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Mayday! on May Day 2014
“Aggressive cost cutting really can make all the difference. That’s the lesson from Caterpillar’s fourth quarter earnings report, out Monday morning. The world’s largest maker of construction and mining equipment saw a 10% drop in fourth quarter revenue, but thanks to job cuts and other cost savings measures, Caterpillar beat the Street and grew its profit by nearly 50%. As a result, its shares have popped more than 6% in early Monday trading.”
This was what Forbes reported at the beginning of 2014 for the international heavy equipment manufacturer. Great news if you’re a shareholder. Not so great if you’re an employee, subject to so-called “restructuring” that has enabled Cat to post record profits. In 2013 Caterpillar reduced its workforce by close to 10,000 workers through job cuts, furloughs, and temporary shut-downs. The good news for shareholders and executives continued in 2014, with a first quarter profit of $922 million, exceeding forecasts. Analysts credit “very solid cost control” for the good performance. Read: job cuts, plant closings, reliance on “flexible workers” (i.e., temporary and part time workers), etc.
“Very solid cost control” did include executive compensation at Caterpillar. Key Executive compensation as reported by Morningstar was down a bit in 2013 to $52 million, but don’t look for the key players to be applying for food stamp assistance. Chief Executive Officer Douglas Oberhelman received nearly $15 million in annual compensation in 2013, though that, too, represented a reduction. Meanwhile, the average Caterpillar salary for all workers is $47,000.
Caterpillar has also been in the news recently for a tax avoidance scheme that allowed them to shelter profits overseas for over a decade in order to avoid paying $2.4 billion in taxes. A Senate report revealed that Caterpillar paid $55 million to tax consultant and auditor Price Waterhouse Coopers which helped it transfer $8 billion in profits to a Swiss subsidiary over a thirteen year period. (The New York Times, April 1). The bottom line in this whole story? Shareholders and executives win, workers and the American public lose. (Then there’s the sale of heavy equipment helping to maintain Israel’s occupation of the West Bank – building the separation barrier, home demolitions, settlement construction, etc. But that story is for another time.)
Caterpillar, of course, is not the only corporation following this script. This week Pfizer announced a bid to buy AstraZeneca, allowing it in part to keep profits overseas and avoid paying U.S. taxes. Pfizer’s last mega-merger in 2008 with Wyeth led to the loss of nearly 52,000 jobs by 2013. Is it any wonder that the stock market is booming, executive compensation is soaring, while post-recession employment drags and income inequality grows?
After adjusting for inflation, the average household’s take home pay in the United States declined from $55,627 in 2007 to $51,017 in 2012. This week The Times reported on the unbalanced recovery. During the recession 2 million low wage ($9.48 to $13.33 per hour) jobs were lost; since 2010 nearly 4 million new low wage jobs were created. During the recession 3.5 million mid wage jobs ($13.73 to $20.00 per hour) were lost; 2.5 million have been created since the recession. Meanwhile, 3.7 million higher wage jobs ($20.00 to $32.62 per hour) were lost during the recession while just less than 3 million were added since. “In essence,” The Times reported, “the poor economy has replaced good jobs with bad ones.” The bad economy? Or is it more accurate to say that during the Great Recession, corporate decision making took the opportunity to replace good jobs with bad ones, or eliminate good jobs altogether?
May 1 – May Day – commemorates the Haymarket uprising in Chicago in 1886 that began as a march by workers in support of the eight hour workday. It continues to be celebrated in many places as a day to honor workers and to rally workers to the labor movement. But these days May Day is perhaps more aptly described as a collective “Mayday!” on behalf of workers who have been under assault for decades – lost jobs, suppressed wages, broken unions, attacks on collective bargaining, reduced benefits, and on and on it goes. The big yellow bulldozers may still thrill little boys. But more and more they represent the corruption of our economic system. May Day may no longer be much of a celebration for most workers, but rather a desperate cry for rescue in a country governed by an elite that seldom seems to be listening.
John H. Thomas
May 1, 2014
~John Thomas serves on the Arise Chicago Board of Directors.
Posted with permission. Originally found at the John Thomas blog on the Chicago Theological Seminary website.
Worker Freed from ICE Detention / Trabajador Liberado de Detención de ICE
Last month a group of Mexican immigrant bricklayers contacted Arise Chicago for help regarding one of their co-workers who was facing imminent deportation following an arrest based on a report made by their employer in retaliation for their efforts to collect wages owed them.
