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If You’re Surprised By America’s Wage Stagnation, Then You’re Not Paying Attention

By Larry Willis, President of the Transportation Trades Department of the AFL-CIO

There’s been a lot of talk lately about the economy and how well it’s doing. The unemployment rate has steadily fallen for years now, and jobs are being created.

But wages? Not so much.

The latest jobs report shows that while the unemployment rate remains low, wages aren’t keeping up with inflation. Instead, they are falling flat.

Some economists and policymakers seem baffled — but TTD and our affiliated unions aren’t.

Yes, there are a number of reasons for this trend. But, as we reflect ahead of Labor Day, it is clear that anti-union policies, like so-called “right to work” laws, and failure to invest in our crumbling infrastructure are contributing factors that need to be called out and addressed.

Unions act as a check against corporate power, making union representation one of the most reliable ways for working people to improve their quality of life and secure a living wage. In fact, data shows a direct correlation between high union density and higher wages and better benefits. And while union members are more likely to have a pension, employer-paid health insurance, and earn an average of 13.2 percent more than their non-union counterparts, the union difference doesn’t just affect those covered by collective bargaining agreements. Strong union contracts influence competition, driving up wages, benefits, and standards of living for non-union workers too.

So what happens when working people don’t have access to unions? Take a look around – we’re seeing it right now. While millions of Americans struggle just to get by, the average CEO makes nearly $14 million annually – 200 times what an average employee earns. This is not a coincidence. It is the result of ruthless, decades-long attacks on the rights of working people to demand better for themselves and their families.

As for all those jobs being created, it is time we ask ourselves what kind of jobs they are. Based on an analysis from MIT’s living wage calculator, it takes a typical family of four (two adults, two children) more than $58,000 annually to have their basic needs met. A minimum-wage, non-union job just won’t cut it.

This country needs more good jobs — the kind that allow people to own a car, buy a house, and put their kids through college. Attacks on the rights of working people to negotiate together for better wages and benefits are not the only reasons these jobs are lacking. Failure by political leaders to invest in our nation’s transportation system hasn’t just left us with infrastructure that’s crumbling and dangerous — this inaction has also resulted in missed opportunities to create as many as 900,000 long-term, good paying jobs, annually.

Thanks to high union density in transportation and infrastructure industries, people working in these sectors — including frontline workers who build, operate, and maintain our transportation system — earn higher pay, better benefits, and more job security than their low-wage counterparts. In fact, at $38,480, the median annual wage paid by occupations in infrastructure is nearly $4,000 higher than the national median wage.

When Congress considers transportation and infrastructure spending, TTD and our affiliated unions will fight for policies that ensure these investments will continue to create the type of jobs we know our country needs. We cannot support an infrastructure plan that threatens long-standing labor standards or undermines the collective bargaining rights of working people.

There are ways to turn things around and make our economy work for everyone. But doing so requires taking a stand against the rich and powerful — something working people cannot do alone. America needs a commitment from political leaders on both sides of the aisle, not only to invest boldly in infrastructure, but to end attacks on the rights of working families, and understand that strong unions aren’t part of the problem — they are part of the solution.

Chicago Teachers Pension Fund Win First Anti-Trust Case Against Big Banks

 Ruling advances case alleging world’s largest investment banks conspired to maintain anti-competitive stranglehold over $275-trillion market.

Case brought forward by the Chicago Teachers Pension Fund

NEW YORK  — In a critical victory for investors and traders across the country, a federal judge ruled today to uphold a majority of claims in a class action lawsuit against many of the world’s largest financial institutions for allegedly conspiring to engineer and maintain a collusive and anti-competitive stranglehold over the market for interest rate swaps (IRS) in violation of federal antitrust laws. In a decision issued by U.S. District Judge Paul Engelmayer, the court ruled that 11 “Dealer Defendant” banks, including Bank of America J.P. Morgan Chase & Co, Citigroup, Goldman Sachs, and Credit Suisse, must face claims brought forth in litigation led by the Chicago Teachers Pension Fund, which seeks an injunction against the banks’ anticompetitive arrangement and compensatory damages.

“We are pleased with the judge’s decision and look forward to vigorously pursuing justice for the Chicago Teachers Pension Fund and other investors harmed by this conspiracy by the world’s biggest banks,” said Michael Eisenkraft, a partner at Cohen Milstein Sellers & Toll, which is co-lead counsel for the plaintiffs in the class action.

 “For far too long, the world’s banking giants have shut investors out of electronic trading, and today’s ruling is a critical victory in leveling the playing field,” said Carol Gilden, a partner at Cohen Milstein Sellers & Toll also representing the Chicago Teachers Pension Fund and working on the case. “Interest rate swaps represent a multi-trillion-dollar market that traders across the world depend upon, and we will fight to ensure investors have access to the transparency, competitive pricing, and faster execution denied to them by the Defendant Banks.”

