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Don’t Be Fooled By Walmart’s Promotional Stunt About Increasing Wages

This week the nations largest employer made national news by announcing they would raise their minimum wage to $11 an hour and provide a $1,000 bonus to 1.5 million American employees. They say that this move to increase wages and provide employee bonuses is all thanks to the Republican Tax Plan that President Trump signed into law this month.

However a closer review of this new announcement shows that it is all a publicity stunt.  They are also using the publicity stunt to cover up the news that they are closing 60 Sam’s Club stores across the country.

Making Change at Walmart director Randy Parraz explains what is happening in his statement: 

“While pay raises are usually a good thing, this is nothing but another public relations stunt from Walmart to distract from the reality that they are laying off thousands of workers and the ones who remain will continue to receive low wages. The fact is that Walmart is not permanently investing the estimated $2 billion it will receive annually from Trump’s tax giveaway to its workers – it is keeping almost all of it. This announcement is attempt to repair a crumbling image, while ignoring thousands of its workers who struggle year after year to pay their bills or depend on government assistance.

Once you crack the veneer, you see that Walmart’s wage increases does not raise hourly wages for many of its workers. Hourly wages for those workers making above $11 dollars will essentially stay the same. Workers will get a one-time bonus or raise, but not both.

Instead of taking Walmart at its word, we would hope that the Members of Congress, civic and state leaders, and the media, ask Walmart for actual facts about what this means for workers. Empty words will not lift Walmart workers out of poverty, an actual living wage will.”

Looking deeper into Walmart’s own statement you can clearly see that this is nothing more that publicity stunt to continue the myth that tax cuts somehow help corporations fuel wage increases.

The Wage Increase

Walmart’s press release further explains how this pay increase will into effect.

An increase in Walmart’s starting wage rate to $11 an hour, effective in the Feb. 17, 2018, pay cycle. The change is in addition to wage increases already planned for many U.S. markets in the coming fiscal year. The increase applies to all hourly associates in the U.S., including stores, Sam’s Clubs, eCommerce, logistics and Home Office.

Facing backlash over low-wages and protests from OUR-Walmart, Walmart announced they would raise wages from $7.25 to $9 in 2015 and raise them again to $10 in Feb of 2016.  Logic would dictate that a pay raise to $11 was overdue at this point.  Not to mention that Target, one of Walmart’s biggest rivals, announced last September that they would be raising their wages to $11 in January of 2018 and would continue to push wages up to $15 by 2020.

The Bonuses

Praising the newly passed tax cuts, Walmart said they would be giving out $1,000 bonuses to their “associates.”  As Parraz already explained, those bonuses are along going to the people who will not be getting a wage increase.  The devil is in the details.

“A one-time bonus benefiting all eligible full and part-time hourly associates in the U.S. The amount of the bonus will be based on length of service, with associates with at least 20 years qualifying for $1,000.”

So to qualify for one of Walmart’s generous bonuses, you would have to be a full-time employee, making more than $11 already and have at least 20 years with the company.  Since less than 50% of Walmart’s employees are full-time, combined with the high turnover of the retail industry, it really makes you wonder how many of Walmart’s 1.5 million employees will even see that bonus.

The Cost

There is no denying that raising wages and giving away bonuses is going to hit Walmart’s bottom line. But when you put it into perspective, it will not hurt them as much as you might think.

“This increase in wages to associates will take effect in February and will be approximately $300 million incremental to what was already included in next fiscal year’s plan. The one-time bonus represents an additional payment to associates of approximately $400 million,” said Doug McMillon, Walmart president and CEO.

That is $900 million dollars in payouts. Yes, that is a lot of money.  It looks like a ton of money.  However when you take into account that Walmart did $482 billion dollars in revenue last year and collected $13.6 billion in profits. $900 million is less than 10% of their profits. The wage increase would only be about 3% of their profits.

Maybe we should also take into account that in October of 2017, Walmart used $20 billion of its own profits to “buy back” their own stocks to artificially increase their stock prices.

Joe Ciolli from Business Insider wrote:

“Walmart is sweetening the pot for shareholders before its annual meeting, using the oldest trick in the book.

