Largest Ever Low-Wage Worker Protest Sweeps United States

Thursday, April 16, 2015

by Common Dreams

'I Know We Will Win'

Day of action calling for a $15 minimum wage and the right to organize reached far beyond US borders

by Sarah Lazare, staff writer

"Fast-food workers are joining together and standing up for what’s right, and with students, #BlackLivesMatter activists, adjunct professors, home care, Walmart, child care, and airport services workers standing with us, we are stronger than ever," said Terrence Wise, fast food worker in Kansas City, Missouri.

In what is being called the largest low-wage worker protest the United States has ever seen, tens of thousands of fast food, laundry, home care, child care, retail, and education employees walked off the job or staged rallies on Wednesday in more than 200 cities across the country.

They were joined by workers in 35 countries on six continents, from New Zealand to Brazil to Japan.
The mobilization was part of the movement for a $15 dollar minimum wage in the U.S., which has touched off a nation-wide conversation about poverty and inequality since fast food workers began a series of rolling strikes and workplace actions more than three years ago.

"Fast-food workers are joining together and standing up for what’s right, and with students, #BlackLivesMatter activists, adjunct professors, home care, Walmart, child care, and airport services workers standing with us, we are stronger than ever," said Terrence Wise, a father of three who works at McDonald's and Burger King restaurants in Kansas City, Missouri, in a press statement. "I know we will win."

Backed by the Service Employees International Union, Wednesday's rallies were timed to coincide with Tax Day in the U.S., in a bid to highlight the fact that low-wage workers are forced to rely on public assistance to get by.

Under the banner "We are worth more," protesters are calling for living wages, as well as the right to organize in their workplaces without intimidation and retaliation.

In the streets on Wednesday, protesters made connections between social and economic justice. From Charleston, South Carolina to Ferguson, Missouri, protesters memorialized the lives of unarmed people of color killed by police and brought the message of the growing Black Lives Matter movement.

"We joined the Fight for $15 because, for us, racial justice is economic justice. We believe that Black workers have paid undeserved debts to greedy corporations for far too long," said Charlene Carruthers, national director for the Black Youth Project 100.

A report released on Monday by the National Employment Law Project finds that women and people of color are dramatically overrepresented in the underpaid work-force, with over 50 percent of African-American workers, and nearly 60 percent of Latino workers, making less than $15.

Wednesday's protests called for worker justice far beyond U.S. borders.

"The fast-food industry is dominated by a handful of multi-billion-dollar global companies, so we need to have a strong, global movement of workers pushing for better wages, better treatment and better rights," said Massimo Frattini, international coordinator for the International Union of Food workers in a press statement.
Participants say that this movement is a matter of urgency, amid rising inequality and plummeting wages in the U.S. and world-wide.

As Andrew Olson, McDonald's worker in Los Angeles put it in an interview with The LA Times, "Just because I work in fast food does that mean I should have to just scrape by in life?"

Looking to the future, journalist Rana Foroohar argued in Time that the Fight for $15 is proving a powerful force. "Politicians are going to have to grapple with this in the election cycle," wrote Foroohar, "because as the latest round of wage protests makes clear, the issue isn't going away anytime soon."

Many Low-Wage Workers Will Get Left Out of Obamacare

(not to mention the unemployed who can't afford the mandate)

Saturday, 06 April 2013
By Richard Kirsch, Next New Deal | Op-Ed


Reformers should start building a coalition to push for expanding the bill and making it more affordable.

The whining from some fast food chains that they won’t be able to afford paying for their employee’s health coverage under Obamacare have gotten a lot of press. But what is more troubling is the recent news that some big chains are concluding that the costs won’t be nearly as high as they had projected. The reason: their employees won’t be able to afford the health insurance and will instead pay a fine and remain uninsured. This fight is just the first battle in the coming war over Obamacare that will center around those who get left out. Big flaws in the bill will mean that many low-wage workers will be forced to choose between paying huge chunks of their income on premiums or on a penalty that leaves them with no coverage at all. Reformers should take note and get ready for the coming struggle.

Last week, the Wall Street Journal reported that Wendy’s lowered its estimate of the cost of Obamacare for each of its restaurants by 80 percent, from $25,000 a store to $5,000. The hamburger chain figured that many of its full-time employees, who will be offered health insurance through the company, will turn down the coverage because, as the Journal reported, “they can get insurance through Medicaid or a family member, or because they prefer to pay the penalty for not having coverage.” That penalty starts at $95 a year, although it will go up to $695 by 2016.

Wendy’s isn’t alone. Several other fast food chains have come up with similar estimates. One example is Popeyes, which figures that since only 5 percent of its employees have signed up for the high deductible plan now offered at a price of only $2.50 a week, few workers will choose to pay an estimated $25 a week for the improved coverage it will offer under Obamacare. While the new coverage required under the law will be far superior to the plan Popeyes now offers, with a good list of benefits, it will still include a steep deductible, particularly for a low-wage worker.

The debate over fast food chains and their workers is revealing one of the biggest flaws in the Affordable Care Act. Many low-wage workers will be put in a very difficult position: pay a big chunk of their limited wages for health insurance that is costly to use, or pay a fine for the privilege of remaining uninsured. This is an example of how the debate around Obamacare is about to take a huge turn. Instead of partisan opponents fearmongering about the theoretical impact of the law, the new struggle will be around the actual experience of those Americans whom the law was written to protect: people who are uninsured because they can not afford coverage or are locked out of the system because they have a pre-existing health condition.

