuscule by comparison. 

The biggest political players are giant corporations like Amazon. They’ve used that political muscle to back “right-to-work” laws, whittle down federal labor protections, and keep the National Labor Relations Board understaffed and overburdened, allowing them to get away with egregious union-busting tactics.

They’ve also impelled government to lower their taxesextorted states to provide them tax breaks as a condition for locating facilities there; bullied cities where they’re headquartered; and wangled trade treaties allowing them to outsource so many jobs that blue-collar workers in America have little choice but to take low-paying, high-stress warehouse and delivery gigs. 

Oh, and they’ve neutered antitrust laws, which in an earlier era would have had companies like Amazon in their crosshairs.

This decades-long power shift – the ascent of corporate leviathans and the demise of labor unions – has resulted in a massive upward redistribution of income and wealth. The richest 0.1% of Americans now have almost as much wealth as the bottom 90% put together.

The power shift can be reversed – but only with stronger labor laws resulting in more unions, tougher trade deals, and a renewed commitment to antitrust.

The Biden administration and congressional Democrats appear willing. The House has just passed the toughest labor reforms in more than a generation. Biden’s new trade representative, promises trade deals will protect American workers rather than exporters. And Biden is putting trustbusters in critical positions at the Federal Trade Commission and in the White House.

And across the country, labor activism has surged – from the Amazon union effort, to frontline workers walking out and striking to demand better pay, benefits, and safety protections.

I’d like to think America is at a tipping point similar to where it was some 120 years ago, when the ravages and excesses of the Gilded Age precipitated what became known as the Progressive Era. Then, reformers reined in the unfettered greed and inequalities of the day and made the system work for the many rather than the few.

It’s no exaggeration to say that we’re now living in a Second Gilded Age. And today’s progressive activists may be on the verge of ushering us into a Second Progressive Era. They need all the support we can give them.