US income inequality

Subterms

    Latest story

    200 Shares159 Views

    CEOs of top 100 ‘low-wage’ US firms earn $601 for every $1 by worker, report finds

    by

    The CEOs of the top 100 companies paying the lowest wages made an average of $601 for every $1 earned by the average worker last year as executive compensation continued to climb to record highs.A new report from the Institute for Policy Studies singles out which 100 companies in the S&P 500 pay their workers the least, companies the report dubs the “low-wage 100”. These companies paid their employees – including workers outside the US and part-time workers – a median wage of $31,672 in 2022, while their CEOs took home an average $15.3m.Many of these companies also invest millions each year in stock buybacks – when a company buys shares of its own stock as a way to boost stock prices and give more money to shareholders. Of the “low-wage 100”, 90 companies conducted stock buybacks, spending a collective $341.2bn buying their own shares from January 2020 to May 2023.“This is really hard data that reinforces what is the major story in corporate America: instead of investing in their workforce or investment to be competitive, in the long term, they’ve been putting out huge sums to enrich their CEOs and their shareholders,” said Sarah Anderson, the report’s lead author. “These are sums that workers at these companies could not even wrap their minds around.”The report highlights companies that stood out within the group, including the highest-paid CEOs and the largest stock buybacks.LiveNation CEO Michael Rapino had the largest compensation of the group, raking in $139m in 2022. Meanwhile, the median pay for the company last year was $25,673. Though LiveNation has come under scrutiny for its domination of the US live music industry, its revenue has been soaring over the last year as more Americans attend concerts.Of the companies that had stock buybacks, Lowe’s spent the most, dedicating $34.9bn to its own shares over the last three years. Lowe’s CEO, Marvin Ellison, had a compensation of $17.5m in 2022, while the median worker pay was $29,584 for the year.CEOs of the “low-wage 100” who had been at their company from at least 2019 until 2022 saw their personal stock holdings increase 33% during those three years, growing an average of $184.7m. In comparison, median pay at the companies rose 10%.The Dollar Tree CEO, Michael Witynski, saw the biggest increase in his stock holdings, which went up 2,393% over the last three years to $30.5m as the company grew its retail footprint. The median pay for workers actually decreased in comparison, going down 4.4% to $14,702. The company spent about $2bn on stock buybacks over the last three years.Stock buybacks have become more commonplace over the last few years. Buybacks reached a record high in 2022 and are expected to reach $1tn for the first time in 2023. Proponents argue that they rightfully give a company’s profits to its shareholders and help create activity in the stock market, but the practice is attracting criticism in Washington.skip past newsletter promotionafter newsletter promotionThe bipartisan Inflation Reduction Act of 2022 included a 1% excise tax on stock buybacks, making them more expensive for companies to do. In his State of the Union address earlier this year, President Joe Biden proposed increasing the excise tax to 4%.The report argues there are more policies the federal government can take on to disincentivize stock buybacks. For example, by prioritizing companies that don’t engage in stock buybacks when picking contractors and companies that receive subsidies. According to the report, 51 out of the “low-wage 100” companies received federal contracts over the last three years worth $24.1bn and spent $160bn on stock buybacks. The report calculated that the average CEO compensation for these 51 companies was $12.7m in 2022. In comparison, a White House cabinet member makes $226,300 a year.“We’re not talking about putting an iron ceiling on how much a CEO can make, but we can use government policy to encourage companies to move in the right direction,” Anderson said. More

    More stories

    • 138 Shares179 Views

      in US Politics

      ‘It left me with nothing’: the debt trap of payday loans

      by

      Meka Armstrong of Detroit, Michigan, has struggled in a cycle of debt from payday loans for years. She first took out a payday loan in 2010 to cover the costs of medication she needs as she is disabled and lives with lupus.“Worst decision I ever made,” said Armstrong. “The interest rate was 49% and I thought I would get my medications and pay the money back, but when I paid the money back, it left me with nothing. That’s how they get you. I, unfortunately, started the payday nightmare, and you can’t get out of the loop.”Armstrong is just one of the 12 million Americans who take out payday loans annually in the states where payday lending is not prohibited, shelling out up to $9.8bn in fees to payday lenders every year. The industry targets Black borrowers such as Armstrong, and Latinos, who are more likely to have lower credit scores and be unbanked compared with their white counterparts.A payday loan is a short-term, high-cost loan typically due on an individual’s next payday. But the payday industry thrives and depends on borrowers who take out numerous loans and face exorbitant fees and interest rates when they can’t keep up. Payday lenders collect 75% of their fees from borrowers who take out 10 or more loans a year, according to the Consumer Financial Protection Bureau.The average payday loan customer has an annual income of about $30,000 and four in five payday loans are rolled over or renewed. The average payday borrower stays in debt for five months, paying $520 in fees to borrow $375 on average. The majority of borrowers, seven out of 10, take out payday loans to pay rent, utilities or other basic expenses.It took Armstrong years to get out of the debt cycle, which she said was difficult because the payday lenders have borrowers’ bank account information, can sue them and even threaten them with jail time for nonpayment.During the Covid pandemic, Armstrong had to take out another payday loan, even though she had previously experienced the debt trap and the consequences of doing so, because she caught Covid in 2020 and was sick.“It’s embarrassing because I know how predatory they are, but I had Covid-19 for 98 days, almost died, my whole house was sick and we were behind on bills,” she added. “I’m still in the payday nightmare because of that desperation unfortunately.”The US has a poor record when it comes to regulating payday lenders. Currently 20 states and Washington DC have enacted rate caps of 36% annually or less to rein in the cycle of debt that traps consumers who take on payday loans, aligning these states with the federal Military Lending Act passed during the George W Bush administration that capped annual interest rates on consumer loans for active duty military at 36%.In states without caps, the average annual interest rate for payday loans is about 400% and as high as 664%.“The debt trap is very much by design and it’s how payday lenders’ business model works,” said Yasmin Farahi, deputy director of state policy and senior policy counsel at the Center for Responsible Lending. “They succeed by making sure their customers fail. They target low-income communities and communities of color, and it’s a model that’s based on their customers failing, essentially, for them to stay in business and generate fees.”In Minnesota, the state legislature recently passed a law to cap interest rates on payday loans to 36% annually, from average annual interest rates in the state of 220% in 2022.Opponents to the legislation claimed the cap would deter lenders from doing business in Minnesota, though advocates have countered that this has not been the case in states where similar legislation has already been enacted.“It’s meant to be a continuous cycle,” said a payday loan recipient in Minnesota who requested anonymity. “You end up having an emergency, and then you think that, OK, I can pay this off, it’ll be a one-time thing and that’ll be that, but then your next paycheck comes, and it comes out of your bank account automatically and then you’re essentially just back where you started. So then you have to take the same loan out, basically the same day that you pay it off. And it just keeps going and going and going every payday.”Anne Leland Clark, the executive director of Exodus Lending in Minnesota, supported the cap. The legislation was split across partisan lines with Democrats introducing and supporting the bill though polling across political lines showed 79% of Minnesotans supporting a 36% or lower interest rate cap.Prior to Democrats in Minnesota winning a trifecta majority in the state government in November 2022, efforts were made at the local level to enact interest rate caps.“No longer will people be turning and getting into debt traps, or balloon payments, where their ability to repay is not accounted for,” said Clark.She noted a provision was added to the legislation that would permit lenders to charge 50% annual interest rates as long as they report doing so, but Clark noted her organization will be monitoring to see how lenders utilize the provision.“When you crowd out the predators, people are going to turn to and find the more responsible lenders and the more responsible lenders are going to license in your state,” Clark added.Jason Ward, a bankruptcy lawyer in South Carolina, where payday lending is permitted and unregulated, said over half of his clients filing for bankruptcy have at least one payday loan.The average annual interest rate for a payday loan in South Carolina is 385 %.“The interest numbers are so high that I honestly don’t believe the payday loan companies even intend to get paid back,” said Ward.He said many of his clients take out the loans out of desperation to cover basic expenses and that desperation is taken advantage of by payday lenders who know many clients will accept loans with exorbitant terms because they are just focusing on trying to survive at the present.“When you weigh how desperate somebody can be with what’s being offered, you get the sense that it can be predatory,” Ward said. “I don’t think people understand the desperation of a lot of people’s situations.” More