The retailer on Tuesday morning announced that it had authorized up to $20 billion in stock buybacks over the next two years. That’s a massive amount of capital to be allocated for repurchases, which are frequently used by companies to boost shares during times devoid of other positive catalysts.”

According to our research, that $20 billion dollars would do a lot for Walmart workers.

Layoffs

On January 12, the day after Walmart announced they would be increasing wages, they announced that they would be closing 63 (or 10%) of their Sam’s Club stores across the country.

“We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations,” said John Furner, president and CEO of Sam’s Club.

So far this year, Sam’s Club has closed two stores in my area and kicked 250 people out of a job.  Given both of the stores had about 125 employees, it would be safe to assume that nearly 8,000 workers are going to lose their jobs with the closing of these 63 stores.

The Tax Cuts

Walmart is praising the new Republican Tax Cuts for their ability to raise wages. Of course they neglect to mention that they spent millions lobbying Congress to oppose a minimum wage increase and to lower their corporate taxes.

The corporation will shed an estimated $2.2 billion dollars from their annual tax bill next year thanks to Republicans.  That cuts their tax bill by nearly 40%.  I won’t even go into how much the Walton Family is worth and how this tax bill will greatly benefit them. I will say that the Walton Family saved an estimated $670 million just because their income comes from dividends paid out from their Walmart stock holdings which are taxed at a drastically reduced rate compared to “regular income.”

So you see, Walmart the corporation is going to pocket $1.8 billion dollars this year in tax savings even after they spend $300 million to raise wages in their promotional stunt.

Do not be fooled by Walmart’s newly found generosity. They were going to raise wages anyway but now they can use this tax cut as a promotional stunt at the same time.  The Walmart executives are going to use this Tax Scam to line their pockets and continue to pay their low wages. Everyday.


After this post was first published, Walmart announced that they would be laying off an additional 3,500 “Co-Managers” and replacing them with lower paid “assistant manager” position.  Those who are being laid off are encouraged to apply for the new position.

Talk about a slap in the face.

Read more from ThinkProgress


Update: Original publication had the incorrect profit numbers. 

 

CWA Fights Unnecessary Layoffs at AT&T

CWA is continuing to fight AT&T’s proposed layoff of more than a thousand workers, a betrayal of the company’s promise to create thousands of good, middle class jobs.

Since AT&T announced plans just before Christmas to lay off technicians and call center workers in nearly every geographic region, CWA has been working on several fronts to block this action.

A recent series of round-the-clock discussions with the company resulted in a delay of the effective date of the earliest layoffs to Jan. 9, but so far we haven’t been able to completely stop this surplus. We have been able to prevent a small number of layoffs.

So far, AT&T has put forward a proposal to cut thousands of work hours from employees’ schedules, while continuing to contract out work and send good jobs overseas. The contracting out of this work and AT&T’s offshoring of good jobs is the real issue. AT&T must stop hiring contractors to do the same work that employees are qualified and trained to do.

CWA members are frustrated, especially in light of AT&T’s statements and pledge to invest at least $1 billion and create at least 7,000 good middle class jobs, as CEO Randall Stephenson promised last year.  CWA will continue to fight back against these job cuts and to demand that contracted work be performed by AT&T employees.

CWA District 6 (covering the Southwestern states of Texas, Oklahoma, Arkansas, Missouri and Kansas) filed a federal lawsuit and National Labor Relations Board charges asserting that the company is violating the AT&T Southwest collective bargaining agreement by laying off workers while at the same time using contract employees to do work that CWA members are trained and qualified to perform.

Other districts where AT&T is proposing to lay off workers later this month and in February and March have filed executive grievances challenging the layoffs and the company’s use of contractors. CWA will pursue every possible avenue and take whatever action is necessary to stop these layoffs and keep good middle class jobs in our communities.

Trump’s Conflicting Statements About Business Taxes Leading To Offshoring And Raising The Minimum Wage

Donald Trump (Image by Gage Skidmore FLIKR CC)

Donald Trump (Image by Gage Skidmore FLIKR CC)

In typical Trump fashion, Donald Trump says one thing but really means another.

