A Few Reasons We’re Getting Screwed

It’s one thing to get screwed. It’s another thing to know why. From recent reading:

Instead of raising wages, hiring more workers or investing in research and new equipment, corporations are increasingly accumulating cash and buying their own stock. This raises the corporation’s stock price, enriching the people in charge (who receive much of their compensation in the form of stock and stock options) and shareholders (who tend to be the wealthiest among us), but does little to improve the lives of most Americans. Some statistics from The Atlantic‘s “Stock Buybacks Are Killing the American Economy”:

Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock.

Instead of doing something productive.

The Atlantic article is by Nick Hanauer, a very successful capitalist who acknowledges that inequality is a problem that needs to be addressed. A poorly-named article from Salon called “Let’s All Screw the 1 Percent” cites an article Hanauer wrote last year about overtime pay.

We all know that wages have stagnated for many workers or even declined when adjusted for inflation. In order to have the same buying power it had in 1968, the federal minimum wage would have to be raised from $7.25 to almost $11.00 (see this attempt at myth-busting from the Department of Labor). What isn’t as well-understood and what Hanauer pointed out is that millions of workers would and should be receiving overtime pay, even though they aren’t paid by the hour (declaring workers to be “exempt” and giving them a salary is, of course, a great way to force people to work long hours without extra compensation). From the Salon article by Paul Rosenberg:

…there’s a wage level below which everyone qualifies for mandatory time-and-a-half overtime, even if they’re on a salary, and that level has only been raised once since 1975, with the result that only 11 percent of salaried Americans are covered today, compared to over 65 percent of them in 1975. If you make less than $23,660 a year as a salaried worker, you qualify for mandatory overtime—if not, you’re out of luck.  … Just adjusting the wage level for inflation since 1975—an act of restoration, not revolution—would be as significant an income increase for millions of middle-class Americans as a $10.10 or even $15 minimum wage is for low-wage workers.  It would cover an additional 6.1 million salaried workers (by one account) up to $970 per week, about $50,440 annually—the vast majority of those it was originally designed to protect, but who have slowly lost their protections since the 1970s. Hanauer proposes a slightly greater increase, intended to cover roughly all the workforce that was covered in 1975. That would raise the threshold to $69,000 annually, and would cover an added 10.4 million workers.

What was also surprising to me is that the President can raise the $23,660 threshold without the approval of Congress. Last year, in fact, President Obama promised to do just that. This website for Human Resources specialists predicts that the threshold for overtime pay will be increased in 2016, but only to around $45,000 (they also predict that the rules for declaring an employee to be “exempt” will be tightened, making more workers eligible for overtime pay).

In a related article at the Alternet site, a postal worker explains why the people delivering your mail during the week or a package from Amazon on Sunday may not look as official as they used to (jeans and a sweatshirt seem to have replaced those blue uniforms in my neighborhood). Paul Barbot says that he is a City Carrier Assistant:

City Carrier Assistants are a brand new classification of employee within the postal ranks; we are the low-wage, non-career, complement workforce at the USPS. Before [a 2013] reclassification, we were called Transitional Employees and made a respectable $23.52 hourly rate, only several dollars per hour less than what the average career employee made. But with the USPS management’s financial woes … a low-wage workforce was needed to help entice big business into choosing the postal service to partner up with. City Carrier Assistants now perform the same work they did when they were called [“Transitional Employees”], but now they get to do that work for 31 percent less pay ($16.68 per hour)….Newly hired CCAs will make even less —starting at $15 per hour.

Barbot argues that this lower-wage workforce helped the Postal Service and Amazon reach a “Negotiated Service Agreement” regarding special treatment for Amazon packages. 

And finally, The Guardian reports (no surprise) that:

Poor Americans are less likely to vote and more likely to distrust government, study shows… Political engagement, it appears, is a privilege for those who aren’t struggling to make ends meet…

while the right-wing Koch brothers, who aren’t struggling at all (not even with their consciences), plan to spend almost $900 million in 2016 in support of reactionary candidates, almost twice what they spent in 2012.