    • 138 Shares199 Views

      in US Politics

      Student loan forgiveness: what you need to know about Biden’s plan

      by

      ExplainerStudent loan forgiveness: what you need to know about Biden’s planWho qualifies and how to apply for the forgiveness plan, and will the student loan payment freeze be extended? President Joe Biden said Wednesday that many Americans can have up to $10,000 in federal student loan debt forgiven. That amount increases to $20,000 if they qualified for Pell grants. Here’s what we know so far and what it means for people with outstanding student loans:Who qualifies for student loan forgiveness? You qualify to have up to $10,000 forgiven if your loan is held by the Department of Education and you make less than $125,000 individually or $250,000 for a family. If you received Pell grants, which are reserved for undergraduates with the most significant financial need, you can have up to $20,000 forgiven. If you are a current borrower and a dependent student, you will be eligible for relief based on your parents’ income, rather than your own.Will the student loan payment freeze be extended?The payment freeze will be extended one last time, until 31 December. The freeze started in 2020 as a way to help people struggling financially during the Covid-19 pandemic and it’s been extended several times since. It was set to expire on 31 August.Interest rates will remain at 0% until repayments start. Under an earlier extension announced in April, people who were behind on payments before the pandemic will automatically be put in good standing.How do I apply for student loan forgiveness?Details of that have not been announced, but keep an eye on the federal student aid website for more details in coming days.What’s a Pell grant and how do I know if I have one?Roughly 27 million borrowers who qualified for Pell grants will be eligible to receive up to $20,000 in forgiveness under the Biden plan.Pell grants are special government scholarships for lower-income Americans, who currently can receive up to $6,895 annually for roughly six years.Pell grants themselves don’t generally have to be paid back, but recipients typically take out additional student loans.“This additional relief for Pell borrowers is also an important piece of racial equity in cancellation,” said Kat Welbeck, Civil Rights Counsel for the Student Borrower Protection Center. “Because student debt exacerbates existing inequities, the racial wealth gap means that students of color, especially those that are Black and Latino, are more likely to come from low-wealth households, have student debt, and borrow in higher quantities.”To find out if you have a Pell grant, check any emails you’ve received that describe your FAFSA award.How many people will this help? About 43 million Americans have federal student debt, with an average balance of $37,667, according to federal data. A third of those owe less than $10,000. Half owe less than $20,000. The total amount of federal student debt is more than $1.6tn.What if I’ve already paid off my student loans – will I see relief? The debt forgiveness is expected to apply only to those currently holding student debt. But if you’ve voluntarily made payments since March 2020, when payments were paused, you can request a refund for those payments, according to the Federal Office of Student Aid. Contact your loan servicer to request a refund.Will student loan forgiveness definitely happen?The White House is expected to face lawsuits over the plan, because Congress has never given the president the explicit authority to cancel debt. We don’t know yet how that might impact the timetable for student loan forgiveness.What repayment plan is the Department of Education proposing? The Department of Education has proposed a repayment plan that would cap monthly payments at no more than 5% of a borrower’s discretionary income, down from 10% now. Borrowers will need to apply for the repayment plan if it’s approved, which could take a year or more.For example, under the proposal, a single borrower making $38,000 a year would pay $31 a month, according a government press release.The amount considered non-discretionary will also be increased, through the department has not said how much.Discretionary income usually refers to what you have left after covering necessities like food and rent, but for student loan repayment purposes it’s calculated using a formula that takes into account the difference between a borrower’s annual income and the federal poverty line, along with family size and geographic location.What if I can’t afford to pay even with loan forgiveness? Once payments resume, borrowers who can’t pay risk delinquency and eventually default. That can hurt your credit rating and mean you’re not eligible for additional aid.If you’re struggling to pay, check if you qualify for an income-driven repayment plan. You can find out more here.The plan Biden announced on Wednesday also includes a proposal that would allow people with undergraduate loans to cap repayment at 5% of their monthly income. Proposals like this one can take a year or more to be implemented, and it’s not clear what the fine print will be.If you have worked for a government agency or a non-profit organization, you could also be eligible for the Public Service Loan Forgiveness Program, which you can read more about here.TopicsUS student debtUS personal financeUS student financeUS politicsUS income inequalityexplainersReuse this content More