Interest rate swaps, which are regularly used by a broad spectrum of investors, including pension funds, university endowment funds, hedge funds, and municipalities, allow an entity to swap its fixed interest-rate payments for the floating interest-rate payments of a benchmark, or vice-versa.  Given their daily use across the financial industry, interest rates swaps are a critical, multi-trillion dollar market which investors depend upon.

According to the lawsuit filed in November 2015 in the U.S. District Court, Southern District of New York, interest rate swaps have been standardized and ripe for exchange trading for years. Exchange trading brings transparent and competitive pricing and faster execution to a market, thus bringing significant benefits to investors.

As alleged in the complaint, the market for interest rate swaps has been economically ready for standardized exchange trading, but investors remain stuck trading IRS in an inefficient and antiquated market dominated by the Dealer Defendants. The lawsuit alleges that by blocking the entry of exchanges into the IRS market, the banks force investors to trade with them in an opaque and inefficient over-the-counter market, allowing the Dealer Defendants to extract billions of dollars in higher fees and costs. According to the lawsuit, the Dealer Defendants maintained this profit center by conspiring to squash potential market entrants that threatened to bring competition and transparency to the buy-side in the IRS market. As detailed in the complaint, the Dealer Defendants have jointly threatened, boycotted, coerced, and otherwise eliminated any entity or practice that had the potential to bring exchange trading to investors in the IRS market.

The plaintiffs are being represented by Cohen Milstein Sellers & Toll and Quinn Emanuel Urquhart & Sullivan.

NH Congressional Delegation Adamantly Opposes Trump’s Budget Proposal

Today, #45 released his disastrous budget proposal.  The budget slashes major departments and includes cuts to Social Security, Medicare, Education, Student Loan programs, repeals the ACA, and guts worker health & safety programs.

Even though, Candidate Trump promised not to make any cuts to Social Security and Medicare, it turns out he was lying.

After all the cuts, #45 proposes more tax cuts to the ultra wealth, like himself, and to multinational corporations who are hiding trillions of dollars overseas already.

“According to Mulvaney, the proposal looks ‘at the budget through the eyes of the taxpayer’ instead of those who receive benefits from federal programs.” (RawStory)

“If I can look you in the eye and say I’m going to take this money from you so I can help this injured vet, I can do that in good conscience,” Mulvaney continued. “I am a lot less comfortable to the point of not wanting to look you in the eye and say, ‘Look, I need to take this money from you to give to this person over here who really isn’t disabled but is getting a disabled benefit or this person over here who is supposed to use the money to go to school but isn’t actually going.” (RawStory)

The New Hampshire Congressional delegation is united in their opposition to these cuts.

Senator Jeanne Shaheen:

“The President’s budget is even worse for New Hampshire than initially feared,” said Shaheen. “This budget would be detrimental to the health and well-being of Granite Staters. Among its many reckless provisions this proposal would throw millions of Americans off of Medicaid, a key program in our fight against the opioid epidemic and in making sure our children and seniors have the care they need. It also cuts funding for other mental health and substance misuse treatment programs. All in all, this budget completely ignores the urgency of the opioid crisis and would pull the rug out from under New Hampshire’s efforts to combat it.

“This budget also continues the Trump administration’s campaign to roll back women’s rights by defunding Planned Parenthood, jeopardizing vital preventive healthcare for nearly 12,000 women in New Hampshire. In a further assault on New Hampshire families, the budget cuts the Children’s Health Insurance Program. Similarly, it’s dumbfounding that this budget eliminates low income heating assistance for thousands of New Hampshire families and seniors, and economic development for the North Country.

“Fortunately, there’s bipartisan agreement that this mindless proposal should be rejected by Congress. As a member of the Appropriations Committee, I look forward to working across the aisle on bipartisan government funding legislation that will responsibly fund key programs that many Granite Staters depend on. The budget is a reflection of an administration’s priorities, and what is clear from this budget is that the Trump administration prioritizes tax cuts for the wealthy over New Hampshire children, seniors, and families.”

Senator Maggie Hassan

“President Trump’s budget proposal would directly undermine our economy and the ability of New Hampshire families to get ahead and stay ahead. This irresponsible proposal would jeopardize critical economic priorities and hurt job-creating businesses in order to pay for tax cuts for corporate special interests and an expensive and ineffective border wall. I am particularly disturbed to see cuts to programs that are essential to our efforts to combat the heroin, fentanyl, and opioid crisis. The drastic cuts to the Medicaid program in this proposal go above and beyond even the devastating cuts included in the Trumpcare bill, further hurting people struggling with substance use disorder, students who experience disabilities, and older Americans in nursing homes. President Trump’s proposed cuts to the Department of Education would also undermine our public education system and hurt efforts to develop the workforce our businesses need to thrive and grow. I will strongly fight this budget proposal and urge my colleagues to work across the aisle on a budget that strengthens our economy, invests in our businesses, and supports New Hampshire families.”