Come January 2014, millions of people will get affordable health coverage for the first time. These will mostly be working people who do not get insurance on the job now but will become newly eligible for Medicaid or income-based tax-credits to buy insurance in the new health insurance marketplaces (“exchanges”). This will also include those who will no longer be turned down because of a pre-existing condition. The expansion of Medicaid – in states that give that the green light – and the income-based subsidies will create a huge new constituency for Obamacare that will oppose any attempts to roll back the law.

But due to problems written into the Affordable Care Act, the news won’t all be good for many people who can’t get affordable coverage now. There are some for whom the coverage in the marketplaces will still be too costly because the subsidies are too stingy. For example, a single person who earns just $33,500 will be required to pay $258 a month in premiums, which is more than 9 percent of his or her gross income, for coverage. That’s a big chunk out of a moderate income and is more than twice as much as that person would pay under Massachusetts’s current, successful law. In fact, people who earn more than two times the federal poverty level would be required to pay premiums from 6.3 percent to 9.5 percent of their incomes. If those costs are out of their financial reach, the bleak alternative is to pay a fine for remaining uninsured. It’s true that the coverage will include good benefits, free preventive services, and a cap on out-of-pocket costs. But unless it is already paying high medical bills, it won’t help a working family pay a high premium. The millions who face this dilemma will not be happy to have to make the choice between premiums that will put a big squeeze on an already tight budget or paying a fine they can’t afford for no benefits at all.

Which brings us to the second big group of people who will face this dilemma: low-wage workers who work more than 30 hours a week for a business that has 50 or more full-time employees. These employers can require employees to pay up to 9.5 percent of their incomes as premiums. The premiums are likely to be less for individuals; Popeyes estimates $1,200 a year, which would be similar to what has been found workable in Massachusetts. However, unlike in Massachusetts, the minimum coverage will have very high out-of-pocket costs, so workers will face high premiums for coverage that they can’t afford to use (although preventive care will be free). Furthermore, employers could decide to put more of the costs on to their workers, forcing them to choose between the premium and fines.

The news is much worse for family coverage. The IRS ruled earlier this year that the 9.5 percent rule will apply to the cost of individual coverage, even if family coverage costs much more than this. Here is how the New York Times editorial board explained the impact, in an editorial titled, “A Cruel Blow to American Families”:

A Kaiser Family Foundation survey found that in 2012, employees’ annual share of insurance premiums averaged $951 for individual coverage and $4,316 for family coverage. Under the I.R.S. rule, such costs would be considered affordable for an employee with a household income of $35,000 a year — making the employee’s spouse and children ineligible for a public subsidy on a health exchange, even though that family would have to spend 12 percent of its income for the employer’s family plan.

The Times goes on to report that between 2 million and 3.9 million spouses and children could lose access to affordable coverage because of the ruling. Those are millions of people for whom the law will be an empty promise.

The major purpose of the Affordable Care Act was to make decent health coverage affordable to Americans, and the law’s success will depend on how well it does just that. Next year, many millions of now uninsured people will gain access, but there will be millions of others for whom the promise remains out of reach. In the toxic political atmosphere surrounding Obamacare, the people left out will take center stage.

Republicans will seize on this situation to argue that the law is not working and use these people’s frustrations to portray the law as an expensive failure. The task for the champions of the ACA will be to unite those who are benefiting under Obamacare with those who will only benefit if the law is made more affordable. And since making coverage more affordable will take the government and, ideally, employers paying for more of the premiums, enacting the fixes will require a big political lift, particularly in the current Congress. Meeting this challenge will require organizing the winners and the losers to push for strengthening the law together.

All of this will become an issue in the 2014 and 2016 elections. In this way, Obamacare will join Medicare, Social Security, and Medicaid as perennial issues of public debate, with competing visions of the role of government in assuring the security and well-being of our citizens. It’s a fight that never ends.

How Many Minimum Wage Hours Does It Take To Afford A Two-Bedroom Apartment In Your State?

Ever wonder how people manage to get by on minimum wage? Oftentimes, they don't...

ORIGINAL: By the National Low Income Housing Coalition.

Screwed Unemployed Workers and Rising Concentrated Poverty

Friday, February 24, 2012 by The Nation
Unemployment insurance and poverty

by Greg Kaufmann


Congresswoman Barbara Lee, co-chair of the Congressional Out of Poverty Caucus, voted against the recent extension of unemployment benefits because it shortened the maximum number of weeks a jobless worker could qualify.

“Instead of scaling back unemployment benefits we need to be adding weeks to help people get by when there continues to be four workers in line for each job,” said Lee.

She makes a hell of a point.

While most of the media has focused on the Democrats “pretty much getting what they wanted,” it has given short shrift to what this deal means for the long-term unemployed, currently at near-record levels, with 43 percent of unemployed people jobless for more than six months. Under the new deal they will receive fewer weeks of unemployment benefits than was available between the end of 2009 and last year, with the maximum reduced from 99 weeks to 73 weeks by September 2012.

So what are the consequences of the Democrats “win” for the long-term unemployed?