    • 200 Shares169 Views

      in US Politics

      ‘What am I going to do?’: soaring prices fuel calls for US government to step in

      by

      ‘What am I going to do?’: soaring prices fuel calls for US government to step inLarge corporations are passing on higher-than-needed price increases to customers under the cover of inflation, war and supply chain squeezes, experts say Outside a Dollar Tree in Detroit, Latasha Holmes lamented the rising cost of toilet paper, beverages, food and other items she had just purchased. The price increases, she said, were forcing her to choose among necessities for her and four kids.“What am I going to do? Prices are up everywhere, all over town,” she said. “I can’t afford everything.”But while Holmes struggles, Dollar Tree thrives. The retailer increased its prices by 25% as profits jumped 269% between 2019 and 2021, and its profit margins widened. Shareholders won too. The company also announced a stock buyback program worth $1bn that will deliver cash from those price increases to its investors.Dollar Tree and other large corporations are juicing profits by passing on higher-than-needed price increases to customers like Holmes under the cover of inflation, war and supply chain squeezes, consumer advocates and economists say. They are calling for the federal government to take bold steps to rein in the companies.Revealed: top US corporations raising prices on Americans even as profits surgeRead moreAmong proposed prescriptions are price controls, improved price fixing rules, commodity market intervention, stock buyback regulation and antitrust enforcement. Ranged against those proposals are a powerful business lobby and a divided Congress that seems unable to pass major legislation.“There are reasons to have a profit incentive, but there are also reasons to have an overall regulatory body that can say, ‘This is actually profiteering … while everyone is hurting,’” said Krista Brown, a policy analyst with the American Economic Liberties Project.A Guardian analysis of 100 top corporations’ Securities Exchange Commission filings found a median increase of 49% in profits between the most recent quarter and the same quarter two years ago, pre-pandemic. It shows companies have largely shielded themselves from inflationary pain by passing most or all of their increased costs on to customers via price hikes.So far, the federal government’s most visible attempt to address inflation has been to increase interest rates, rates look set to rise again this week. But the Guardian’s data suggests such a measure may miss an important mark. Raising rates effectively takes money out of consumers’ pockets to cool the economy.If corporate profits are contributing in a meaningful way, then raising rates would only reduce the amount of money people have to spend on products and services for which prices are still going up.“That would mean you’re exacerbating this dynamic instead of doing anything to help it,” said Isabella Weber, University of Massachusetts Amherst economist.Instead, limited and targeted price controls could work for essentials like bread, she said, but stressed those would have to be coupled with a bailout plan for negatively affected companies.“Increased prices for basic items like bread can exert enormous pressure on wages” and send inflationary ripples throughout the economy, Weber added. Though price controls are controversial and generally regarded as a leftist idea, the last president to enact them was Richard Nixon, who imposed a 90-day freeze on wages and prices to address inflation in 1970. Price controls were also enacted during and following the second world war, when, again, supply chain issues and pent up demand led to soaring prices.Table of 100 US companies’ profit growthBut price rises are not the only issue critics would like to see the Biden administration address. Others, like Groundwork Collective’s executive director, Lindsay Owens, have called for a ban or new restrictions on stock buyback programs. Joe Biden’s 2023 budget proposes prohibiting executives from selling their stock three to five years after enacting a buyback program.“The other big winner besides the shareholders in excess cash that’s going to buybacks are the executives,” Owens said. “They announce the buybacks, their stock prices soar, then they sell their shares and there are a number of ways to make this work better.”The Guardian’s analysis found companies’ buyback programs over the last 15 months totaled $544bn. That cash could have been reinvested to keep prices down, or increase workers’ wages, consumer advocates say.Others levelled accusations of price fixing and gouging. The American Economic Liberties Project is helping draft legislation that would make it easier for businesses to sue companies for price fixing by making private corporate communications more accessible. As of now, only 3% of price fixing cases make it to trial, Brown said.“Reinvigorating price fixing laws and going after price gouging in moments like this, where a war or Covid are used as excuses for companies to raise rates just because they can, could help a lot,” she added.Fixing is especially a problem in highly consolidated industries, consumer advocates say. Companies have benefited from “decades long under-enforcement of consolidation laws”, added Martin Schmalz, an Oxford University economist.Just four companies control most of the US beef industry, four airlines control about 80% of domestic passenger traffic, Walmart accounts for the majority of grocery sales in the majority of US states, the list goes on and on.And it’s not just the companies that have outsized control. Large investors also a role to play.Schmalz pointed to the Investment Company Act, which limits investment funds to holding no more than 10% of a corporation’s securities. Vanguard on average holds 10% of all S&P 500 companies, Schmalz research has found, but it is not violating the law because companies within its fund family own the shares, not Vanguard itself. But Vanguard still executes the voting rights of more than 10% of shareholders.