Over the weekend Donald Trump went on Meet The Press where he talked about his tax “proposal” and the minimum wage.  Trump’s tax proposal would of course save him millions in his taxes, even though he said wealthy “people like me” could handle paying more in taxes.

He also stated businesses are leaving the United States because we have the highest business tax burden.  Businesses are not leaving because of high taxes, they are leaving because their biggest expense, labor itself, can be purchased in other countries are drastically reduced prices.  Corporations move overseas to avoid paying minimum wage standards set by state and the federal governments.

Case in point: Carrier is closing their factory in Indianapolis, Indiana and moving to Mexico.  Workers and elected leaders revolted over the idea that Carrier would toss aside 1,400 workers in this “business decision.” Workers tried to negotiate with Carrier to keep their jobs.  Carrier’s response: “they could possibly stay if the workers agreed to cut their pay from about $23 an hour to $5.85 an hour.”

Yes, Carrier is willing to stay if workers are willing to work below the federal minimum wage and give up nearly $17 an hour in wages.  Even with our “high business tax rate” corporations can still make huge profits by hiring workers in other countries and then exporting their goods back to the United States.

This is a product of multiple bad trade agreements that exploit foreign workers and allow corporations to skirt U.S. laws and taxes.  A fair trade agreement would make it more appealing for corporations to manufacture and distribute their products from inside the U.S. giving the advantage to American workers. Sadly that is not the current case.

In the interview on Meet The Press we can see that Trump recently changed his view on the Minimum Wage.  Before he was opposed to raising it at all even implying that we should eliminate the minimum wage. Now he believes we should raise the Minimum Wage but that it should be done by the states, not the federal government.

This is the political equivalent of punting.  By saying the states should set the Minimum Wage, Trump is trying to absolve himself of any responsibility for raising the Minimum Wage.  The old “it’s a state’s rights issue” defense.

The fact is that states’ already have the ability to raise their own state Minimum Wage but have failed to take any action to raise the floor for millions of low-wage workers.  They would rather see hard working Americans living in poverty and relying on government assistance that take action to raise the Minimum Wage.

We need the next Congress and the next President to take strong swift action to raise the minimum wage because the state’s are completely unwilling to do what is right. You cannot be the leader of the nation if you are not willing to lead on issues like Minimum Wage.

Watch Donald Trump try to explain away his contradictions on taxes and the minimum wage.

Indiana Carrier Plant Workers Take Their Case Directly To UTC Shareholders

Members of the Indianapolis community rally behind USW Local 1999 on March 23, 2016.

Members of the Indianapolis community rally behind USW Local 1999 on March 23, 2016 after United Technologies announced they would be moving the plant to Mexico. Image by USW 1999

Steelworkers travel to shareholders meeting, deliver petition calling on Carrier’s parent company to reconsider moving production from Indianapolis to Mexico

United Technology shareholders came face-to-face with workers being destroyed by insatiable corporate greed.

On February 10th, United Technologies (UTC) announced its “business decision” to shutter the Carrier plant in Indianapolis and move production to Monterrey, Mexico.  The move would eliminate at least 1,400 jobs in Indianapolis. A video of the heartless announcement was posted on YouTube and has received more than 3.7 million views, drawing national attention to UTC offshoring plans.

On Monday, members of the United Steelworkers Local 1999 who work at the facility scheduled for closure traveled to the UTC shareholder meeting in Florida.  The USW members delivered a petition signed by 4,500 people, asking the company to reconsider moving their jobs to Mexico, and called on UTC to keep good, family-sustaining jobs in Indianapolis.

“Abandoning the Indianapolis plant will have a devastating effect on not only 1,400 workers, but also our families and our community,” said USW Local 1999 Unit President Donnie Knox. “UTC’s decision to move our jobs to Mexico and the video of a manager’s callous delivery of that devastating news to workers in Indianapolis have made Carrier and UTC into poster children for corporate greed.”

United Technologies’ greed is not unusual. It is exactly what many of the other American companies have done over the last thirty years.  Corporations sell out American workers, who labored to build the company from the ground up, only to watch their jobs shipped overseas so the stockholders can make a quick buck.