A new report from the US Government Accountability Office (GAO)—Unemployment Insurance: Economic Circumstances of Individuals Who Exhausted Benefits—gives some indication of what might lie ahead for these folks and others not even fortunate enough to qualify for unemployment benefits in the first place.The GAO notes that of the 15.4 million workers who lost jobs from 2007 to 2009, half received Unemployment Insurance (UI), half didn’t, and about 2 million exhausted benefits by early 2010.

That group of 2 million had an unemployment rate of 46 percent in January 2010, and a poverty rate of 18 percent compared to 13 percent among working-age adults. More than 40 percent of those who had exhausted their benefits had incomes below 200 percent of the federal poverty line (below about $35,000 for a family of three), which is the level where many economists believe people start really struggling to pay for the basics.

The good news is Mitt Romney’s strong safety net then kicks in, right? So we can anticipate that unemployed people are able to obtain a little cash welfare until that 4-to-1 (job seekers-for-every available job) ratio drops down?

Not so much.

Temporary Assistance to Needy Families (TANF), a cash welfare program designed to help families in distress, is a case in point. It doesn’t reach as many people as it used to—only twenty-seven for every 100 families in poverty, compared to 68 of every 100 prior to the 1996 welfare reform that both parties tout as a success. It’s also limited to people with children age 18 or younger, so over half of those who exhausted UI benefits didn’t qualify. Therefore it comes as little surprise that only 3 percent of households that exhausted UI benefits received TANF; 15 percent received food stamps, and18 percent were in families where someone received retirement, disability, or survivors benefits from Social Security programs.

What is also striking is who doesn’t qualify for unemployment benefits at all.

According to the report, 49 percent of the 15.4 million people who lost jobs between 2007 and 2009 received UI, and that’s only because the program expanded during the recession. From 2005 to 2007, only 36 percent of the 8.3 million people who lost jobs received benefits. Who’s being excluded?

Low-wage workers, primarily.

“Those in the bottom 30 percent in earnings were half as likely to receive UI benefits as displaced workers in the top 70 percent,” the report reads.

The GAO notes that it’s tougher for these workers to meet the minimum earnings requirement and “family crises can also cause some in marginal financial situations to quit a job (for example, to care for a sick child)” which can make them ineligible in some states due to quitting “voluntarily.”

“Nearly half of displaced workers didn’t receive unemployment benefits,” says Elizabeth Lower-Basch, senior policy analyst at the Center for Law and Social Policy. “Moreover, all the young adults transitioning into the labor market who haven’t been able to get their first jobs because of the recession aren’t counted as either displaced workers or UI recipients. So both the displaced workers who didn’t receive UI and the youth entering the workforce are likely to have even higher poverty rates than those who have exhausted their UI benefits.”

In 2010, the federal extension of unemployment benefits kept 3.2 million Americans from falling into poverty. In 2012, with this recent Congressional deal reducing the maximum number of weeks of benefits, will we see the same antipoverty effect? And what about the workers who receive no benefits at all?

Maybe it’s time to look at how the unemployment insurance system functions as a whole, and how it can reach more people.

Fair Pay for Home Care Workers
There are currently 1.8 million low-wage home care workers in an industry that earns $84 billion in annual revenues. According to the National Women’s Law Center (NWLC), more than 9 out of 10 of the workers are women, disproportionately women of color. They are currently excluded from basic federal minimum wage and overtime protections, despite the fact that their work is demanding, stressful, and so vital to millions of families. Many of these women are primary income earners for their families and the Bureau of Labor Statistics reports sub-poverty median earnings below $21,000 for full-time work ($22,314 is the poverty threshold for a family of four).

The Depart of Labor has proposed a rule change so that home care workers finally receive the minimum wage and overtime protections they deserve. The change would help women who are working to lift their families out of poverty and also reduce pay disparities between men and women. Higher wages would also reduce high turnover and therefore improve quality and constancy of care.

The DOL is accepting comments on the proposal from organizations and individuals and just extended the deadline to March 12.

“The home care industry is pushing back hard against the proposal,” says Joan Entmacher, vice president for family economic security at NWLC. “The number of comments received matters, so I would encourage anyone who supports this rule change to file a comment immediately.”

NWLC notes 16 states already require minimum wage and overtime pay for most home health workers, proving it can be done without adversely impacting jobs and care as the industry claims it would. Also, Addus HealthCare, one of the largest home care employers, pays overtime and travel time to all of its caregivers whether required by state law or not. The total national cost of the proposed rule change is estimated to be less than one-tenth of one percent of the industry’s $84 billion in annual revenues.

Don’t let industry dominate the DOL’s review. Make sure your voice is heard today.

A Devastating Kids Count
The Annie E. Casey Foundation’s Kids Count reports that nearly 8 million children in the US live in areas of “concentrated poverty,” defined as at least 30 percent of residents living below the federal poverty level—about $22,000 for a family of four.

That’s 11 percent of children in the country, and it’s 25 percent more than lived in concentrated poverty in 2000. What makes this even more alarming and is perhaps a testament to the proliferation of low-wage work and concentration of wealth—75 percent of these kids have at least one parent working in the labor force.

Laura Speer, associate director for policy reform and data at the foundation, said she finds the new data “particularly disturbing” because the long-term trends have taken such a turn for the worse. Between 1990 and 2000, concentrated poverty was reduced and things were moving in the right direction. But the decade between 2000 and 2010 tells a different story.