“The law is written at the fund level so technically speaking they don’t violate the law, but they are violating the spirit of the law,” Schmalz said.Economists and attorneys working on US antitrust law have proposed prosecuting mutual funds like BlackRock or Vanguard that own large stakes in multiple companies in the same sector. Such shareholders can exert an outsize influence on companies’ pricing decisions, Schmalz said, and he noted Investment Company Act language that specifically targets this scenario: “The national public interest … is adversely affected … when investment companies [have] great size [and] excessive influence on the national economy.”Schmalz said there’s little discussion among policymakers to address that specific issue.Biden’s budget includes over $220m for antitrust enforcement, and bills that would break up large tech companies have bipartisan Senate and House support.The Guardian’s analysis highlighted the commodity market boom as companies trading in grain, steel, mining, wood, rubber, meat, oil, homes and other materials generally recorded higher profit increases than companies across the rest of the economy.However, many commodity companies operate in what analysts characterize as “feast and famine” cycles in which they’re unprofitable for years before cashing in. The pendulum has swung for many commodity companies in the day’s economic climate.“When there’s a chance to raise prices when markets are tight, companies are going to do so,” said Skanda Amarnath, executive director of the Employ America thinktank. “It’s some part opportunistic, some part greed, some part rationality, some part a response to uncertainty.”The oil industry highlights the dynamic. After seven years of low returns, it’s restricting supply to boost profits regardless of how that hits Americans at the pump. Earnings calls transcripts reveal executives eagerly “putting shareholders first” and an investor who described industry-wide supply suppression “one of the delights of this earnings season”.Bar chart of the monthly change in US wages since January 2019Bringing volatile commodity prices under control would require curtailing uncertainty and building supply chain resiliency, analysts who spoke with the Guardian say. That could involve some degree of government intervention to cut down on risk by establishing a floor on commodity prices. The government could do that by effectively becoming the “buyer of last resort” when material prices dip below a certain level.But the government should also set a ceiling above which it collects profits, said commodities analyst Alex Turnbull. He suggested the federal government set up what’s effectively a state reserve board.Turnbull pointed to lithium, which, amid increased demand for EV batteries and supply chain squeezes, jumped from $5,000 a ton to $45,000 a ton last year. Higher prices impact the pace of the clean energy transition, and the government could hypothetically set a $10,000 a ton floor price and $25,000 a ton ceiling that would limit the volatility, Turnbull said.The federal government could also increase stockpile reserves of products like grain or oil that are released when prices spike.“That sends the message ‘You should plant more wheat because if it goes really bad, you might have a lean year or two, but we will buy your wheat. But on the other hand don’t expect to buy a Lamborghini if you’re a farmer in Iowa because when prices get too high we’ll be out there selling the shit out of our stockpiles,’” Turnbull said.Stabilization may also spur investment in raw material production that’s risky, which would further bolster markets against future supply shortages. Few companies have built steel plants in recent years because the prices have been so low, Turnbull noted, and now the world is short on steel.Though price caps are “not politically palatable” Bespoke Investment analyst George Pearkes said, the government could take a number of measures to steer futures curves and markets for raw commodities like oil and wheat.“Something in between where there are strategic efforts to smooth volatility, and provide the private sector with enough certainty that they can make decisions is a lot more compelling,” he said.Spikes in investment for some commodities, like nickel, that are essential to the clean energy transition, can be a positive development, Turnbull said. Mining companies limped through the several years leading up to the pandemic, but reaped windfalls over the last year.“People say ‘Nickel producers are making too much money’, well, they didn’t make money for a decade,” Turnbull said. “At some point, somebody has to put money down to dig holes because people aren’t going to drive to the middle of fucking nowhere with a truck and work for free.”Another force in some commodity price spikes: Wall Street speculation. Commodity markets were once heavily regulated because they deal in raw materials that underpin the economy. An influx of investment capital followed the commodity markets’ deregulation about 20 years ago, and some are now treated like speculative assets similar to bitcoin, said Rupert Russell, who authored a book on the topic.The consequences of economy-addling commodity price spikes are real, he adds, pointing to the 2010 grain prices that helped trigger the Arab spring uprising in Tunisia.Supply chain back ups, inflation and war have generated “radical uncertainty” in which no one knows how much commodities are worth, because the prices are no longer anchored, Russell told the Guardian. He echoed others’ calls for stronger government intervention to tamp down the casino-like mentality.“Once there’s not just radical uncertainty but markets dominated by speculators, algorithmically driven speculation that is just kind of responding to headlines, then you’re going to get that kind of Bitcoin-esque volatility,” he said.But experts say there are few viable short-term solutions, and long-term measures don’t help Holmes. That’s forcing her to think about getting another job to survive as she feels the pressure of an economic system stacked against her.“I don’t want to. I’ve got four kids to take care of, but what am I supposed to do?” she asked.TopicsUS economyInflationEconomicsUS politicsUS income inequalityInequalityfeaturesReuse this content More