In October, United Technologies, Carrier’s parent company, used a stock buyback program to temporarily inflate the share price.  They announced plans to buy back $12 billion worth of the corporation’s own stock — boosting the price per share up by almost 5%.  UTC plans to spend another $3 billion later this year, to buyback even more shares. This is great news for the wealthy executives and Wall Street hedge fund managers who hold the majority of UTC stock (even though it’s one of the reasons for a recent downgrade in UTC’s bond rating).

What about the people who work for UTC?  Instead of reinvesting in the company, expanding current operations or increasing the wages of the hard working men and women who built the company, UTC decided to use all those billions to buy back their own stock.

Just imagine what that $12 billion could have meant for the 195,000 workers employed by UTC.

As if spending $12 billion to buy back their own stock was not bad enough, let us not forget that UTC also paid out dividends to stockholders.  In 2015, UTC paid a quarterly dividend of around $0.66 per share. This means that over the year UTC paid out $2.50 to all 843 million shareholders, totaling $2.1 billion dollars in dividend payouts.

That’s more than $14 billion total paid to stockholders in buybacks and dividends.  The amount of money would it take to keep these 1,400 workers in Indianapolis would be just a drop in the bucket, compared to what is being shelled out to stockholders.  The greedy executives do not seem to care about the workers, their families, or the city they will destroy when they close this factory.

Knox, and his fellow Steelworkers, delivered a petition with more than 4,500 signatures from Carrier employees and their supporters from Indianapolis and around the country, calling on the company to reconsider its heartless decision to abandon American workers.

Carrier’s decision to move these jobs to Mexico is what is wrong with too many American corporations. They no longer care about building a lasting company that employs as many Americans as they can, they only care about how they can boost their stock prices to further line their own pockets.

The members of Local 1999 are going to continue to fight until Carrier reverses their decision to send these jobs to Mexico.

On Friday, April 29, members of USW Local 1999 will take the fight to save their jobs to the streets with a march and rally at the Indiana State Capitol. The rally will be headlined by USW International Vice President Fred Redmond, U.S. Senator Joe Donnelly and AFL-CIO President Rich Trumka.


Here are three articles on United Technologies stock buyback program:

http://www.wsj.com/articles/united-technologies-unveils-12-billion-buyback-1445343580

http://www.reuters.com/article/us-utc-results-idUSKCN0SE1AR20151020

http://www.marketwatch.com/story/united-technologies-sets-6-billion-accelerated-buyback-2015-11-12


Related reading on stock buybacks from the NH Labor News:

Read the series about Verizon as a case study of what’s wrong with the economy, starting here.

Read “What Mitt Romney taught us about America’s Economy” here.

Read “McDonalds: Paying Billions (of Borrowed Money) to Stockholders” here.

Read more NHLN coverage of stock buybacks here.

Free Trade Strikes Again As 1,300 More Manufacturing Jobs Are Shipped Out

file photo from US Gov Image by Jason Frost.

file photo from US Gov
Image by Jason Frost.


The failures of so-called free trade agreements continue to plague American workers.

Last week, Carrier announced that they would be moving 1,400 jobs over the next two years to a new plant in Mexico.  This move will allow Carrier, and their parent company United Technologies, to continue to rake in billions in profits and reduce their labor costs at the same time. The average HVAC worker at Carrier in Mexico will make around $6.00 an hour.

On Monday, Philly.com reported that Cardone, an auto parts manufacturer, will be moving 1,300 jobs to their plant in Mexico.

“Cardone, the Philadelphia auto-parts rebuilder which calls itself the city’s largest remaining manufacturing company, will shift 1,336 workers from its brake caliper plants at 5501 Whitaker Ave. and 5670 Rising Sun Ave. to a plant in Matamoros, Mexico, just south of Cardone’s warehouses in Brownsville, Texas over the next two years.”

Back in 2011, the Cardone CEO Michael Cardone III said he was committed to Philly when rumors surfaced that the company would be shifting jobs to their Texas and Mexico plants.

“We’re committed to Philadelphia. We’re committed to staying here, and we’re committed to job retention.”

Kevin Feeley, a spokesman for the company, told Philly.com Monday, that the “company was moving the brake work to Mexico because the “entry level” manufacturing work is “particularly sensitive” to cheap foreign competition.”