“Poverty is re-concentrating,” she told me. “There’s more segregation in terms of income in the US and this can have really bad impacts for kids.”

As the report notes, families living in areas of concentrated poverty are more likely to face food hardship, have trouble paying their housing costs, and lack health insurance than those living in more affluent areas. Children are “more likely to experience harmful levels of stress and severe behavioral and emotional problems than children overall.” Even children in middle- and upper-income families living in areas of concentrated poverty are 52 percent more likely to fall down the economic ladder as an adult.

“Part of what we want to reinforce is the concept that children don’t grow up in isolation,” said Speer. “They are affected by both their family’s resources and also very much impacted by the community in which they live. The community is critically important because it really does for many kids equate to the opportunities that they have access to.”

The states with the highest rates of children living in concentrated poverty are in the south and southwest, while Detroit (67 percent), Cleveland (57 percent), and Miami (49 percent) have the highest levels among the nation’s 50 largest cities.

Speer said that although the data is bleak, concentrated poverty “is not intractable.”

“There are things that can be done and a lot of innovative ideas out there that are being tried that make me hopeful,” she said.

The report points to new approaches helping people find jobs, education opportunities, and access services outside their neighborhoods, or move to neighborhoods with more opportunities.

Public/private partnerships are developing mixed-income neighborhoods in Atlanta, Baltimore, New Orleans, and San Francisco supported by federal programs like the Choice Neighborhoods Initiative. These efforts invest in early childhood and education programs for children, and workforce development and asset-building programs for parents and residents.

Since 2010, the federal Partnership for Sustainable Communities has supported coordination of employment, affordable housing and transportation in 103 metropolitan regions across the country, taking what Speer said is “a more long-term, realistic approach to the idea of development rather than just moving everything out to the suburbs.”

Finally, the report notes programs like the federal Moving to Opportunity demonstration project, and housing mobility programs for families with Section 8 vouchers, that show promise in helping low-income families move out of areas of concentrated poverty and access affordable housing in low-poverty neighborhoods.

But even if Speer is confident that we can take on concentrated poverty, she adds a word of caution.

“What’s scary to me is that we really don’t know what the impact of the recession is going to be on these communities in the long-term,” she said. “This is the initial glimpse at it. But it’s hard to even know what’s going to be the impact of the foreclosure crisis in the long-term on these communities.”

Quotes of the Week

“The thing that’s inconsistent with the American ideal is a lack of mobility. When you have a situation where there is inequality in which those at the bottom can’t rise, that’s a caste system.”
—Michael Gerson, Washington Post columnist, former speechwriter for President Bush

“Another issue is whether we can turn these low wage jobs that are now an enormous part of our economy into better jobs. There was a time when manufacturing jobs, and going into the mines, and steel mills were low-wage jobs. It was the union movement and the rights of workers to organize—enforced by the government—that raised those jobs to the point where people could move into the middle-class. There is no reason why many of the low-wage service jobs now can’t be turned into better jobs. But that would require a new militancy on the outside—politicians would have to be pushed, and the media would have to be pushed to cover it, to get that done.”
—Bob Herbert, former New York Times columnist, distinguished senior fellow at Demos

Further Reading

50 Years Later: Poverty and The Other America, Maurice Isserman.
The American Deficit: Where Do We Go From Here? Marian Wright Edelman.

Vital Statistics

US poverty (less than $22,300 for a family of four): 46.2 million, 15.1 percent
Kids in poverty: 16.4 million, 22 percent of all kids
Poverty rate for people in single mother families: 42 percent
Increase in number of Americans in poverty, 2006-2010: 27 percent
Increase in US population, 2006-2010: 3.3 percent.

***

The reason Obama's first term as president is a failure is because those who were suffering when Obama took office are suffering now worse than they were then. And now there are more of them. Obama was elected because he convinced the voters that he cared and that things would change. Things did change--they got much worse.--jef

Apple Driving Workers to Threaten Mass Suicide?

The Pathologies of the Modern Corporation
By Robert Cruickshank, AlterNet
January 26, 2012

Here in my household, we are swimming in Apple products. We have four iPhones, although only three of them are currently in use. We have an iPod and an iPad. We have a MacBook and a MacBook Air (on which this post is currently being composed). We have two iBooks in storage, along with my iMac, which dates to the summer of 2000. It still boots up and works just fine.

I’m not an Apple fanboy. I just prefer products that work well, rarely ever crash, and help me create value. Apple products meet those needs perfectly, whereas most PCs I’ve used simply don't.

If those were the only things I cared about in life, I wouldn’t give those products a second thought. But there’s more to life than a functional piece of consumer electronics. Those items should exist to help me do the things in life that I want to do, to help me live a better life. They’re tools, not ends.

Even that’s not sufficient. One of my main goals in life is to build a better world, to ease suffering, end oppression, and provide equality – all in order that others may have the freedom to pursue their own dreams. A well-designed product can certainly help that process along. But what if the way that product is made actually undermines those broader goals? Suddenly, there’s a problem.

In the last year or two, it’s become increasingly clear that the way Apple makes its products is deeply flawed. Working conditions at the factory which makes most of their products – Foxconn in Shenzhen, China – are so appalling that workers engaged in a rash of suicides in 2010 to ameliorate their own suffering. Earlier this year workers threatened mass suicide over pay and working conditions. And of course, there’s the fact that Apple makes these products overseas rather than in the United States, where unemployment remains at some of the highest levels we’ve seen since the Great Depression.