    • 175 Shares169 Views

      in US Politics

      Tax the rich: these one percenters want people like them to pay higher taxes

      by

      Tax the rich: these one percenters want people like them to pay higher taxesMembers of the Patriotic Millionaires say the income gap in the US has become a disaster – and it’s time to ‘take that money back’ The sound system played Pink Floyd’s Money as the Patriotic Millionaires assembled in the boutique Eaton hotel in Washington DC last week. After compulsory Covid tests there was a lot of well-heeled hugging and laughter among a crowd that looked like extras from Succession as they sat down at tables stacked with M&Ms stamped with “tax the rich”.This was the first time since the pandemic that the Patriotic Millionaires had assembled together in person. The group, founded in 2010, is made up of high net worth individuals who believe – counterintuitively these days – that the really rich should pay more taxes. And after a dozen often frustrating years some of them now believe change is coming.In the White House, Joe Biden has proposed new taxes on households worth more than $100m. The war in Ukraine has shown that the international community can, and will, crack down on oligarchs. Some of the workers who made fortunes for Amazon’s Jeff Bezos and Starbucks’s Howard Schultz have successfully formed unions despite the millions both companies spent fighting them off.“No one was talking about taxing the rich when we started,” said Morris Pearl, chair of the Patriotic Millionaires and a former managing director at BlackRock, the largest money manager in the world.Even the conversation seemed ridiculous under Donald Trump, Pearl added. “We have seen a huge change. You have a president talking about taxing the rich, people are talking about wealth taxes – those weren’t even fringe ideas 10 years ago. I’m not saying it’s going to happen and pass into law but there are conversations at the highest levels.”Part of the reason why those conversations are happening is that the situation has got so bad. Speaker after speaker at the one-day conference highlighted how the very, very rich have hijacked the political system around the world, run down wages and exacerbated income inequality, ramming home the title of the conference: Oligarchs vs All of Us: The Fight for Power & Money.Another member, Gary Stevenson, a British trader turned inequality economist, believes things are only going to get worse. Billionaires made fortunes from soaring stock markets, property prices and other assets during the pandemic. Government handouts have largely helped the rich, he argues. “If nothing is done this is going to be a massive disaster,” he said. “However bad you think things are, I guarantee they will get much, much worse.”When the pandemic struck there was talk of it being a great leveler – we were all in this together. In fact, Covid-19 exacerbated economic and racial inequalities. US billionaires received a $1.1tn windfall as their wealth soared to record levels. The billionaire class boomed in Asia and reached record levels in the UK. But as we emerge from the shadow of Covid-19, hoi poloi find themselves struggling with soaring inflation and rising cost of basics such as rent, utilities and food.For Stevenson this enormous explosion of wealth is “end of civilization stuff”. “There is one thing and one thing only that we can do,” he said. “We have got to take that money back.”But are rich – and overwhelmingly white – people the right people to push that message? Abigail Disney thinks so. Disney, the granddaughter of Roy Disney, co-founder of the Walt Disney Company, sees her family as a synechdoche for what has happened to the rest of America.The Disneys were already super-rich by the time Disney, 62, was born but their wealth grew enormously just as the gap between rich and poor has grown. “Money changed my family,” she said, and not for the better. Now, she says, those rich people live in another world and are unable to see what the consequences of rising inequality will be. Hearing that from one of their own breaks that barrier, she believes.“The only people billionaires will listen to are other billionaires and multimillionaires. You need at least the two commas. And if they won’t listen, there are their children and their wives, and they will listen,” she said.While her money opens the doors of power, Disney finds her message also discombobulates ordinary Americans. She is regularly assailed on Twitter for daring to suggest rich people should pay more taxes. The problem is that people have been convinced that “every single person in this country is a billionaire waiting to happen”, in an orchestrated campaign she believes was engineered to protect the wealth of the 1%.The last four decades have seen a massive redistribution of wealth. Only problem is it went to those who were already wealthy. https://t.co/anTolPYv5g— Abigail Disney (@abigaildisney) April 5, 2022
      Hearing one of the 1% suggest that maybe that dream is a nightmare makes people crazy, she said. “The pushback I get is: ‘You never worked a day in your life! You don’t know anything!’ Well, you are right, you are making my point for me! I should not have this power and influence. Just keep making my point for me,” she said.“For me to be speaking out against my own supposed self-interest has a wow factor that catches the attention. I don’t want to ever stop doing that. We need to model what it looks like to not defend your own self-interest all the time. When you are fine and other people are not, you put aside your own self-interest and stick up for somebody else.”The chance of Biden’s tax cuts making it through Congress are slim. US politicians rely too heavily on the wealthy and some Democrats as well as Republicans will balk at taxing them more. But Disney argues that the debate has changed. After the pandemic, US oligarchs aren’t the heroes they once were and, notably, Republicans have so far steered clear of an all-out attack on Biden’s proposal.“Four years ago if you’d said ‘billionaires tax’ then they would have said you can’t bash billionaires, you’re encouraging class warfare. I haven’t heard a whiff of that,” said Disney. “Let’s not kid ourselves, the other side has tested that and found it isn’t working. That class war rhetoric isn’t working any more. And that’s good news. Because if we don’t ruffle some feathers now, we are going to have a class war. A real one.”TopicsUS income inequalityIncome inequalityUS politicsInequalityUS taxationfeaturesReuse this content More

    • 125 Shares149 Views

      in US Politics

      Why New York mayor is ‘second toughest job in US’

