YOU WILL NOT FIND ANY GOV HOWLING ABOUT CEO PAY!!!
Report shows CEOs in US cashed in during the pandemic as workers lost jobs, wages and lives
As jobless workers struggle to survive, find work, pay their bills and feed their families, the CEOs overseeing the lowest paid workers in the US increased their compensation by 29 percent last year, for an average increase of $4 million, while workers’ wages declined by 2 percent, a $550 decrease.
US states begin eliminating unemployment aid even as nearly half a million jobless claims were filed last week
The US Department of Labor (DOL) reported Thursday that combined federal and state unemployment claims last week topped 500,000, demonstrating that over a year after the worst public health disaster in a century and steepest economic crisis to hit the working class since the Great Depression, millions of workers continue to struggle to find safe, well-paying and consistent work.
For the week ending May 15, according to the report, an estimated 444,000 workers filed for state unemployment, while over 95,000 initial claims were filed under the CARES Act’s Pandemic Unemployment Assistance program, designed for so-called “gig” and contract workers.
The nearly 540,000 combined claims between state and federal programs are over twice the pre-pandemic average of 225,000. Overall, some 15,975,000 jobless claims were filed across all programs, and under any other circumstances, the figures in the report would be considered catastrophic. However, the somewhat stagnant trajectory of new jobless claims is being hailed in the capitalist press as a sign that the economy is “back on track.”
On Thursday, White House Press Secretary Jen Psaki claimed the jobless numbers were a vindication of the Biden administration’s economic policies and the American Rescue Plan, which halved federal unemployment payments from the $600-a-week under the CARES Act to only $300.
In reality, over 8 million jobs have yet to return since March 2020, with last month's jobs report revealing that roughly 2.7 million workers have been out of work for over a year, representing about 29 percent of all jobless workers.
Following April’s job report, which showed only 266,000 new jobs were added, well below Wall Street economists’ hyped “expectations” of 1 million new jobs, a coordinated campaign by businesses and governors alike emerged, demanding an end to all pandemic-related unemployment benefits in order to resume the exploitation of the working class and boost the production of profits.
Unconcerned with the health and wellbeing of the majority of the population, Wall Street and their politicians are attempting to blunt demands by workers for safe jobs and increased wages by ending the miserly federal unemployment benefits included in the American Rescue Plan. The $300 federal unemployment supplement is set to expire September 6, however, as of this writing, 22 states have announced they will be terminating the benefit by the end of July, affecting some 3.6 million people.
While every state so far that has announced it will be ending the supplement is governed by a Republican, Democrats have signaled they support the ending of benefits as well. Meanwhile, the Biden White House, in its trademark fecklessness, has claimed it can do nothing to prevent Republican governors from denying unemployment benefits to eligible workers.
Speaking for a growing number of Democrats and their wealthy backers, Democratic West Virginia Senator Joe Manchin told Politico last week he will “never vote for another extension” of unemployment benefits given the existence of vaccines, of which less than half of the population has received a single dose in the US. Even as states move to close down COVID-19 testing centers and lift all remaining mask mandates and social distancing restrictions, the seven-day weekly average of coronavirus cases remains above 30,000 with nearly 600 reported deaths daily.
Republican Governor of Montana Greg Gianforte led the charge to eliminate the federal benefit earlier this month. Demonstrating how the attack on workers’ unemployment benefits is a bipartisan class policy, Gianforte was backed by Montana Democratic Senator Jon Tester. Tester said he agreed with his proposal to eliminate the checks in June, telling Politico it was not an “unreasonable” thing to do. In a separate recent comment to the Missoula Current, Tester emphasized that “it’s important to get people back to work as soon as possible. I know there’s a lot of businesses out there looking for people to go to work.”
New Hampshire Democratic Senator Jeanne Shaheen, likewise, agreed with Manchin and Tester, telling Politico that federal unemployment benefits “should not be extended.”
While no Democratic governors have so far announced their intention to eliminate the federal unemployment benefit early, at least 37 states, Democratic and Republican alike, have enacted rules requiring anyone collecting jobless aid to search for work and provide proof they are doing so. This time-consuming process is designed to frustrate workers in need of aid and is compounded by the fact that dilapidated state unemployment systems and broken phone trees often result in eligible workers losing out on their benefits while trying to adhere to changing unemployment eligibility rules.
In Wisconsin, Republican legislators have advanced legislation to excise the weekly payments, which Democratic Governor Tony Evers said he was “strongly considering vetoing,” but that he had not “decided yet” if he would. There is no doubt that many other Democratic governors are likewise considering ending the payments.