Here in the 21st century, it should be clear to us that better technology is not sufficient to build the kind of better lives and society that we want. If it were, we wouldn’t be in a position of mass unemployment, widespread suffering, and a democracy in decay. Social institutions, including workplaces and corporations, have to be full partners in building a democratic, empowered, and equal society.

Most corporations, however, don’t see themselves that way – including Apple. Today’s New York Times took a look at Apple, America And A Squeezed Middle Class, curious to see why Apple no longer manufactures its products in the US and what the impact is on our prosperity. They found that Apple builds in China in large part because they have a narrow focus on their products and their profits, and disdain wider concerns for the good of society. When an unnamed Apple executive was asked about their role in addressing America’s economic problems, their response was revealing:

They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job. 

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

That quote is perhaps the best encapsulation of the pathologies of the modern American corporation. In fact, Apple does have an obligation to solve America’s problems. Everyone who lives in this country has that obligation. And corporations have that obligation too. If they don’t want to help make things better, then they shouldn’t exist.

The notion that companies exist only to generate profit or build a specific few set of products is corrosive. Those profits and products serve the rest of society. And as a part of that society, companies and their executives exist to make that society a better place. If they are engaged in a set of practices that make society worse off, then those actions are indefensible and need to be changed.

For the last 30 years, American businesses have been devoted to a single-minded pursuit of maximizing short-term profits. Unsurprisingly, this has had profound ripple effects throughout the rest of society. The economy became focused on those profits, and so with it followed politics, culture, and our values as a civilization.

By now it should be clear to everybody that while this works well for the small elite that has hoarded all these profits – the so-called “1%” – it has utterly failed to provide a happy and fulfilled life for everyone else.

This is true not only of the American workers who have lost their jobs due to outsourcing, it’s true of the workers around the world who have those jobs now. Those workers aren’t villains – if anything they’re even worse off. Foxconn’s chairman not only compared his workforce to animals, he suggested he might learn good management techniques from a Taiwanese zoo.

The NYT article talks about one of the reasons Apple likes Foxconn is because the factory is willing to push its workers not just to the breaking point, but well beyond it, in service to Apple’s profits and product demands. The NYT article described Steve Jobs’ 2007 rant about the iPhone needing an unscratchable glass surface within six weeks, and how Foxconn went about fulfilling that need:

In mid-2007, after a month of experimentation, Apple’s engineers finally perfected a method for cutting strengthened glass so it could be used in the iPhone’s screen. The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That’s when managers woke thousands of workers, who crawled into their uniforms — white and black shirts for men, red for women — and quickly lined up to assemble, by hand, the phones. Within three months, Apple had sold one million iPhones. Since then, Foxconn has assembled over 200 million more.

Was that necessary? Certainly not. That might not sound as bad as other reported abuses, but the situation is likely much worse at Apple’s suppliers, with overwork and other forms of employment fraud being rampant. 

As William K. Black explains at Alternet, this is a good example of what may be a widespread tolerance for fraud in the global economy:

These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.

One only needs to look at the widespread fraud that underlay the housing bubble of the ’00s to see further evidence for these claims.

Apple likes to think of itself as a model corporation. But as we saw above, their attitude is the same as that of many other businesses – that only the product and the profits matter, with all other elements of human life and social good being unimportant. The NYT article implicitly endorses this view by framing Apple’s decisions as being driven by the marketplace:

It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

In fact, the article explains that Apple is the world’s most profitable company, so clearly there is room to give. I would personally pay $65 more per iPhone if I knew it was going to American workers. I’m an internationalist, and so I’m also willing to pay more if I knew it was going to create better pay and better working conditions for the Foxconn workers in Shenzhen.

The NYT suggests that it’s not just profit motive that drives Apple’s unwillingness to bring jobs back to the States, but the lack of a skilled workforce and existing factory capacity:

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans — it would require transforming the national and global economies. Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

The NYT treats this as a kind of historic accident, a consequence of the marketplace. But it is in fact the product of 30 years of deliberate American government policy to deskill our workforce and send their jobs overseas so that the top 1% of our society can enjoy greater profits.

Nowhere in the article is the notion of an “industrial policy” described. China spends vast sums of money to develop, promote and protect its manufacturing sector. The United States has not only done no such thing, at least not since 1980, but has instead spent its money and used its laws and policies to encourage the deindustrialization of this country. This is not a market failure but a deliberate outcome of specific political choices.

There is nothing stopping the United States from shifting our current industrial policy away from “doing everything we can to help the 1% get richer” and toward “doing everything we can to promote the development of a manufacturing sector that employs a lot of people, paying good wages with good working conditions.” Well, nothing except the political power of the 1% – and the hegemony of neoliberal ideology, which holds that “the market” should decide who wins and who loses in life, rather than all of us collectively deciding that there’s no reason anyone should ever have to “lose” at all.

The United States could and should spend money to provide job training to help create a workforce that can build the products that make a 21st century society go. We can and should spend money to help make it easier to build sustainable, environmentally responsible factories. We can and should pass laws to ensure those factories are run by a democratic workforce, ideally by a cooperative, rather than by a large corporation focused on profits rather than the social good.