      by

      It was during the administration of Fiorello LaGuardia that the position of New York City mayor became known as the “second toughest job in America”.LaGuardia, New York’s 99th mayor and a man whose name now graces the city’s streets, parks, schools and an airport labeled one of the worst in the country, became regarded as one of the city’s greatest ever leaders, despite facing a collapsing economy, all-powerful crime mobs and civic unrest when he took office in January 1934.When New York City’s next mayor takes office, however, they will face problems on perhaps an even larger scale, with the Covid-19 pandemic having ravaged a city already beset by deep income inequality and facing a reckoning over racial discrimination in policing and governance. The job could prove, once again, to be second only in difficulty to being the occupant of the Oval Office. Despite the challenges, dozens of candidates are running in June’s Democratic mayoral primary – which, given New York City’s left-leaning political makeup, is likely to decide the city’s next leader.The most pressing issue will be leading New York City out of the pandemic. The city was one of the worst hit by Covid-19, and many residents are still haunted by the scenes of April 2020, when ambulance sirens were a near-constant sound as hundreds of people a day succumbed to the virus.In total, more than 32,000 people have died, and in the most densely populated city in the country, the need for a successful, continued rollout of vaccinations will be essential, as will guiding economic and emotional recovery.“In communities across the city Covid is related to severe job loss in industries and occupations. It’s been differentially hard on the everyday workers of the city as opposed to the professional workers. So there’s a lot to be done to heal and revitalize those communities,” John Mollenkopf, distinguished professor of political science at the Graduate Center of the City University of New York, said.“All the candidates have lined up policy position papers on what they’ll do [regarding the recovery from the pandemic], but there’s also a kind of symbolic and emotional dimension to it – of going out to the communities and healing their pain, of inspiring them and giving them confidence in the future. That’ll be a very important thing the mayor will do.”The winner of a mayoral election is frequently a reaction to how voters feel about the incumbent – in this case the term-limited Bill de Blasio, whose popularity has waned dramatically since his election in 2013. This year, however, with Covid recovery dominating the election “that dynamic is a lot less at play”, said Neal Kwatra, a Democratic strategist who has been active in New York politics for years.A key issue for the incoming mayor will be schooling, Kwatra said – dealing with the lost year many children have experienced but also the struggle many New Yorkers have faced in balancing work and childcare.“Especially for working-class, middle-class, poor New Yorkers, for whom there is no choice, they have to go to work, they are frontline workers in many of these industries that are helping to bring the city back on its feet,” Kwatra said.“Figuring out how we get our schools open safely and securely for parents for teachers and for students is going to be an enormously important task for the next mayor.”As if wrestling with the 1,700 schools, and more than 1.1 million students, isn’t enough, the city’s next leader will need to breathe life back into a hospitality industry that has been decimated by the pandemic.“The job creation connected to those industries is enormous and significant, so I think part of what the next mayor is going to also have to do is figure out how to send a message to folks that New York is open for business, that New York is safe,” Kwatra said.Looming over any recovery is the racial inequality and police brutality that many New Yorkers or color have faced.In the summer of 2020 Black Lives Matter protests intensified the focus on racial issues, and the Democratic primary could yet yield only the city’s second non-white mayor. New York is still seeking its first non-male leader, with at least six women, two of them women of color, among the main contenders and a non-binary candidate also in the running.The demonstrations of 2020, which brought out tens of thousands of protesters in New York, means the winner of the mayoral race will be under pressure to reimagine law enforcement in New York.“I think it will be very high [on the next mayor’s agenda], but it also will depend on who is ultimately elected,” Kwatra said.There have been demands among the left to defund, either completely or partially, the police, and the next mayor will be expected to take a firm line with the New York police department, the largest force in the country which employs 36,000 officers and 19,000 civilian employees.Some candidates have pledged to reform the NYPD, to various degrees. Dianne Morales a former public school teacher and non-profit executive, has arguably gone furthest. Her website has a section dedicated to “defund the police”, and if elected Morales would reallocate $3bn of the police’s budget to more socially minded services.“As Black men continue to be essentially executed by the state day in and day out in America, it’s impossible for that to not begin to more profoundly affect this mayoral race,” Kwatra said.Maya Wiley, a lawyer and civil rights executive with experience in New York City government, could lean on her experience as chair of the agency responsible for handling complaints about the New York police department. Eric Adams, the current borough president of Brooklyn, who joined the NYPD after being beaten by police aged 15 with the aim of changing the department “from within” has also pledged reform.Andrew Yang, the tech entrepreneur who ran for the US presidency in 2020, has drawn much of the early media attention in the mayoral race, but in recent weeks has also attracted scathing criticism from his rivals, who have attacked his commitment to the city and his governing experience.It is a point they are likely to continue making, as whoever wins will have a battle on their hands as they grapple with the city’s post-pandemic finances.Reuters reported that a net total of 70,000 people left New York City in 2020, but the data is less straightforward. According to location analytics company Unacast, 3.57 million people left the city between 1 January and 7 December , and “some 3.5 million people earning lower average incomes moved into the city during that same period”. Unacast claims that this resulted in a scarcely believable $34bn in lost revenue.As government income has dropped, fears have been raised that the situation could be as dire as that of the financial crisis the city faced in 1975. Back then the city nearly went bankrupt, and leaders attempted to rectify it by introducing swingeing budget cuts.Kimberly K Phillips-Fein, a professor of American history at New York University and author of Fear City: New York’s fiscal crisis and the rise of austerity politics, said the current situation does not rival the fiscal chaos of the 1970s, but said it was important any incoming mayor “recall the dangers of widespread service cuts as a way of addressing fiscal shortfalls”.“At this moment in particular, such cuts could be disastrous. We need more faith in our public sector, not less. We need a coherent plan for reopening schools safely, and a commitment to use resources to accomplish this; we need public health programs that we can trust to protect us,” Phillips-Fein said.“Should budget shortfalls emerge, the city should strive to find ways to address them without stark service cuts. In the 1970s these helped to accelerate political and economic polarization, and the same might well happen today.”The picture does at least look rosier than it did a few months ago, after New York agreed on a $212bn state budget in April. The budget, if signed by Andrew Cuomo, the state’s governor, will increase taxes on the wealthiest residents in New York City, and, Democratic lawmakers say, release money for schools, rent relief and childcare, but the next mayor will inevitably face tough decisions over spending.The mayor’s spending will be fraught with danger as they bid to rectify wealth disparity in the city. The Citizens’ Committee for Children of New York found that income inequality, even pre-pandemic, has grown over the past 10 years, and the issue of affordable housing has been highlighted by the fact that Covid-19 rates were particularly high in neighborhoods already suffering from soaring rents.Data from Streeteasy revealed traditionally lower-income areas like Elmhurst, Corona and Jackson Heights saw dramatic numbers of coronavirus cases, whereas wealthy neighborhoods like Battery Park City and the West Village saw the lowest numbers. In the last six years, according to Streeteasy, it is the former that were already struggling to cope with rising rent.“Between July 2014 and July 2020, rents in the zip codes that would be most affected by Covid-19 rose by 22%. That’s twice the rate of the city overall, where rents grew 11%. In what would turn out to be low-Covid-19 zip codes, rents rose by 10% in the same period,” Streeteasy said.Putting all these issues together, it is clear that the next mayor will have a daunting task ahead in terms of hauling New York City back on track. But as the city reports an encouraging vaccination rate, and as bars, restaurants and sporting venues begin to reopen, there are plenty of people who think reports of the city’s demise are exaggerated.“We’ll need a mayor that understands that the Covid crisis revealed in new ways the underlying class and status divisions in the city,” Mollenkopf said.“But New York is going to come back faster and better than the skeptics think. There’s a reason that the [population] concentration levels were as high as they have been in New York City – very good economic, social and political reasons. And the virus has given that a bruise but it hasn’t really changed anything.“So yes, it’s going to be a challenge. But it’s a great opportunity, also, for the next mayor.” More