Congresswoman Carol Shea-Porter (NH-01)

“A budget is a moral document, and this immoral budget does not reflect the values we share as Americans. The President’s Fiscal Year 2018 budget proposal would hurt students, working Americans, seniors, and our most vulnerable citizens by slashing health care, nutrition assistance, medical and scientific research, education, and other programs. President Trump’s budget reveals his true priorities: giving huge tax cuts to the wealthiest individuals and the biggest corporations.

“Today’s budget abandons the bipartisan progress we made earlier this month, when I voted for and the President signed an omnibus spending bill. As Congress works through the Fiscal Year 2018 budget process, I will fight against reckless and irresponsible cuts that target working families and our most vulnerable citizens; against the President’s proposal to balance the budget on the backs of working Americans and our seniors while giving the wealthiest even bigger tax cuts; against a new BRAC round; and for the priorities that were reflected in this year’s bipartisan omnibus bill.”

Congresswoman Annie Kuster (NH-02)

“The budget proposal released today by President Trump confirms many of our worst fears about the priorities of his administration,” said Congresswoman Kuster. “This budget is cruel, shortsighted, and would be a disaster for efforts to strengthen the middle class. It would hurt hard working families and communities throughout New Hampshire and the country. From public education and student loans to economic development programs like Community Development Block Grants and the Northern Border Regional Commission, this budget would decimate programs for those who can least afford it. It would jeopardize clean air and water and our response to the opioid epidemic, all so that President Trump and his millionaire and billionaire friends can receive a massive tax giveaway. I’ll do everything in my power to fight the harmful elements of this budget and protect programs for Granite State veterans, seniors, and families.”

As if the above cuts were not enough already here are more details on the draconian cuts that Trump is proposing.

  • A $610 billion cut to Medicaid over 10 years, which combined with House-passed American Health Care Act cuts would slice total Medicaid funding almost in half by 2027. About 65 percent of nursing home residents are supported primarily by Medicaid;
  • A $5.8 billion cut to the Children’s Health Insurance Program (CHIP);
  • A $7 billion cut to National Institutes of Health (NIH), which provided $98.9 million in critical medical research funding in New Hampshire for Fiscal Year 2016, supporting approximately 1,300 jobs;
  • A 10.7% cut to the National Science Foundation, which provided 125 awards totaling approximately $42 million to New Hampshire institutions in Fiscal Year 2016;
  • A 31.4% cut to the Environmental Protection Agency (EPA), including cutting critical climate science research;
  • Authorization for a new round of Base Realignment and Closure (BRAC);
  • A 29% cut to State Department funding, crippling our nation’s ability to exert soft power and respond to humanitarian crises worldwide;
  • A $193 billion cut over 10 years to the Supplemental Nutrition Assistance Program (SNAP), which helped 93,302 Granite Staters afford food as of February 2017;
  • $72.5 billion cut from programs that support people with disabilities, including Social Security disability insurance;
  • Elimination of the Low Income Home Energy Assistance Program (LIHEAP), a critical fuel assistance program for low-income households in New Hampshire;
  • A $143 billion cut over 10 years to student loan, financial aid and repayment programs that facilitate access to higher education;
  • A reversal of a proposed 95% cut to the Office of National Drug Control Policy (ONDCP). After reports indicated that the President’s budget would include severe ONDCP funding cuts, which the NH delegation has already opposed.

This immoral budget must not pass.  We need to stop trying to balance our national budget on the backs of working people and specifically by taking from those who need it the most.  We must stop this tax giveaway to the wealthiest Americans and corporations who already fail to pay their fair share of tax and hide profits overseas to avoid being taxed at all.

The government should be working together to help all of the people, not a select few of ultra wealth, (most likely Trump) campaign donors.

Income Inequality Grows As CEO Pay Jumps 6 Percent To 347 The Average Worker

Image courtesy of the AFL-CIO

A new report and searchable database from the AFL-CIO’s Executive Pay Watch highlights the lavish compensation executives receive while workers wage remain stagnant.

Income inequality has become one of the largest economic issues facing America.  As workers wages remain stagnant, corporations continue to rake in massive profits and pay their executives lavish salaries.

According to the new AFL-CIO Executive PayWatch, the average CEO of an S&P 500 company made $13.1 million per year in 2016 – 347 times more money than the average rank-and-file worker. CEO pay for major U.S. companies has risen nearly 6 percent, as income inequality and outsourcing of good-paying American jobs have increased.

“This year’s report provides further proof that the greed of corporate CEOs is driving America’s income inequality crisis,” said AFL-CIO President Richard Trumka. “Big corporations continually find ways to rig the economy in their favor and line their CEOs’ pockets at the expense of the workers who make their businesses run. Too often, corporations see workers as costs to be cut, rather than assets to be invested in. It’s shameful that CEOs can make tens of millions of dollars and still destroy the livelihoods of the hard-working people who make their companies profitable.”

The Executive PayWatch website showed that in 2016, the average production and nonsupervisory worker earned approximately $37,600 per year. When adjusted for inflation, the average wage has remained stagnant for 50 years.