If companies are complaining about costs, we can help solve that problem without letting them fall back on the extremely damaging “solution” of simply cutting their workers’ pay, benefits, or even their jobs. Universal health care, funded through taxation, would mean a company like Apple would not have to include that cost in deciding when and where to hire. The same holds true of universal defined-benefit pensions – an augmented version of Social Security – as well as better schools and a freight and passenger transportation infrastructure that was not dependent on expensive oil.

Those things would not necessarily have to benefit just large corporations. They could provide the basis for people to innovate for themselves, for cooperatives to start setting up shop in the US and begin to design and build things like smartphones.

Changes to the way our companies operate, including eliminating the laws requiring them to maximize shareholder value and instead focus on operating in a way that makes society better, are also key pieces of building a better 21st century prosperity.

If all we want out of life is an iPhone, then we can just continue on the present path. But for those of us who know we can and should aspire to much more fulfilling things, it’s time we started figuring out how to change the global economy, rather than let it continue undermining our values and our lives. 

Half of All Americans At or Below Poverty Level

Over 146 millions live in poverty in US

Thu Dec 15, 2011 

 

Nearly 1 in 2 Americans have now fallen into poverty or are scraping by on earnings that classify them as low income, a report by the US Census Bureau says.

Based on a new supplemental measure by the Census Bureau more than ninety seven million Americans are considered to have low-income, defined as between 100 and 199 percent of the poverty level.

Another 49.1 million Americans live below the poverty line, meaning 146.4 million Americans, or 48 percent are considered low-income or poor, Associated Press reported on Thursday.

The new measure of poverty takes into account medical, commuting and other living costs. The new method raised the number of people below 200 percent of the poverty level up from 104 million, or 1 in 3 Americans that was officially reported in September.

The new data shows that children were most likely to be poor or low-income - about 57 percent, followed by seniors over 65.

Meanwhile Hispanics topped the list at 73 percent, followed by blacks, Asians and non-Hispanic whites.

Among low-income families, about one-third was considered poor while the remainder - 6.9 million - earned income just above the poverty line.

The US recession began in 2007. More than a year after the recession officially ended in 2009, the US unemployment rate remains above 9 percent, and the poverty rate rose to 15.3 percent in 2010 from 14.3 percent in 2009.

The “incredibly unequal top-down distribution of wealth” in the US has formed an elite group who controls most aspects of the country's affluence, according to analysts.

The Occupy Wall Street (OWS) movement emerged on September 17 in the financial district of New York City to protest at a number of issues including the wars in the Middle East, US financial crisis, rising poverty, soaring unemployment, and high bonuses for Wall Street executives.

Next Low-Wage Haven: USA

Saturday, August 6, 2011 by Labor Notes
by Jane Slaughter

Jokes about the U.S. becoming “Europe’s Mexico” are commonplace, but now high-priced consultants are pushing the notion in all seriousness.

They’re predicting that within five years certain Southern U.S. states will be among the cheapest manufacturing locations in the developed world—and competitive with China.

For years advisers like the Boston Consulting Group got paid big bucks to tell their clients to produce in China. Now, they say, rising wages there, fueled by worker unrest, and low wages in Mississippi, Alabama, and South Carolina mean that soon it won’t be worth the hassle of locating overseas.

Wages for China’s factory workers certainly aren’t going to rise to U.S. levels soon. BCG estimates they will be 17 percent of the projected U.S. manufacturing average—$26 an hour for wages and benefits—by 2015.

But because American workers have higher productivity, and since rising fuel prices are making it even more expensive to ship goods half way around the world, costs in the two countries are converging fast.

Dan Luria, research director of the Michigan Manufacturing Technology Center, says many of the big-name consultancies, which until a year ago were advising their clients to “Asiafy their footprints,” are now telling companies to think twice.

BCG bluntly praises Mississippi’s “flexible unions/workers, minimal wage growth, and high worker productivity,” estimating that in four years, workers in China’s fast-growing Yangtze River Delta will cost only 31 percent less than Mississippi workers.

That’s before you figure in shipping, duties, and possible quality issues. Add it all up, says BCG, and “China will no longer be the default low-cost manufacturing location.”

ALREADY COMPETITIVE

Actually, employers deciding where to produce the next generation of widgets may not need to look to the South. Plenty of factory jobs in Northern states—even in the former high-wage stronghold of auto—are already “competitive.”

Ford’s flagship Dearborn Truck plant outside Detroit, for example, contracts non-union workers to do inspection and repairs—long the coveted jobs, that workers could get only with many years’ seniority—at $10 an hour with no benefits.

That’s more than the Chinese average now, but less than what’s projected for 2015.

Brad Duncan, who worked at the plant last year, said it seemed like dozens of small companies were involved. Many pay people as “independent contractors,” he said, and are essentially fly-by-night operations.

“I worked for 10 bucks an hour with no overtime for around 66 hours a week,” Duncan said. “Then I’d get laid off for a week or more at a time with no notice.”

At a GM plant in Lake Orion, Michigan, north of Detroit, contractors hire young third-tier workers at $10 an hour or less to gather parts for assemblers, work done very recently by GM employees.

These kids are union members, though they don’t have a contract yet. The United Auto Workers convinced the contractors to let them organize the workforce through card check.