    • 138 Shares169 Views

      in US Politics

      US minimum wage activists face their toughest foe: Democrat Joe Manchin

      by

      Hopes that the US will finally increase the federal minimum wage for the first time in nearly 12 years face a seemingly unlikely opponent: a Democrat senator from one of the poorest states in the union.Joe Manchin of West Virginia, the state’s former governor and the Democrats’ most conservative senator, has long opposed his party’s progressive wing and is on record saying he does not support increasing the minimum wage from $7.25 to $15 an hour, the first increase since 2009. “I’m supportive of basically having something that’s responsible and reasonable,” he told the Hill. He has advocated for a rise to $11.None of this has found favor with some low-wage workers in a state where an estimated 278,734 West Virginians lived in poverty in 2019, 16% of the population and the sixth highest poverty rate in the US.Last Thursday Manchin reaffirmed his stance during a virtual meeting with members of the West Virginia Poor People’s Campaign (WVPPC), a group pushing for an increased minimum wage and other policy changes that would benefit the working class.That meeting was closed to the media but at an online press conference immediately afterward, participants said Manchin refused to budge. “He was kind of copping out,” said WVPPC member Brianna Griffith, a restaurant worker and whitewater rafting guide who, due to exemptions for tipped workers, only makes $2.62 an hour.As a result of her sub-minimum wage job, Griffith received only $67 a week in unemployment benefits until that ran out in August. She lost her house and was forced to move in with her grandmother. Although she has now returned to work, business is slow and she estimates tips have fallen by 75%.When Griffith told Manchin about her plight on Thursday, she said he asked about the $600 stimulus check approved by Congress in December. “He seemed to think that $600 … was enough to get me by,” she said. “I feel like he’s got his head in the clouds and he doesn’t understand what’s happening to poor people in West Virginia.”Despite Manchin’s insistence on an $11 minimum wage, according to MIT’s living wage calculator, even a $15 minimum wage would only provide a living wage for single West Virginians without children. For a West Virginia family with two working parents and two children, both parents would need to be making at least $20.14 an hour to make ends meet.Griffith said if the minimum wage was increased to $15 an hour, “I could afford to live on my own. I could afford a car that’s not 25 years old.”The Rev Dr William Barber, co-chair of the national Poor People’s Campaign, was in last week’s meeting and said Manchin agreed the current $7.25 minimum wage was “not enough”.But Barber said he was “amazed” Manchin could hear from people like Griffith and still oppose increasing the minimum wage to $15.“What he is suggesting would just further keep people in poverty and hurting,” he said.Raising the minimum wage was a key part of Democrats’ 2020 platform. The former presidential candidate and now Senate budget committee chairman, Bernie Sanders, has referred to the current $7.25 rate as “a starvation wage”.The wage hike, formally known as the Raise the Wage Act of 2021, is now part of a proposed $1.9tn Covid-19 relief bill. The measure would incrementally raise the minimum wage from $7.25 to $15 over the next four years.With only a razor-thin majority in the Senate, all 50 Democrat senators need to be onboard for the bill to pass. But in addition to Manchin, Kyrsten Sinema of Arizona has told Politico she does not want the minimum wage increase to be part of the Covid relief package.There are some reasons to be hesitant about increasing the minimum wage. A Congressional Budget Office (CBO) report detailing the economic impact of the Raise the Wage Act has estimated the legislation would eliminate an estimated 1.4m jobs and would swell the national debt by $54bn over the next decade.But the report also estimates a $15 minimum wage would lift 900,000 people out of poverty nationwide and inject $333m into the US economy.Other economists have disputed the CBO report. Estimates by the left-leaning Economic Policy Institute predict 32 million US workers would benefit from the minimum wage increase, which includes a quarter-million workers in Manchin’s home state of West Virginia.WVPPC member Pam Garrison was also on Thursday’s call with Manchin. Garrison is 55 years old and says she has earned minimum wage her entire working life and makes ends meet by taking side jobs cleaning houses. She spoke of the mental, physical and emotional toll that living in poverty has on people like her.“You’re just frazzled,” she said. “If you’ve never lived in poverty, you have no idea what it does to you.”If you’ve never lived in poverty, you have no idea what it does to youGarrison said Manchin ‘heard our side” but is reluctant to embrace a $15 minimum wage because he is worried small businesses could not absorb the increased labor costs. But she said giving low-wage workers more money would also benefit small businesses.“If you give us a decent pay, we’re going to put the money back into the economy [and] we’re going to be able to feed our families,” she said.Members of the WVPPC plan to continue lobbying Manchin on the Raise the Wage Act despite his seeming unwillingness to change his stance on the legislation.The group will hold a masked, socially distanced rally outside his office in Charleston, West Virginia, on Monday. A similar rally will be held at . Sinema’s office in Pheonix, Arizona.Manchin’s office denied multiple requests for comment.Zack Harold is a freelance writer and radio producer in Charleston, West Virginia. He is a regular contributor for West Virginia Public Broadcasting’s Inside Appalachia and formerly served as the Charleston Daily Mail’s entertainment editor and managing editor for WV Living, Wonderful West Virginia and WV Focus magazines More

    • 188 Shares179 Views

      in US Politics

      The federal minimum wage has been $7.25 since 2009. This is indefensible | Hamilton Nolan