Arise Chicago organizers quickly discerned that the bricklayers were owed thousands of dollars in back pay for construction work they had already performed. When the men demanded that their boss pay them, their employer threatened to call local law enforcement and have them arrested. When the men insisted that they be paid, their boss reported them to the DuPage County Sherriff’s Office which arrested two of the men for driving without a license and turned one of them, Santiago Vazquez, over to Immigration and Customs Enforcement (ICE) for reinstatement of an old deportation order.
Santiago has resided in the US for more than 15 years, is a Chicago homeowner and the father of two teenage girls, both of whom are lawfully residing in the US in Deferred Action for Childhood Arrivals (DACA) status.
It is unlawful to retaliate against employees who collectively complain about working conditions, and Arise staff was highly suspicious of the role of local law enforcement and federal immigration authorities played in the case. Arise organizers contacted Arise Legal Advisory Board attorney Kalman Resnick, who requested that ICE grant Santiago a stay of deportation so he and his co-workers could pursue their claims for unpaid wages.
ICE quickly granted the stay of deportation and released Santiago. Kalman and his law partner, Josh Karsh, with assistance from Arise Chicago, are now preparing to file a lawsuit to recover the wages due Santiago and his co-workers.
Trabajador Liberado de Detención de ICE
El mes pasado, un grupo de trabajadores inmigrantes de la construcción, se comunicaron con Arise Chicago para solicitar ayuda referente a un compañero de trabajo, el cual enfrentó una deportación inminente tras haber sido arrestado basado en un reporte hecho por su empleador en represalia por sus esfuerzos en reclamar los salarios que se les deben.
Los organizadores de Arise Chicago enseguida descubrieron que la compania les debía miles de dólares por trabajo que ellos ya habian realizado. Cuando estos hombres le exijieron a su jefe que les pagaran, su empleador los amenazó con llamar a las fuerzas del orden para que los arrestaran. Cuando los trabajadores insistieron por su paga, su jefe los reportó ante la Oficina del Sheriff del Condado de Du Page, el cual arrestó a dos de ellos por manejar sin licencia, y enviando a uno de ellos, Santiago Vázquez, a la oficina del Buró de Vigilancia de Inmigración y Aduanas (ICE), para la reinstalación de una vieja orden de deportación.
Santiago ha vivido en los Estados Unidos por mas de quince años. Es dueño de casa en el área de Chicago y padre de dos hijas las cuales residen legalmente bajo el estatus de acción deferida (DACA, Deferred Action for Childhood Arrivals).
Es ilegal el uso de represalias en contra de los trabajadores que, en conjunto, se quejan acerca de las condiciones de trabajo, asi que Arise Chicago tuvo considerables sospechas acerca de el papel que las fuerzas del orden y las Autoridades Federales de Inmigración jugaron en el caso.
Los organizadores se comunicaron con el abogado Kalman Resnik, miembro del Comite de Asesoria Legal de Arise, el cual solicitó al ICE que aplazara el proceso para que Santiago y sus compañeros puedan seguir sus reclamos por el salario que se les deben.
ICE suspendió el proceso de deportación y liberó a Santiago. Kalman y otro abogado de su despacho, Josh Karsh, junto con la asistencia de Arise Chicago, preparan ahora una demanda legal en favor de recuperar los salarios que se le deben a Santiago y su compañeros.-traducido por Luis Juárez
Arise Board Stands with Wendy’s Workers
Workers at giant fast food and retail chains work hard for multi-million dollar corporations but receive low pay, usually at or only slightly above the minimum wage. Workers in Chicago and around the country have been organizing to win $15/hour and the right to form a union without retaliation. Sixty-two year old Miss Mary has been working at a downtown Wendy’s for several years. After leading her store in taking workplace actions she saw her hours cut to a level that would not allow her to afford her Section 8 rent. Last Friday Arise board members Rev. Wendy Witt from the Chicago Temple and Rev. Liz Muñoz from St. James Episcopal Cathedral accompanied Mary in a delegation to the Wendy’s manager asking her to sign a letter that would allow Mary’s rent to be adjusted based on her new hours. With Rev. and Liz and Wendy’s support, Mary’s manager signed the letter, allowing her to keep her housing while she continues to fight for better wages.
Read more about Vince and Mary’s stories here.