Take for example, Raymond Barrette, CEO of White Mountain Insurance Group LTD of Hanover, NH.  Barrette raked in $8.1 million in salary and stock options.  That is 270 times the average rank and file worker.

Another example comes from Patrick T. Ryan, CEP of Press Ganey Holdings in Wakefield, Massachusetts. He collected a whopping $28.9 million in compensation, 769 times the average worker.

The report allows viewers to search their comprehensive database of CEO pay by industry or state.

Screenshot from Executive Pay Watch

The PayWatch site also highlights U.S. corporations that don’t pay taxes on their offshore profits. By “permanently reinvesting” these profits overseas, they can forever defer paying federal income taxes and reinvesting back into the community.

According to the report, Massachusetts based General Electric is holding $82 billion in “Unrepatriated Profits” overseas in tax havens.  That is only one-third of the amount of money Apple is shielding overseas ($230 billion).

The report also highlights the growing trend of corporations offshoring good American jobs at the expense of hard working people.

“Avoiding corporate income taxes is one way CEOs boost their companies’ profits and thereby increase their own pay. This corporate tax avoidance reduces the amount of money that is available for public goods like roads and schools. As a result, our economy increasingly has become out of balance,” wrote the AFL-CIO in their report.

Image courtesy of the AFL-CIO

Mondelēz International, highlighted in this year’s PayWatch, represents one of the most egregious examples of CEO-to-worker pay inequality. The company, which makes Nabisco products, including Oreos, Chips Ahoy and Ritz Crackers, is leading the race to the bottom. Last year, it closed the Oreo cookie line at the iconic Nabisco factory in Chicago, sending 600 family-sustaining jobs to Mexico, where workers face poor labor and safety standards. Mondelēz CEO Irene Rosenfeld made more than $16.7 million in 2016 – about $8,000 per hour.

“Greedy CEOs are continuing to get rich off the backs of working people,” said Michael Smith, who was among hundreds of Nabisco workers from the South Side of Chicago laid off in March of 2016. “I loved working at Nabisco, and I took pride in the work I did to make a quality product. It’s not as if the company isn’t profitable. The Oreo alone brings in $2 billion in annual revenue, and the CEO makes more in a day than most of us made in a year. I just don’t understand the disrespectful attitude toward working people.”

While companies are continuing to put profits over people, working people are fighting back. The AFL-CIO has endorsed the Bakery, Confectionery, Tobacco Workers and Grain Millers’ International Union (BCTGM) boycott of Nabisco products made in Mexico.

These corporations are just examples of the insatiable greed that has taken over Corporate America.  The never ending race to the bottom continues to punish worker, shipping their jobs overseas.  To begin to address the growing income inequality in America, we must first address the outrageous pay ratios between CEO’s and rank and file workers.

Women Honored On “Equal Pay Day”

Yesterday, April 4th, was Equal Pay Day, the day when women finally earn as much as their male counterparts did in the previous year.

“Pay discrimination undermines our country’s fundamental principles of equality. As long as millions of American women continue to only earn 79 cents for every dollar earned by men, we have to keep fighting,” said Senator Jeanne Shaheen. “Equal Pay Day is an important reminder that, despite recent progress, we still have a long way to go to end pay discrimination. A recent study projected that the wage gap in New Hampshire will close in 2079. Waiting 62 years to close the wage gap is just unacceptable, hurting Granite State women, their families and our economy. It’s time to make equal pay for equal work a reality.”

In the U.S. Senate, Senator Maggie Hassan joined Senator Shaheen and 40 other Senators in reintroducing the Paycheck Fairness Act.

The Paycheck Fairness Act would strengthen the Equal Pay Act of 1963, guaranteeing that women can challenge wage discrimination and hold employers accountable. Despite making up half of the workforce in the country, women still make only 80 cents, on average, for every dollar earned by a man. The gap widens for women of color: African-American women only earn 63 cents on the dollar and Hispanic only earn 54 cents, on average, compared to white men. 

“It’s long past time for women to earn an equal day’s pay for an equal day’s work,” Senator Hassan said. “Wage discrimination is unacceptable and it strains the financial security of thousands of Granite State families and threatens our economic well-being in New Hampshire. I am proud to reintroduce the Paycheck Fairness Act to help ensure that all hard-working Granite Staters and Americans can earn a fair pay check and have the opportunity to get ahead and stay ahead.” 

The Paycheck Fairness Act would strengthen and close loopholes in the Equal Pay Act of 1963 by holding employers accountable for discriminatory practices, ending the practice of pay secrecy, easing workers’ ability to individually or jointly challenge pay discrimination, and strengthening the available remedies for wronged employees.

In the U.S House, Congresswoman Carol Shea-Porter today co-introduced the Paycheck Fairness Act and highlighted the gender pay gap on Equal Pay Day. 