      by

      The minimum wage is a moral issue masquerading as an economic one. Stone-cold capitalism does not demand a minimum wage, any more than it demands child labor laws or workplace safety. Rather, we demand a minimum wage, due to the belief that there must be a floor on human dignity. The public debate on the issue should always happen on those terms, lest we allow it to slide into the insincere wasteland of “What’s best for small business,” where all ideas good for working people go to die.America’s federal minimum wage today sits at $7.25 an hour, unchanged since 2009. In that time we have been through an economic crash, a slow, decade-long recovery and another economic crash, and after all of that it is still legal to pay a full-time employee working 40 hours a week for 50 weeks less than $15,000 a year. Our nation’s billionaires have gained more than a trillion dollars in wealth in the past year, but there are full-time workers who have lived with the same poverty wage since before Barack Obama had any grey hair. Anyone who is not actively trying to raise the minimum wage is asserting that this sickening juxtaposition is OK. It’s not.When the Fight For $15 movement began demanding “$15 and a union” for fast food workers in 2012, it was viewed by even those sympathetic to it as a bit of a pipe dream. Now, as Democrats in Congress work to include a national $15 minimum wage in the pending coronavirus relief bill, that movement’s goals are closer to becoming a reality than they have ever been. Of course, that is not a completely happy story – one reason the number sounds more realistic today is because $15 is not worth what it was in 2012. If you want to grasp how hard the Fight For $15 has been, consider the case of Terrence Wise, its single most famous rank and file leader. He has been profiled in countless media outlets. He has traveled the country for marches and rallies. He has even visited the White House to appear with President Obama. And after all of that, he makes $14 an hour working at McDonald’s. If his movement succeeds, he is still in line for a raise. There is not a billionaire in the world who works as hard as a full-time fast food workerEven if the Democrats succeed on this issue, either in the relief bill or with the standalone “Raise the Wage Act” that has also been introduced in Congress, it could take until 2025 before the $15 minimum wage is fully phased in. Meanwhile, we know that if the minimum wage had kept up with rising worker productivity over the past 50 years, it would be more than $24 an hour today. A victory will not really be a victory. It just puts us less far behind.To the extent that there is any genuine opposition to raising the minimum wage on economic grounds – rather than on the pure winner-take-all greed of the investor class, which is in fact what drives the vast majority of opposition to working people making more money – it is misplaced. Mainstream economists now recognize that raising the minimum wage does not in fact have the automatic job-destroying effect that Econ 101 textbooks assumed. Its biggest effect is making it slightly less miserable to be someone who works a job that society has deemed to be both wholly necessary and also unworthy of respect.It is really not that hard to understand why America has a class war. It is because the rich have chosen it. The rest of us, and in particular the poor, are just being swept along in the storm. No issue crystallizes the many lies behind the class war like minimum wage. It affects not some mythical lazy people without the drive to succeed, but rather the people who work harder than anyone, in the jobs that nobody else wants, but which we all know must get done. There is not a billionaire in the world who works as hard as a full-time fast food worker. The morality tale at the heart of the minimum wage debate is not about a benevolent society deciding how much of a kindly helping hand it will extend to those at the bottom of the economic ladder; it is actually about a merciless, cutthroat society arranged to funnel wealth upwards deciding how far down it can press the weakest parts of the labor force before they break. One thing that all opponents of a higher minimum wage have in common is that they would never dream of valuing their own time as cheaply as they think millions of other, lesser people should be forced to.Democrats must force the $15 wage through Congress while they control it, even if that means they all have to gang up on Joe Manchin and Kyrsten Sinema in the lunchroom. But even more important, they have to recognize that they have a lot of catching up to do. What morality really demands is not a minimum wage, but a living wage. The Fight For $25 begins on the day after the current battle is won. More

    • 88 Shares169 Views

      in US Politics

      Coronavirus sharpens America's already stark economic inequalities

      by

      [embedded content]
      Walter Almendarez doubts there will be any presents beneath his artificial Christmas tree – not for his daughter, his nephews or anyone else.
      Back in March, Almendarez reread an email over and over again, trying to process the news that he had just been let go from Los Angeles’s Chateau Marmont, where he had worked for over two decades. He was among more than 200 people fired by the swanky hotel in one fell swoop.
      “It was just terrible, the way they did it,” he said.
      Widespread local shutdowns made finding a new job practically impossible, and soon, he used up his 401(k) retirement savings just trying to pay the bills.
      Like Almendarez, tens of millions of people across America are struggling to make ends meet in an economy devastated by the impact of efforts to control the coronavirus pandemic. Yet at the same time millions of other Americans are enjoying an end-of-year spending spree. The National Retail Federation is projecting that holiday sales will jump between 3.6 and 5.2% this year compared with 2019, with consumers collectively spending well over $750bn.
      Those startling discrepancies represent a stark example of how the pandemic has exacerbated America’s already chronic inequalities, amid a widespread awakening to the country’s deep-rooted problems with economic and racial injustice.
      “It is definitely something that has increased disparities between white and Black, between those well-off and less well-off – high wage, low wage. All of those things have been absolutely pulling apart,” said Elise Gould, a senior economist at the Economic Policy Institute (EPI).
      During the pandemic, 651 billionaires have accrued more than $1tn in additional wealth – enough to send every American a $3,000 check and then some. But so far, that prosperity has not trickled down to 26.1 million US workers, who in November were still wrestling with direct impacts from the economic downturn, including unemployment and drops in pay.
      Those hardships have disproportionately fallen on Black and brown people, who were less likely to be able to work from home even pre-pandemic. In the third quarter of 2020, the unemployment rates for Black people and Latinos were 13.2% and 11.2% respectively, compared with 7.9% for white people.
      The slowdown has also caused a “shecession” for women, especially women of color, who have been overburdened with caretaking responsibilities while simultaneously watching their industries flounder.
      As Americans struggle to pay rent or buy food, “the worst suffering” people can experience “could really be heading for us as we go into the end of the year”, warned Amanda Fischer, policy director at the Washington Center for Equitable Growth, a research and grant-making non-profit.
      Early into the pandemic, Congress’s Cares Act, which provided $2.2tn in coronavirus aid, proved “one of the most effective anti-poverty tools we’ve seen in American history”, Fischer said. But those provisions were only temporary, and once they vanished, vehicles lined up outside food banks while renters fell months behind on their bills.
      Then, when the US economy started to rebound, it did so through a “K-shaped” recovery, benefiting the rich and leaving behind almost everyone else. The stock market – where about 80% of wealth has historically been owned by the top 10% of households – continued to surge, and CEOs projected widespread confidence in the economy, despite many of them expecting to reduce their workforce and let wages stagnate.
      High earners also fared well, with the employment rate for those making over $60,000 eventually eclipsing what it had been near the beginning of 2020, according to not-for-profit organization Opportunity Insights. More