While capitalists complain of “lazy” workers and of a “labor shortage,” the fact is that millions of working class families have been affected by the virus, leading to over 910,000 deaths in the US. Many working age adults have been killed by the virus and millions more are hesitant to return to low-wage jobs where they must come face to face with customers. In general, the jobs which are available are generally low-paying with inconsistent schedules.
The DOL report revealed that Nevada, heavily reliant on the tourist industry, has the highest unemployment rate in the country, at 6.1 percent. In Las Vegas, where casinos are set to resume 100 percent capacity limits on June 1, many previously laid off workers who have been called back to work have been forced to accept reduced pay or fewer hours.
“It’s very frustrating every day I work there, there is no certain time,” an MGM worker explained to the World Socialist Web Site. Even before the pandemic, he noted, “I remember almost a month where I have no days to work. How can you survive and pay your obligations if you are not making days? I don’t want to go back there.”
Another Nevada worker explained the difficult situation educated workers like herself find themselves in, “I’ve been told I am ‘over qualified’ because of my master’s degree, but then I am struggling with even getting a job with my masters, so what am I supposed to do?”
As jobless workers struggle to survive, find work, pay their bills and feed their families, the CEOs overseeing the lowest paid workers in the US increased their compensation by 29 percent last year, for an average increase of $4 million, while workers’ wages declined by 2 percent, a $550 decrease
Soaring prices push US households to the edge
Surging prices for necessities like used cars, phones, and housing have caused the biggest jump in “core” consumer prices in nearly four decades, according to new figures released Wednesday by the US Department of Labor (DOL).
Rising prices for food, heating oil, gas, and other necessities are eating into workers’ incomes both in the United States and internationally.
Workers are finding it increasingly impossible to make ends meet, even if they are employed full-time. The minimum wage in the United States remains at $7.25 per hour, and US President Joe Biden has reneged on his campaign promise to raise it.
Workers’ real average hourly earnings have plunged, falling 3.4 percent over the past year, according to the latest jobs report from the DOL, as companies used the pandemic as a pretext to slash wages over the past year.
Overall consumer prices increased 4.2 percent from a year earlier, the fastest pace since 2008, and significantly above economists’ expectations.
But “core” consumer prices, which exclude food and energy prices, rose 0.9 percent between April and March in the largest monthly increase since 1982.
The surge was extremely broad-based, driven by prices for used cars, air travel, housing, furniture and other consumer goods.
The biggest driver of rising overall consumer prices was rising costs for used cars, which increased by 10 percent over the past month and are up 18 percent for the year. The surge—the highest on record—is driven by the shutdown of auto assembly plants due to a shortage of raw materials, primarily microchips.
In April, the average price for a used car exceeded $25,000 for the first time in history, according to J.D. Power.
The CPI figures significantly underestimate the real price of housing, since they only take into account rent, not the price of owning or renovating a home. Over the past year, home values have shot up more than 10 percent nationwide, and in many of the zip codes, the increases are far higher.
The Wall Street Journal noted that “The median sales price for existing single-family homes was higher in the quarter compared with a year earlier for 182 of the 183 metro areas tracked by the National Association of Realtors, the group said Tuesday. In 89% of those metro areas, median prices rose by more than 10% from a year earlier.”
The increase in home values is affecting those least able to afford them. The value of homes priced under $100,000 have grown the most out of any price point over the past three years, according to an analysis by the Journal .
Lumber prices have more than doubled since the start of the year, making it impossible for many households to carry out much-needed repairs on their homes, and vastly increasing prices for new construction.
Prices are surging for nearly every commodity. The price of tin, essential to manufacturing electronics, shot up by 46 percent this year. Other raw materials, such as copper and steel used in electronics and appliances, are surging amid a mass speculation by large investors.
The run-up in food prices is driven by surging prices for staples like soybeans and corn, which have increased by more than 50 percent over the past year.
The Los Angeles Times noted that “last month, about 36% of small businesses surveyed by the National Federation of Independent Business indicated that they had raised selling prices, the highest share in 40 years.”
“Any animal that you eat is eating grains, and it’s eating corn, soybeans, or soybean meal, and perhaps even some wheat,” Sal Gilbertie, the CEO and president of Teucrium Funds, told Yahoo Finance Live. “We see the prices of these grains go as high as they’ve been literally since 2012, 2013,” he said.
Dana Peterson, the Conference Board chief economist, told Yahoo Finance Live, “While some of these price increases may fade with the pandemic, some may not.” He said the high grain prices will remain “at least a year, maybe two years.”