“Working women are America’s mothers, daughters, sisters, and wives. We’re America’s factory and office workers, health care professionals and scientists, business executives and teachers,” said Shea-Porter. “Women are working everywhere, but in America, in 2017, women still make only 80 cents for every dollar a man earns. Equal pay for equal work is a fairness issue and an economic issue: New Hampshire families rely on women’s wages to make ends meet, and when women are paid less than men for the same work, it affects the whole family.”

Compared to national figures, the disparity in New Hampshire is even greater – the state ranks 47th in the nation for paycheck fairness, according to the National Women’s Law Center, with women in New Hampshire losing an average of $534,120 over a 40-year career due to the gender pay gap.

One key way to start closing the pay gap is for Congress to pass the Paycheck Fairness Act, which Shea-Porter has co-introduced in each of her four terms. The Paycheck Fairness Act would strengthen the 1963 Equal Pay Act, close loopholes in the law, and provide effective remedies to women who are not being paid equal pay for equal work.

Shea-Porter is a strong advocate for issues that are important to women and families. She co-introduced the Lilly Ledbetter Fair Pay Act, which became law on Jan. 29, 2009 and ensured that Americans subjected to unlawful gender-based pay discrimination can effectively assert their rights under the federal anti-discrimination law. This February, Shea-Porter co-introduced the Family and Medical Insurance Leave (FAMILY) Act, a bill to create a national paid family and medical leave insurance program and ensure that American workers no longer must choose between a paycheck and caring for a family member, and the Child Tax Credit Improvement Act, which would boost the tax break’s value and ensure it keeps up with the costs working parents face, including the quickly-rising cost of childcare.

“In 2017, it is simply unacceptable that women on average earn 80 cents to every dollar men earn,” said Congresswoman Annie Kuster. “This is an injustice not only to women, but also to the many American families that count a woman as the primary or co-breadwinner. It’s long past time we correct this injustice, and I will continue my efforts in Congress to end the pay gap and ensure women receive the compensation they deserve.”

Since taking office, Congresswoman Kuster has been a strong advocate for equal pay for women.  She is a cosponsor of the Paycheck Fairness Act, which would help reduce wage disparities between men and women across the country. In addition, she authored a Women’s Economic Agenda, a plan for Congress to prioritize initiatives to reduce pay disparities based on gender and support Granite State women and their families. She has also hosted a series of roundtables to hear directly from women business owners and other professionals all across New Hampshire about what more Congress can do to help Granite State women succeed and receive fair pay in the workplace.

The women senators of the NH Senate Democratic Caucus also released a statement in recognition of Equal Pay Day: 

“Despite decades of research and advocacy, pay discrimination between male and female workers continues to undermine our nation’s fundamental principles of equality. Today, American women on average earn just 80 cents for every dollar earned by men. That disparity increases significantly for women of color. This isn’t just a women’s issue–it’s a family issue and an economic issue.”

“In fact, research conducted by the Institute for Women’s Policy Research finds that ensuring equal pay for every woman in America would cut poverty among working women and their families by more than half and add an estimated $482 billion to the national economy. In New Hampshire, where women earn 76.4 cents for every dollar earned by men, recent studies of the wage gap anticipate that it will take 62 years for working women and men to reach pay parity in our state. And in that time, another generation of women will come and go without receiving just compensation for their contributions.”

“It seems that the more things change, the more they stay the same. We’re not willing to wait until 2079 to resolve the issue of equal pay for equal work. The women of this country and our state have waited long enough.”

Senators Push Legislation To Increase Child Care Tax Credit

Shaheen, Gillibrand, Schatz Introduce ‘Right Start’ Bill to Expand Child Care Tax Credit for Working Families

 The Right Start Child Care and Education Act would make child care more affordable, strengthening the economy 

(Washington, D.C.) – U.S. Senators Jeanne Shaheen (D-NH), Kristen Gillibrand (D-NY), and Brian Schatz (D-HI) introduced the Right Start Child Care and Education Act, legislation that would expand the child care tax credit and provide other assistance to help families afford child care. The legislation would expand the Child and Dependent Care Tax Credit (CDCTC), which was first enacted in 1976 to help working families pay for child care. The tax credit does not reflect the current costs of child care, which have risen since the CDCTC was first enacted and can exceed $10,000 annually. In New Hampshire, the cost of child care is nearly $12,000 for a single child. 

“The rising costs of child care is a real burden on families in New Hampshire and across the country, and the Right Start Child Care and Education Act would provide much-needed relief for parents working to make ends meet,” said Senator Shaheen. “Making child care more affordable will help parents, especially working mothers, re-join the workforce, and strengthen our economy.”

“This bill would help reduce the enormous financial burden that comes from paying for child care,” said Senator Gillibrand. “Child care is essential for many families with new babies and young children, but in some states, including New York, it costs as much as college tuition. This legislation would go a long way toward making child care more affordable for families, and I will continue urging all of my colleagues to support it in the new Congress.” 

“Increasing the Child and Dependent Care Tax Credit will provide much-needed assistance for working families,” said Senator Schatz. “In Hawai‘i, child care can cost more than $10,000 per year, and nationally costs are rising. This tax credit will help provide economic security for families and allow parents to go back to work.” 