Again we see exactly how these so-called free trade agreements are destroying American jobs.  Chinese manufacturers are bringing in products cheaper, because they pay workers slave wages and US manufacturers are moving moving overseas to preserve their profit margins.

“Since 1998, U.S. manufacturers have eliminated 3.4 million jobs as China’s trade surplus with the United States swelled to $201.6 billion from $57 billion. Industries such as clothing, office products, furniture and toys have already ceded much of their production to Asia,” reported Bob Fernandez, staff writer for the INQUIRER.

Now we are on the cusp of another so-called free trade agreement, the Trans-Pacific Partnership, that has been labeled NAFTA on steroids.

Though some have labeled the TPP as the “gold standard” many, including the AFL-CIO, say that the TPP fails to address the chronic labor abuses currently plaguing workers in these countries.

“Calling the TPP’s labor rights provisions a gold standard is a mirage,” said Celeste Drake, AFL-CIO Trade Policy Specialist. “We know from experience that the discretionary dispute settlement model does not work for vulnerable workers, and the highly touted ‘new’ labor provisions do not provide meaningful new protections for abused and exploited workers.”

So what is to be gained from theses corporate driven trade policies?

More income inequality as greedy corporations continue the race to the bottom, finding new ways to pay workers even less while still protecting their record profits.

We must work together with our elected leaders to stop the TPP and fix our trade policies that encourage corporations to shift their manufacturing overseas.

Watch The Young Turks Epic Take Down Of Carrier’s Decision To Lay Off 1,400 Workers

If you thought the greed of corporations could not get any worse, just look at what United Technologies ( Carrier air conditioning corporation)  just did to 1,400 workers at their Indianapolis plant.

Carrier just announced that they would be laying off 1,400 workers over the next year to move the plant to Mexico where workers make around $6 a day.

The manager who broke the news to the workers made it very clear that this was a “business decision.”

But was it really as tough a decision as the manager claims it was?

The Young Turks laid out the truth about how corporations have rigged the entire political system to make it even easier for corporations like United Technologies/ Carrier to toss American workers aside for low wage workers in another country.

Outside of the billions in profits that United Technologies brought in last year and the outrageous CEO pay there is one more thing that really caught my attention, their stock buyback program.   Yes they dumped millions of dollar into buying back their own stock to artificially boost their own stock prices, which is exactly how many of the corporations executives are compensated.

Watch this short 15 minute video from the Young Turks as they explain how corporations have rigged the system for those at the top.

Here are three articles on United Technologies stock buy back program:

http://www.wsj.com/articles/united-technologies-unveils-12-billion-buyback-1445343580

http://www.reuters.com/article/us-utc-results-idUSKCN0SE1AR20151020

http://www.marketwatch.com/story/united-technologies-sets-6-billion-accelerated-buyback-2015-11-12

Related reading on stock buybacks from the NH Labor News:

Read the series about Verizon as a case study of what’s wrong with the economy, starting here.

Read “What Mitt Romney taught us about America’s Economy” here.

Read “McDonalds: Paying Billions (of Borrowed Money) to Stockholders” here.

Read more NHLN coverage of stock buybacks here.

Big Banks: Paying Billions (of Borrowed Money) to Stockholders

NASDAQ Watch Photo by Kowloonese used under CreativeCommons license via Wikimedia Commons

Photo by Kowloonese; used by CreativeCommons license via Wikimedia Commons


The “new economy” in a nutshell:
full-time employees need government assistance because their wages are so low. Businesses are shrinking, not growing. And corporations are borrowing money to pay it out to stockholders… because, well, that’s what the system is designed to reward.

The more I look, the more I see it. The same pattern, almost everywhere. It’s not limited to just a few rogue companies. It’s not limited to just a few industries.

And it’s not getting any better.

Here’s the view, from the financial sector.

Remember that study showing that almost one-third of bank tellers receive food stamps, Medicaid or other public assistance? The authors calculated that taxpayers pick up the tab for almost $900 million in government aid – just to bank tellers – each year. That study didn’t break those costs out by particular employer, but…

— — — —

Bank Teller Counting Money for Customer --- Image by © Duncan Smith/Corbis via Flickr

© Duncan Smith/Corbis via Flickr. Used under CreativeCommons license.