“There are more people there handling parts than building cars,” said Dan Theisen, a plant electrician.

Many of the union assemblers are themselves second-tier workers paid less than the U.S. manufacturing average, with wages of $14.60 and no pensions.

“It makes it hard to do anything for the second tier when the third tier is so bad,” said Theisen, a dissident who’s spoken against lowering GM wages.

ALREADY A TREND?

Among the U.S. companies rethinking their production locations are Ford, Caterpillar, an ATM company building a plant in Georgia, and Wham-O Inc., which returned Frisbee production to California and Michigan.

Master Lock is bringing work back to Milwaukee from China. GE, enticed by federal stimulus money, will be making green refrigerators in Indiana with Electrical Workers (IBEW) members instead of in Mexico.

And Suarez Manufacturing Industries has been lauded for relocating production of a space heater from China to North Canton, Ohio.

After experiencing lengthy transit times from Asia, CEO and North Canton native Ben Suarez painstakingly put together a chain of suppliers from within the U.S. In a former IBEW Hoover vacuum factory, abandoned in 2007 in favor of Mexico, he’s now contracted with two companies to supply the plant with labor.

Wages will run from $7.50 an hour (general labor) to $10 (assemblers) to $16 (programmers). Federal minimum wage is $7.25.

The plant will soon employ 100-150 workers in full-time jobs. As production ramps up, others will be guaranteed seasonal work, October through March. The plant received 3,000 applications, according to the company’s Lauren Capo.

NOT YET

The Steelworkers union has long agitated for a manufacturing renaissance in the United States, arguing that an economy that doesn’t make things is weak and unsustainable. In 2007 the union initiated the Alliance for American Manufacturing, a partnership with employers.

AAM Executive Director Scott Paul says there’s no hard evidence yet that manufacturers are actually returning from China in enough numbers to constitute a trend.

Rather, various consultants are now telling their clients to consider the U.S. They’re the same consulting class that “popped up around the time of NAFTA with ‘yes you can in Yucatan,’” he said.

Paul cites the factors that could converge to bring more work to these shores:

• Costs of labor and commodities are rising on the Chinese coasts, as workers demand higher pay. If companies move further inland to poorer areas, they hike their logistics costs.

• In most of the world, the dollar is worth 25 percent less than three years ago, and in China 5 percent less.

• Shipping costs are increasing because of rising energy costs.

• Companies fear that in China they’ll lose their intellectual property to spin-off competitors.

• Some consumers prefer an American-made product.

• The U.S. has an abundance of skilled but unemployed workers.

• And U.S. wages are stagnant or even falling.

But, Paul notes, if companies choose to build in the lowest-cost states—as Japanese automakers have done for nearly 30 years—“it quickly becomes a state vs. state competition, a race to the bottom. If South Carolina can offer lower wages, so can Mexico.”

WHAT KIND OF JOBS?

Will factory jobs flood into Michigan and Mississippi at just above minimum wage? Or is that still not cheap enough? The fact remains that the decisions are all made by corporations seeking the greatest profit in a dog-eat-dog world.

As Michael Zinser, one of the co-authors of the BCG report, told Labor Notes, “Location is agnostic. It’s a question of what the market will bear.”

Luria predicts that some manufacturers will indeed leave China, but sees the moves mainly benefiting Mexico and Eastern Europe.

Paul, from the manufacturing alliance, wants to see the government step in and influence those location decisions through government policy, as it did with the domestic content requirements in the 2009 Recovery Act and the high-speed rail bill. The German multinational Siemens located a train factory in Sacramento, California, as a result, he said.

Likewise, clean energy loans, grants, and tax credits led to 18 new advanced battery factories in Michigan (though not at high wages). “None of this would be possible without public investment,” Paul said.

HANDS-OFF

Mostly, of course, the Obama administration has taken a hands-off approach to what business should do, instead providing cash on request in the bank and auto bailouts.

UAW dissidents said the auto bailout was a giant missed opportunity to steer their industry toward clean products built in the U.S. at decent wages. Unions and consumer groups protested because the banks were saved but stiff regulations were not attached to their checks.

Paul notes that government policies to promote industry are the norm elsewhere, in old capitalist countries as well as in new ones like China. He fears the absence of such government help leaves U.S. workers with only one bargaining chip—and that’s not a happy one.

“Low wages won’t be the factor that compels companies to locate in the U.S.,” he said.

“But absent a national economic development strategy where there is a focus on manufacturing, that’s what we’re left with.”

Shipping Our Economy, Our Jobs And Our Prosperity To China

By Michael Snyder | June 7, 2010


As the U.S. economy continues to implode, large American corporations are investing billions upon billions of dollars in China.  But all of this investment comes at a price.  Over the past several decades, hundreds of factories and manufacturing facilities that would have been constructed in the United States, along with millions of decent paying jobs, have ended up going to China instead where labor is so much cheaper.  In the process, China has become a massive economic powerhouse, while once thriving manufacturing cities in the United States such as Detroit are now rusted-out corpses.  In fact, China’s economy has grown so rapidly that it is being projected that in 2010 China will replace Japan as the world’s second-largest economy.  Not only that, but China has already overtaken Germany and is now the biggest exporter of goods in the entire world.  But none of this growth in communist China would have been possible without all of the globalism and free trade that U.S. politicians from both parties have been pushing on us for the last 40 years.  When they were selling us on the benefits of “free trade” they didn’t tell us that we would end up shipping our economy, our jobs and our prosperity over to China. 