The Right Start Child Care and Education Act would increase the Child and Dependent Care Tax Credit, making it equal to 35 to 50 percent of eligible expenses, up significantly from the current range of 20 to 35 percent, and increase the maximum eligible expenses from $3,000 per child to $6,000 per child. The bill would also improve assistance for lower-income families by making the credit refundable, and make it easier for employers to provide working parents with childcare by increasing the tax credit for employer-provided childcare.  It also aims to improve the availability of high-quality child care by adding a new tax credit for college graduates who become childcare professionals. 

The Right Start Child Care and Education Act was introduced in the 113th Congress, and again in the 114th Congress, by fmr. Senator Barbara Boxer (D-CA) and co-sponsored by Senators Shaheen, Gillibrand and Schatz.

Social Security COLA Falls Short for Seniors

social securty 1Small cost-of-living increase triggers huge Medicare Part B premium hike for many retirees

American Federation of Government Employees National President J. David Cox Sr. is calling on Congress to pass emergency legislation to prevent massive increases in Medicare Part B premiums for millions of retirees next year.

The government today announced a 0.3 percent cost-of-living adjustment for federal retirees and Social Security recipients. The COLA is based on the year-over-year change in the prices for goods and services purchased by hourly and clerical workers.

This small COLA has inadvertently triggered a massive increase in Medicare Part B premiums for the 30 percent of beneficiaries who do not currently receive Social Security benefits.

Premiums for Medicare Part B are expected to increase 23 percent next year, from $121 a month to $149 a month. A so-called “hold harmless” provision prevents Medicare Part B premiums from increasing by more than the dollar increase in an individual’s Social Security payment. But for the 16 million retirees who don’t receive Social Security, including 1.6 million federal retirees under the Civil Service Retirement System, the full increase must be paid unless Congress acts.

“Congress must act now to prevent a massive increase in Medicare Part B premiums for this group of retirees,” Cox said. “Although most seniors would be protected, this group will have to pay more solely because of the uniqueness of their pension system.”

Congress last year extended the hold harmless provision to cover all Medicare Part B beneficiaries when there is no cost-of-living adjustment. However, this provision does not apply when there is a small COLA, as there will be in 2017.

Even without the increase in Medicare Part B premiums, retirees will have to tighten their belts to account for next year’s miniscule cost-of-living adjustment. Retirees already are facing a 6.2% increase in their health insurance premiums next year.

“Prices for many items that seniors must purchase are rising faster than the overall inflation rate,” Cox said. “Forcing this group of retirees to shoulder such a huge cost burden will have a devastating impact on their already modest living standards.”

The Alliance for Retired Americans have been pushing to increase Social Security benefits and change the way cost of living is calculated.

“The Alliance for Retired Americans is deeply disappointed by the announcement today that there will be a miniscule 0.3% benefit increase for millions of Social Security beneficiaries in 2017,” said Richard Fiesta, Executive Director of the Alliance for Retired Americans. “For the average retiree, that means just a $5.00 per month increase, not enough to keep up with the cost of their prescription medications. This follows a 0% COLA in 2016. Most retirees are going to continue to have a hard time paying for basic necessities.”

“That’s why Congress must expand earned Social Security benefits and change the formula used to calculate future COLAs to the Consumer Price Index for the Elderly (CPI-E).  The CPI-E would base the calculation on what seniors actually spend their money on. That list includes items such as health care and housing, which account for most retirees’ spending,” Fiesta added. 

The AFL-CIO was “disappointed” with this COLA announcement.

“A weak increase that amounts to a mere $5.00 more a month for the average retired worker is a disappointment for the millions who rely on Social Security to stay afloat during retirement,” said Richard Trumka, President of the AFL-CIO. “Protecting our seniors against inflation is one of the many obligations we have to retired Americans. The 2017 adjustment falls short of that goal because it fails to reflect seniors’ extraordinary expenses.”

 “The 2017 COLA not only fails to keep pace with seniors’ high health care and prescription drug costs, it also means millions of retirees, including many retired public employees, will be hit hard because the law fails to protect them against large Medicare Part B premium increases when inflation is low. State Medicaid budgets that cover Medicare premiums for low-income seniors similarly will be affected. We urge Congress to step in and limit the coming financial blow to thousands of vulnerable retirees and state budgets,” Trumka added.

Yo, Wharton! Tax Cuts DON’T “Create Jobs” !!!

Photo by mSeatttle via Flickr Creative Commons license

Photo by mSeatttle via Flickr Creative Commons license

Just how bizarre can this election get?

Yesterday, the Wharton School of Business released its predictions about the long-term effects of Donald Trump’s tax plan.  Their report uses something called “dynamic scoring” – which is an economic model that assumes tax cuts will create jobs.  (You remember that old saying about the word “assume.”)

Somebody call the fact-checkers.  That assumption should have been thoroughly debunked by now.