According to Glassdoor, Bank of America tellers receive an average wage of $12 per hour – or, just about poverty-line wages for a hypothetical full-time employee supporting a family of four.

And the corporation just announced another set of layoffs, bringing the total to

  • about 14,300 jobs eliminated in the past year
  • about 69,000 jobs eliminated in the past five years.

But owners of the bank’s common stock are doing OK. So far this year, the corporation has distributed $3.1 billion to shareholders, through dividends and stock buybacks. And there will be even more money going to stockholders in December.

Can’t help noticing, though… Bank of America has issued a lot of bonds this year – more than $25 billion. Which means the corporation now has more than $270 billion in long-term debt that it has to pay off between now and 2047.

Yes, Bank of America is borrowing money at the same time it’s paying money out to stockholders.

(Which, yes, is sort of like running up your credit card to buy Christmas presents for people who already have everything.)

Wondering how stock prices are affected by the amount of money paid to shareholders?  Last year, Bank of America announced it would increase dividends and start buybacks – but then discovered an accounting mistake and had to withdraw those plans. And stock prices fell by 6.3%.

Want to know why corporate executives care so very much about short-term stock prices?  Look at the way Bank of America compensates its CEO. On the 13th of every month, Brian Moynihan receives the cash equivalent of 17,747 shares of common stock. In August, the per-share price was $17.62; for 17,747 shares, that works out to a payment of $312,702. In September, the per-share price was $16.04; that works out to $284,662. In October, the per-share price was only $15.52; that works out to $275,433. Don’t you think CEO Moynihan notices, when his monthly payment drops by ten or twenty thousand dollars?

But there’s good news for him: this month – after that latest set of layoffs was announced – the per-share price is back up above $17.  (Even though the Bank is $270 billion in debt and its credit ratings are, ahem, less-than-stellar… and it borrowed almost another $3 billion since CEO Moynihan’s October payment.)

— — — —

bankerAccording to Glassdoor, J.P. Morgan bank tellers also receive an average wage of $12 per hour… which is still, yes, about the poverty line for a hypothetical full-time employee trying to support a family of four.

And the corporation is, ahem, “cutting costs” by eliminating another 5,000 jobs. (Last year, they cut 7,900 jobs.)

But… stockholders are doing OK. The corporation just raised its dividend and is buying back $6.4 billion worth of its own stock. (That’s in addition to almost $18 billion in buybacks between 2010 and 2013.)

And CEO Jamie Dimon just got tagged as “the Best Big Bank CEO, Measured by Shareholder Returns.” Between buybacks and stock dividends, Dimon has “generated a total shareholder return of 119.5%” in the last decade.

Even though… can’t help noticing… J.P. Morgan had, at last report, $434.4 billion in long-term debt (which was an increase of $8.3 billion from the previous quarter). And it will be paying off debt through 2049.

I’m sure somebody at JP Morgan can explain why it makes sense to pay billions out to stockholders at the same time the corporation is borrowing billions. (And I’m sure somebody at the Federal Reserve Bank can explain why regulators approved this plan.)

And yes, folks high up the corporate ladder are doing OK, too. Their compensation includes mechanisms like restricted stock units and stock appreciation rights, which ensure they’re paying attention to share prices.  For instance, Managing Director Mary Erdoes just received stock appreciation rights equal to 200,000 shares of JP Morgan stock… on a day when the stock closed at $67.39 a share.   (Yep, some people get paid according to how high the stock price goes.)

Meanwhile… 5,000 JP Morgan employees will be looking for new jobs… and employees who still have their jobs get poverty wages and need government benefits to make ends meet.

— — — —

US states by poverty rate

States by 2013 poverty rate

And I’m betting that if I looked, most of the other Big Banks would show this same paying-low-wages-to-employees while cutting-rather-than-expanding-the-business while borrowing-against-future-revenues so they can pay-more-money-to-stockholders pattern.

It’s not just a few employers.

It’s not just a few industries.