Show Chicago’s fast food and retail workers your support by signing their online ally petition!
Calling All Illinois Religious Leaders
Sign the Faith Leaders Letter for Tax Fairness asking political leaders to support a graduated income tax in Illinois!
Chicago Tribune: What would a $15 minimum wage mean to the economy?
What would a $15 minimum wage mean to the economy?
National effort plays out in Chicago too
Originally Posted by the Chicago Tribune
August 02, 2013
By Alejandra Cancino, Mugambi Mutegi and Gregory Karp, Chicago Tribune reporters
A national push to raise employee wages at restaurants, supermarkets and elsewhere to as high as $15 per hour pits labor organizers against business owners in an emotional debate about economics and the cost of living.
Not directly included in the discussion is an important constituency: the customers. If they support the idea of an increased minimum wage, they will likely see higher prices for hamburgers, clothes and other goods.
Economists and others who study consumer behavior say that shoppers may react sympathetically to the call for higher pay for workers in the service industry who struggle to make ends meet, but in the end they will take care of their own needs.
“I would pay a couple of dollars more for products, but the question then is, do I get a raise too? If my salary goes up, I will be willing to pay even more for my products,” R.B. Barrett, 45, said outside a Whole Foods store in the Lakeview neighborhood where about 100 people chanted and passed out fliers Wednesday outlining their demands: $15-per-hour wages and better working conditions.
Business groups say significant wage increases would require many of their members to lay off workers and pass on costs to consumers. Some argue that doubling wages, combined with the increased employer costs for the national Affordable Care Act, could put their members out of business.
“You can’t isolate just the cost of a sandwich at a restaurant,” said Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Association. “Lifting the minimum wage in that manner, to that degree, increases pressure on all of the other industries around it.”
On Wednesday and Thursday, protests were held in Chicago as part of a nationwide movement of organized events that included demonstrations in New York, Detroit and Milwaukee. Many who protested here earn an hourly wage around the state’s minimum of $8.25, which would translate into an annual salary of about $17,000. A raise to $15 per hour would mean a salary of $31,200.
In Chicago, the demonstrations were run by the Workers Organizing Committee of Chicago, a recently formed union backed by local labor groups, including Arise Chicago, the Chicago Teachers Union and local affiliates of the Service Employees International Union.
The workers’ push for higher wages comes as the nation has yet to create all the jobs lost during the recession. There are nearly 12 million people unemployed still looking for a job. Economists say many thousands more have given up hope.
The high unemployment seen in the aftermath of the Great Recession is hurting wages across the board, said Heidi Shierholz, a labor economist with the Economic Policy Institute, a labor-oriented think tank based in Washington.
“There is a very tight link between high unemployment and low-wage growth. It’s just as simple as if your employer knows you don’t have any outside options. They don’t have to pay you wage increases to keep you,” Shierholz said. Those earning the lowest wages, she added, have been hurt the most.
Before the 1970s, wages for most workers grew at about the same rate as productivity, but globalization, politics and economic policy broke that relationship, Shierholz said.
The minimum wage also followed that trend, and if it had continued, she added, the federal minimum wage today would be closer to $18 per hour instead of $7.25. That doesn’t mean that the economy could handle doubling the minimum wage overnight, but it could start increasing slowly, she said.
“This campaign underscores that the wages for the whole bottom swath of the wage distribution are just too low,” Shierholz said.
Lorraine Chavez, a spokeswoman for the Workers Organizing Committee union, said the goal is not to double wages overnight. Workers also want better working conditions and full-time employment. And the union is prepared to continue to strike and plan other events until they reach all those goals.
“Workers have no choice,” Chavez said, adding that at $8.25 per hour, many workers qualify for food stamps and can’t afford to pay rent.
While consumers say they empathize with the struggle, for the many whose wages have stagnated and don’t feel confident about the future, price trumps making a moral or ethical purchase.
“There is a big competition inside every consumer’s mind between really wanting to do something that would help other people and really wanting to save money,” said Kit Yarrow, a professor at Golden Gate University in San Francisco who specializes in consumer psychology.
Yarrow said consumers would likely choose to support a noble cause once or twice, but ultimately personal financial security would win. That’s partly because while consumers feel safe now that the recession is over, they don’t feel OK about the future.
“I think the wound was so deep and so great during the recession and so frightening that it made people kind of permanently a little bit more cautious about spending,” Yarrow said.