Remember, that assumption was the basis of the 2001 Bush tax cuts.  (Remember how those tax cuts were supposed to be “temporary”?)  That’s when thinktanks started using this “dynamic scoring” model, courtesy of the Heritage Foundation.  Those particular tax cuts were supposed to generate 1.6 million new jobs by 2011.  They were supposed generate enough federal revenue to pay back the entire federal debt.  They were supposed to save Social Security and Medicare.  (You can read the 2001 Heritage Foundation report here.)

Instead, those tax cuts sent the federal deficit soaring – and that’s when Alan Greenspan suggested cutting Social Security to pay for them.  (Remember, most of those tax cuts benefitted rich taxpayers.  But Greenspan wanted to cut our benefits – benefits we have pay for, with each paycheck – to make those tax cuts permanent.)

Now, here comes Trump.  And he wants to give the rich the GREATEST TAX CUT EVER – an average $1.1 million tax cut.  Each.  (Nevermind that he’s going to raise taxes on single mothers and families with lots of children.)

And Wharton says those tax cuts are going to magically “create jobs.”  (Nevermind that tax cuts haven’t ever
“created jobs” in the past.  Wharton’s dynamic scoring model says things will be different, this time.)

Let’s get real.  The folks who have been getting tax cuts haven’t been spending their extra money creating jobs.  They’ve been spending their extra money playing the stock market.  Wall Street keeps hitting record highs, and all that money had to come from somewhere.

It’s really hard to track what individual billionaires spend on the stock market.  But corporations have been getting tax cuts, too – and their spending is easier to find.  I added it all up a few days ago… and in 2015, corporations spent $5.5 trillion on the stock market, buying shares of their own or other companies.

$5.5 trillion, in one year.  It’s hard to wrap your head around that number, so let’s think of it in some other ways…

  • It could have been used to create 70 million jobs, at the median wage
  • It’s more than 25% of the federal debt
  • It’s more than six times what Social Security paid out in benefits last year

And they spent it buying stock from other stockholders.

So… apparently, that’s what happens when we give corporations tax cuts.  They pass the extra money along to “investors.”  They don’t create jobs with it.

The reality is, corporations don’t create jobs out of the goodness of their heart… they create jobs when they need to.  When the workforce they have can’t keep up with the demand for their business.

Notice that word: demand.  Capitalist economies only grow when there is increased demand.

And that means if government keeps taking money out of the pockets of consumers (single mothers, families with lots of children) and giving it to investors (GREATEST TAX CUT EVER), our economy is going to keep shrinking.

Nevermind what Wharton’s fancy-schmantsy dynamic scoring model might imagine.


BTW, it just so happens that Trump is a Wharton alumnus.  But I didn’t see that fact included in any of the press coverage of Wharton’s economic prediction.

Presidential Race: Different Tax Policies Would Have HUGE Effects On Working People

Underneath all the headlines about emails and wandering hands, there are some very important policy differences between the two presidential candidates.  Let’s start with tax policies.

Donald trump 5 (Gage skidmore Flikr)Donald Trump:

  • His plan would give highest-income taxpayers – those with incomes of more than $3.7 million – an average tax cut of $1.1 million.
  • About 8 million large families and single parents would see their taxes increase under his proposals.
  • His tax plan would add about $7.2 trillion to the national debt over the next decade.
  • His plan would cut taxes for hedge fund operators and other money managers by more than a third — allowing them to use a special 15% “pass-through” tax rate.

hillary clinton (WisPolitics.com FLIKR)Hillary Clinton:

  • Her plan would reduce taxes for low- and moderate-income households by an average of $100.
  • High-income taxpayers would see an average tax hike of $118,000.
  • Her tax plan would increase federal revenue by $1.4 trillion over the next decade (which could be used to lower the federal debt, or to offset spending).

Donald Trump is old enough to remember what happens when the rich get tax cuts:

  • Ronald Reagan’s 1981 tax cut: “Despite the tax cuts, business investment remained weak… The ballooning budget deficit forced Mr. Reagan to give ground” and taxes were raised again in 1986. And the deficit kept growing, until George H.W. Bush broke his “no new taxes” pledge in 1990.
  • George W. Bush’s 2001 tax cut package was supposed to create enough new jobs to pay back the entire federal debt.  Instead, those tax cuts contributed to record-setting federal deficits.
  • Bush’s 2003 tax cut package didn’t fix the economy, either; and as the deficit kept rising, Federal Reserve Chairman Alan Greenspan suggested reducing Social Security to pay for the cuts.
  • By 2006, even the US Treasury was saying that tax cuts for the rich don’t do much of anything… other than cut taxes for the rich.

But here we are, just three weeks from the election, and the mainstream media is focused on leaked emails and wandering hands… and there’s almost no mention of the fact that Trump wants to give the highest-income taxpayers an average $1.1 million tax break

There’s almost no mention of the fact that his proposal would add $7.2 trillion to the national debt.