Borrowing money in order to pay it to shareholders is the same basic thing Bain Capital was doing, back before journalists started writing about it, when Mitt Romney ran for President.

Only, this is on a bigger scale.

These are corporations that employ hundreds of thousands of people. And they’re borrowing against future revenue, in order to pay stockholders today.

While their executives rake in millions in compensation.

And their employees need government assistance just to get by.

— — — —

Read my last post, “McDonalds: Paying Billions (of Borrowed Money) to Stockholders” here.

Read my series about Verizon as a case study of what’s wrong with the economy, starting here.

 

Gorham Paper and Tissue Announce Layoffs

Gorham Paper and Tissue Logo

 

Yesterday news agencies throughout the state announced that Gorham Paper and Tissue would be ‘restructuring’ and are being forced to lay off workers.

NHPR reports:
Gorham Paper and Tissue, the town’s largest employer, is temporarily cutting back operations, a move that will lead to 20 to 50 employees losing their jobs.

The company says other employees will see week-long layoffs.”

The Union Leader reports:
“This is a temporary move to get us through the winter, until natural gas prices come back down to their seasonal norms in the spring,” said (GPT CEO Mike) Cummings.

The temporary layoffs are a result in a spike in natural gas prices. Cummings told state officials in an email obtained by the Concord Monitor, “We can’t run paper machines when production costs exceed prices for our products.” 

After the announcement was made, Governor Hassan released the following statement:

Gorham Paper and Tissue’s announcement is troubling news, and I have instructed state officials from the Department of Resources and Economic Development and New Hampshire Employment Security to provide every resource possible to assist and support any affected workers.

“DRED officials have been working directly with Gorham Paper and Tissue to identify ways to reduce and stabilize the company’s energy costs, and I remain hopeful that the situation can be improved. I encourage the company to strongly consider any options that could reduce the number of potential job losses.

“It remains clear that we must take steps to lower energy and natural gas prices throughout our region to help New Hampshire businesses and families, which is why I have joined with my fellow New England governors in a regional statement of commitment to increase cooperation on energy infrastructure issues, including accelerating the development of additional natural gas pipeline capacity. I will continue working closely with all of our partners to identify ways to build a stronger, more reliable energy future for New Hampshire.

This is very troubling news for the North Country.  After loosing the paper mill once, the towns of Berlin and Gorham were decimated by the significant loss of jobs.  The entire region is still trying to recover from the mill shutting down the first time, and many thought that when Gorham Paper and Tissue opened that it would lead to a small economic recovery.

I’m disappointed to hear that Gorham Paper and Tissue is facing layoffs and reduced hours for employees,” said Senator Jeanne Shaheen. “I will continue to work closely with state, local and company officials, and remain committed to doing all I can to support the mill and its employees.”

The only good news is that Gorham Paper is offering some employees an early retirement option to reduce the number of layoffs.   Cummings told the NH Union Leader that the exact number of layoff and retirements is still uncertain.

“It won’t be less than 20 layoffs, but it’s too early to know exactly how many right now,” said Cummings.

Hopefully Governor Hassan and the Department of Resources and Economic Development can quickly find a solution to this problem and hopefully avoid any further layoffs.

UPDATE 1-5-13

Mike Cryans Statement on Gorham Paper and Tissue News

HANOVER – Grafton County Commissioner and Executive Council candidate Mike Cryans released the following statement today after hearing the news about Gorham Paper and Tissue’s restructuring.

“Today’s news is disappointing and my heart goes out to the workers and families impacted.  It is a reminder of the work that remains to be done to strengthen northern New Hampshire’s economy and lower energy costs.  I was in Berlin yesterday meeting with the unemployment chief, Mayor Grenier and other local officials.  I know they, along with state officials, are taking important steps to provide support for the hardworking Granite Staters impacted by the restructuring.

“The executive council has prominent role to play in strengthening the economy, especially in the North Country.  As a councilor I will work closely with the business community, Governor Hassan, state officials and the congressional delegation to preserve and expand the opportunities for good jobs at good wages throughout the North Country.”