Periods of high inflation have previously corresponded with an intensification of the class struggle, with workers demanding higher pay to keep up with rising prices. The sensitivity of the US political establishment to these wage demands was expressed by the decision of the Democratic governor of Connecticut, Ned Lamont, to call up the National Guard to help suppress a strike by 3,400 nursing home workers set to begin Friday morning.
Report shows CEOs in US cashed in
during the pandemic as workers lost
jobs, wages and lives
The Institute for Policy Studies (IPS) published a significant report on May 11 that details the rigging of executive compensation plans by corporate boards during the pandemic, so that vast sums could be funneled into the pockets of millionaire executives while workers suffered unemployment, reduced wages, exposure to COVID-19 and death.
Under the title “Pandemic Pay Plunder,” the top finding of the IPS’ 27th Annual Executive Excess report is that among the top US corporations with the lowest paid workforces, CEOs received a 29 percent increase in compensation, while workers’ wages fell by 2 percent on average last year.
The IPS research shows that 51 out of the 100 corporations on the S&P 500 list with the lowest median worker wages bent corporate rules during the pandemic to ensure that their CEOs increased their compensation by an average of $4 million, to a total of $15.3 million, while workers’ wages fell by more than $550 to $28,187. The CEO-to-worker pay ratio for these corporations reached 830 to 1.
In introducing the report, IPS authors Sarah Anderson, director of the Global Economy Project and co-editor of Inequality.org, and Sam Pizzigati, IPS associate fellow and co-editor of Inequality.org, write: “American families have been simply unable, on their own, to bear the COVID crisis. Meanwhile, corporate chief executives in the United States have continued to score the sorts of windfalls that have ballooned billionaire wealth.”
In explaining how corporate boards modified compensation rules to ensure a windfall for executives, the report says that the companies engaged “in various rigging maneuvers” such as (1) lowering the performance numbers so executives could meet their bonus targets, (2) awarding special “retention” bonuses, (3) excluding poor second-quarter (March-May 2020) results from performance evaluations and (4) replacing performance-based awards with time-based awards.
The IPS report says that “an army of ‘independent’ compensation consultants” was retained by the corporate boards in order to “give all this rule-rigging a veneer of legitimacy.” For example, Carnival—the largest international cruise line company—paid Frederick W. Cook & Co. $423,274 to give its CEO bonus “a stamp of fiscal probity as the company’s profits cratered and workers suffered.”
In relation to the Carnival compensation scam, the report notes that the company stranded employees at sea for months while it scrambled to get customers back home. But after securing $6 billion in low-cost financing from the US Federal Reserve, it gave CEO Arnold Donald special pandemic “retention and incentive” stock grants valued at more than $5 million. “Arnold’s total 2020 compensation came to $13.3 million, 490 times the company’s $27,151 median worker pay” the report states.
The IPS study does not mention reports that nearly a dozen cruise line workers died in suicides committed during the lengthy period of forced isolation without pay on ships, or as a result of mental health problems after they came ashore.
Other specific examples given by IPS of corporate manipulation of executive compensation in the midst of the pandemic include the meatpacking, poultry and automotive industries. In the case of $30 billion Arkansas-based Tyson Foods, the report says that “executives didn’t meet their cash bonus targets last year,” but the board “gave them stock awards to make up the difference.”
Tyson CEO Noel White earned $11 million, which is 294 times Tyson’s $37,444 median worker pay. The report states, “Another recipient of those special stock awards was company chair John Tyson, a billionaire hardly in dire need of special support. The heir and grandson of the company founder, Tyson has watched his personal wealth increase 72 percent during the pandemic—to $2.6 billion.”
Tyson workers, like all poultry and meatpacking employees, were declared essential workers during the pandemic and forced to stay on the job. The report says the Tyson workers suffered the most COVID-19 infections and deaths in the industry, noting: “As of February 2021, more than 12,000 Tyson workers had been infected by the virus and at least 38 had lost their lives to it.”
The automotive supplier Aptiv—one of the spin-offs from Delphi Automotive, itself a spin-off from GM—has the widest pay gap (5,294 to 1) on the IPS list of 51 low wage corporations. Aptiv CEO Kevin Clark was paid $31.3 million while the median wage earner made $5,906 in 2020. The report says, “The Aptiv board inflated Clark’s paycheck by moving bonus goalposts and excluding 2020 results from the 2018-2020 performance period for long-term executive incentive awards.”
The report also explains that the company justified the massive payout to Clark—totaling an additional $18 million—“as nothing more than the product of ‘accounting adjustments’ related to 2019 and 2020 stock awards.”