American consumers never seemed to be able to put two and two together.  As we were busy running out and filling up our shopping carts with cheap plastic crap made in China, we didn’t seem to realize that a “global economy” meant that we would be competing for jobs and wages with workers on the other side of the world.

So now the U.S. economy, with its high wages and repressive government regulations, is suffering while China’s economy is thriving.

So just how much money are U.S. corporations pouring into China?

Well, according to the U.S.-China Business Council, U.S. corporations combined for $3.6 billion in direct foreign investment in China in 2009.  That was substantially up from $2.9 billion in 2008.

As U.S. companies pour increasingly large amounts of money into China, the economies of the U.S. and China are becoming inextricably linked.

In fact, some of the biggest “American” success stories are now manufactured in China.

For example, have you purchased an Apple iPhone?  Well, if you have, there is a really good chance that it was made in China.  Of course what Apple doesn’t tell you is that ten workers at the facility in China where the iPhone is manufactured have committed suicide in the past year by jumping off buildings at the factory.  Perhaps they were depressed over their low pay – the workers at the factory work very long hours but make less than 300 hundred dollars a month.

How would you like to work for 300 dollars a month?

But things could be even worse.

Reuters recently described the ordeal of one Chinese worker who spends at least eight hours a day standing on an assembly line putting together locks for Honda cars….
“Each year is the same. It makes me sick in the stomach. There’s no freshness to things anymore,” he said of his job which pays around 30 yuan (US$5) per day.

How in the world can American workers be expected to compete with someone who makes 5 dollars a day?

But some Chinese workers toil in even more difficult conditions.  According to the Toronto Star, employees at the Pingdingshan Cotton Textile Company work grueling two day shifts and yet only make 65 cents an hour.


These low wages have enabled big global corporations to make huge profits, and they have helped provide lots of low price products for American consumers, but in the process they are cannibalizing U.S. jobs, factories and businesses.

In fact, it is getting quite hard to find things that are made in the United States anymore.  Even many of the “organic foods” that you are buying at organic food storesare now actually made in China.

As tens of millions of American workers sit at home collecting unemployment checks, U.S. companies are busy making plans to invest billions more in China.

According to Pacific Epoch, a China-focused research firm based in Shanghai, Pepsi “has committed $1 billion over the next four years to build 14 new beverage production plants, in a move that will almost double its production capacity in the country.”

Couldn’t we use a few of those beverage production plants in the United States?

But who wants to pay U.S. workers 12 dollars an hour when they can pay Chinese workers 2 dollars an hour?

But Pepsi is far from alone.  Forbes recently detailed the massive investments that some of the major car companies are making in China….

General Motors and Volkswagen have invested billions in China, starting more than a decade ago. Ford is rushing to catch up by adding production capacity and expanding its dealer network in China. Ford and its joint-venture partner, Chang’an Ford Mazda Automobile, plan to start producing next-generation Ford Focus models at a new, $490 million plant in Chongqing in 2012.

Meanwhile, once thriving American manufacturing cities such as Detroit and Flint, Michigan are so dilapidated and run down that they literally look like war zones.

But it is not just U.S. companies that are investing in China.  According to China’s Ministry of Commerce, overall direct foreign investment in China rose 14 percent to approximately $39 billion in the first five months of 2010.  Nearly half of that money was spent on building or expanding factories.

The implications of all this are staggering.

First of all, nobody can deny any longer that China has become a superpower.  China now has one of the largest economies in the world, their military has been dramatically upgraded and modernized and they have developed a network of economic and diplomatic contacts around the globe that would have been unthinkable 20 or 30 years ago.

Meanwhile, the United States has an economy that is imploding, a reputation that has been deeply tarnished and a debt that is the largest in the history of the world. 

In fact, China owns about a trillion dollars of U.S. government debt.

Yes, the United States is falling and China is rising.

So now that China’s economy and manufacturing base has been built up so dramatically, what happens when someday the communist Chinese government decides that it doesn’t want to be such great friends with the United States anymore?

If relations between the two nations really go south someday, could U.S. corporations suddenly lose the billions upon billions that they have poured into China? 

Also, many Chinese military strategists believe that it is inevitable that there will be a war between the United States and China someday.  So could China end up using all of the technology and manufacturing capacity that they have gained at our expense against us someday?    

The truth is that all of the money and technology that we have poured into China could end up being one of the greatest national security blunders of all time. 

China is not a democracy.  The Communist Party runs China, and most of their leaders still believe in the ultimate worldwide triumph of communism.

So in the end the United States may look back and realize how incredibly stupid it was to build up communist China at the expense of our own economy.

But this is the world our leaders have built for us.  A world where globalism and “free trade” force us to compete for jobs against sweatshop laborers around the globe.

The reality is that this “new world” is not very good at all for the American middle class.  The economic realities of the 21st century are very cruel for Americans who are seeking to live a middle class lifestyle. 
Gradually, everyone in the world is being pushed into two economic groups.  The massive global corporations that dominate everyone and everything, and the worldwide mass of expendable labor that serves those global corporations.

It is this kind of “neo-feudalism” that we must avoid at all costs.  If the American people would just wake up this trend towards increasing globalism could be reversed.