Congress Adds Insult To Injury! Pay Freeze Continues As Sequester Sets In

Smashed Piggy Bank RetirementLet me start by saying the last thing I want to see is a full government shutdown.  However once again Congress as a whole takes more from the piggy bank they call federal workers’ pay.

“Congress on Thursday agreed on a measure to keep the government running through the end of the fiscal year. The bill, which also extends the pay freeze on federal employees, now heads to President Obama.”  (GovExec.com)

What is becoming a normal situation for Congress, they are continuing to take more from the federal workers.  The first pay raise they would have seen in three years was killed by Congress.  This is on top of the fact that almost every government employee is facing a mandatory furlough of 11-22 days.

Furloughs are not vacation days as some people are saying.  These are days when workers are forced off from work and are not paid.  For those people who are being forced to take a 22 day furlough, that is a 12% reduction in pay, or in more simple terms, a loss of one month of pay (over the next six months).

This continuing resolution does absolutely nothing to stop the sequester cuts.

“I remain deeply dissatisfied that sequestration is not addressed and will slash the very priorities I believe all of us came here to fulfill,” said House Appropriations Committee Ranking Member Nita Lowey, D-N.Y. (GovExec.com)

As I said before, a full government shutdown is the worst possible thing for federal employees and the entire United States.  The fact that we almost shut down in 2011, cost us in our national credit rating.

The sequester cuts have already started to have an impact on business.  According to the Huffington Post and the AP, workers are being laid off already.

  • On Monday, 250 workers at the Hanford Nuclear Reservation in Washington state received pink slips, while another 2,500 others found out they’re facing furloughs. Approximately 9,000 people work at the nation’s most contaminated nuclear site, and the Associated Press reports that “cleanup is likely to be slowed” because of the budget cuts.
  • Continental Maritime, a contractor that repairs U.S. Navy ships, expects to lay off 185 employeeseffective April 12. Other contractors have issued conditional layoff notices — meaning that jobs are safe if Congress restores some funding to the Defense Department — to thousands of employees.
  • Four-hundred eighteen contract workers tied to the Tobyhanna Army Depot in Pennsylvania are losing their jobs due to sequestration. Two-hundred sixteen people will be dismissed on April 15 and 107 on April 30, the Morning Call of Allentown, Pa., reports. The paper noted that the Tobyhanna Army Depot is losing 35 percent — $309 million — of its government funding through the end of the fiscal year, and that more than 5,100 of the people who work there are being forced to take 22 furlough days.
  • At least eight municipal employees in Monterey County, Calif., are losing their jobs as a result of a decrease in the number of military contracts.
  • In early March, 23 people who work with the parks and recreation and maintenance departments in Tooele County, Utah, were laid off in order to grapple with the federal budget cuts. “I have four kids. This is my livelihood,” said Scott Chance, a 12-year employee. “It pays my health insurance. It gives me my house.”
  • Engineering Services Network is an engineering and technology company and one of the top Latino-owned companies in Virginia. President and CEO Raymond Lopez Jr. told NBC Latino that he has “lost about 20 employees through sequestration.”
  • The Red River Army Depot in Texarkana, Texas, announced in February that it was cutting 414 jobs — about 10 percent of its workforce. “I don’t know how we’re going to make it,” Raymond Wyrick, whose last day was scheduled to be March 9, told CNN Money.

Someone please tell me: how is preserving these sequester cuts in the continuing resolution going to help our economy?  How is cutting services, cutting personnel, and cutting families’ income helping our economy? Federal workers are already at the mercy of Congress. On top of sequestration, this continuing resolution that keeps the 0.5% raise off the table is just another slap in the face to federal workers.

Federal workers are not a piggy bank that Congress can turn to, every time it wants help balancing the federal budget.

There are other options.  Ending special corporate tax breaks would pay for the sequester cuts twice over.   Ending tax breaks on unearned income would pay for the sequester cutsplus everything the House GOP wants to cut from next year’s federal budget.

Hungry like a (baby) wolfRemember, too, that maintaining the sequester cuts means that 600,000 young children from low-income families are losing the free food they had been receiving through a U.S. government nutrition program.

Smack down federal employees (again) and take food away from hungry children.  Is this the best six-month budget that our Congress can come up with?   

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