There’s almost no mention of the fact that these sorts of tax cuts never, ever generate the kind of job growth that they’re supposed to.  (Why?  Maybe because corporate decision-makers keep spending their extra money on Wall Street rather than hiring workers.  Just last year alone, corporations spent more than $5.5 trillion buying shares of stock in their own or other companies.  That same amount of money could have created more than 70 million median-wage jobs.)

Three weeks out from the election, and almost no-one in the mainstream media is looking at how Trump’s “greatest tax cut ever!” would actually affect our country.  So if you think your friends might be interested in this, please use social media to share it.

The Tax Policy Center analysis of the presidential candidates’ tax policies is available here.

Verizon Spends Billions To Buy AOL & Yahoo Then Cuts Thousands Of US Jobs

2015-07-25_Mass_Rally_Stand_Up_To_Verizon

Verizon’s Greedy Corporate Businesss Model Is Exactly
What Is Wrong With Our Economy

Continuing our “What’s wrong with the economy” series using Verizon as a case study…

You can read about Verizon’s decision to lay off 4,800 American workers in yesterday’s NH Labor News.  (You might have missed it in the mainstream press, under all the election headlines.)  The cuts include seven call centers as well as some retail stores.

How is Verizon going to serve its customers, once all those call centers are closed?  The company “is offshoring customer service calls to numerous call centers in the Philippines, where workers are paid just $1.78 an hour and forced to work overtime without compensation.”  (Wow.  Not exactly a living wage.)

Guess what else was in the news yesterday.  Verizon’s agreement to buy Yahoo for $4.83 billion.  So…right now, Verizon is laying off thousands of American workers while it’s spending billions to acquire another company.  Does that make any sense to you?

And I’m feeling déjà vu.

Remember that Verizon workers had to strike, earlier this year, after working without a contract for eight months while the company demanded employee concessions?  That was at the same time Verizon was buying AOL for $4.4 billion.  Does that make any sense?  Why would a company that can afford to buy another company need draconian cuts to employee pensions, health care, and benefits for workers injured on the job?

And when Verizon “buys” another company, what, exactly, does it purchase?  AOL and Yahoo sell ads on the internet, they don’t have much in the way of bricks-and-mortar assets.  So, Verizon is spending billions of dollars to… buy another company’s stock.  After spending $5 billion to buy back its own stock.

Doing the math here?  Looks to me like… between 2015 and 2016, Verizon will spend a total of $14 billion on shares of corporate stock.  At the same time it is closing US call centers, laying off American workers and demanding concessions from its unions.  Money coming out of workers’ pockets, going into the pockets of stockholders.

While you’re getting mad, remember how Congress has structured our tax system.  Investment income is taxed at about half the rate of wage income; and it’s completely exempt from Social Security and Medicare taxes.  So the next time you hear a politician talking about how those systems are “going bankrupt”… ask them what would happen if they taxed investment income the same way they tax our wages.  I’m guessing it would fully fund Social Security and Medicare, as well pay down a good chunk of our federal debt.  But back to Verizon.

This is what’s wrong with our economy: CEOs and directors would rather purchase stock than pay workers. And so workers’ pay has been stagnant since the 1970s… even as our productivity has kept rising.

Meanwhile, the stockmarket is in the stratosphere.  And Verizon’s stock price keeps rising.

VZ stock chart

And Verizon’s corporate officers are doing just fine. (Read the rest of our Verizon series, starting here.)

And the Federal Trade Commission has already signed off on Verizon’s offer to purchase Yahoo … so it looks like Yahoo stockholders will be getting all those billions of dollars, while Verizon’s American workers face unemployment and its Philippines employees work unpaid overtime.

Because the folks who make corporate decisions would rather buy stock than pay workers.


Things weren’t always this way.  Once upon a time, it was illegal for corporations to repurchase their own stock.  But in 1982, the SEC created a regulatory “safe harbor” — and since that time, stock buybacks have skyrocketed.  Last year, corporations spent more than $650 million buying back their own stock.  All of that is money that could have been used for job creation or wage increases or facility expansion.  Sadly, some of that money came from the pockets of workers who were laid off, had their wages cut, or were forced to accept benefit cuts. (Read more about what Verizon “bought” with their 2015 $5 billion buyback program here.)

Once upon a time, corporate mergers and acquisitions were more closely regulated; but once the regulations were loosened again, mergers have risen to an all-time high.  Last year, corporations spent $5 Trillion buying up other corporations.  Again, that’s money which is not being used for job creation, wage increases or new plants and equipment.  And, again, some of that money came from the pockets of employees declared “redundant” when their company was acquired.  (Read more about AOL layoffs when Verizon acquired the company here.  Read more about Yahoo layoffs expected when Verizon acquires that company here.)

Source: Third Way

Source: Third Way


Do the math yourself. It adds up to more than $5.5 Trillion that corporations spent — just last year — buying stock rather than creating jobs.

And some folks wonder why our economy is in such a mess.

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