Aptiv operates in 44 countries and did not disclose to IPS where the workers earning a median wage of a little less than $6,000 are employed. The global corporation—which specializes in automotive cooling systems—was the product of the multi-billion-dollar July 2015 merger of Delphi Thermal with the German-based Mahle-Behr GmbH and British-based HellermannTyton.
Some of the other companies highlighted in the IPS report for extreme CEO-worker pay ratios in 2020 are:
* Hospitality corporation Hilton Worldwide, where CEO Christopher Nassetta pocketed the largest rigged pay-package adjustments, for a total compensation of $55.9 million in 2020.
*Apparel corporation Under Armour, where half the workforce earns less than $6,669 per year. There, the company board “altered bonus metrics and replaced performance-based with time-based stock awards” for CEO Patrik Frisk, so as to pay him $7.4 million.
* Chipotle Mexican Grill, where CEO Brian Niccol “received $38 million in 2020 compensation, 2,898 times the restaurant chain’s median worker pay.” The firm’s board of directors inflated his bonus by tossing out the company’s poor financial results from the peak shutdown period and excluding COVID-related costs.
While the political conclusions of the IPS editors are for tax reform that will force companies to pay increased taxes for CEO-worker wage gaps of more than 50-1—which is itself a defense of social inequality—the facts and figures presented in the report are a devastating exposure of the criminality of the ruling class under conditions of the worst public health crisis in a century.
The IPS report was published just as the US political establishment was launching a campaign to eliminate weekly supplemental unemployment benefits for millions of workers who remain unemployed as a result of the economic crisis and deadly health conditions caused by the response of the corporate and financial elite to the pandemic.
Already more than half of US states have revived their work search requirements in an effort to force workers back to work at low-paying jobs. As reported by the New York Times on Sunday, Arkansas and Louisiana brought back these requirements months ago and others such as Vermont and Kentucky have done so in the last few weeks.
Laying bare the economic interests that lie behind the Centers for Disease Control and Prevention decision to lift the mask requirement for “anyone who is fully vaccinated” last Thursday, President Biden ordered the Labor Department four days before to pressure state governments to put the job search requirements back into place.
The IPS report is a further confirmation of the analysis made by the World Socialist Web Site that the capitalist ruling class lives by the motto, “Never let a good crisis go to waste,” and has used the pandemic to intensify the exploitation of the working class, further enrich itself and expand social inequality to unprecedented levels.
New Zealand Chops Migration to Deflate Housing Bubble
New Zealand’s prime minister is cutting immigration to help deflate the nation’s housing bubble and also to raise wages.
The small country near Australia is suffering from a real estate bubble caused by local companies’ demand for more immigrant house buyers, consumers, and workers. The housing affordability problem is worsened by the growing population of roughly 200,000 foreign temporary workers.
“We’ve long pointed to the fact a [economic] growth strategy that is solely built around [the rising] housing market and immigration [inflows] is not a sustainable long-term strategy,” left-wing Prime Minister Jacinda Ardern told the main radio broadcast network on May 18.
“The pressure we have seen on housing and infrastructure in recent years means we need to get ahead of population growth,” cabinet minister Stuart Nash said May 17.
New Zealand’s rising real estate bubble is mirrored in many other wealthy high-immigration nations, including the United Kingdom, Australia, and the United States.
However, U.S. political parties and media rarely mention migration’s impact on real estate prices, said Mark Krikorian, director of the Center for Immigration Studies:
In our collective imagination, we think of our country as having essentially unlimited space, so the idea of immigration raising housing prices just doesn’t register with people in this country in the way that it does in England or in New Zealand.
But migration’s impact on housing could become a big issue “if it’s presented as part of a broader critique,” he told Breitbart News, adding:
It requires a certain amount of education too. Newcomers aren’t settling an inch-thick everywhere in our huge country, they’re moving to very specific urban areas where they do have an influence on housing prices, especially when the local or state regulations make it hard to build more housing.
“A driver of housing prices is our immigration-fueled population growth, and I don’t know how [any politician] can get away from that,” said Andrew Good at NumbersUSA. Populists should be “working on thoughtful, comprehensive proposals that start with the question, ‘Hey, what’s the argument for allowing this or that on the demand side?”
In the United States, investors have long used migrants to inflate the rental and housing in coastal cities, such as os Los Angeles and New York. For example, legislators are offering $2.1 billion in aid to help keep illegal migrants on the job and paying their rents. Similarly, President Joe Biden’s January immigration bill includes a proposal by U.S. investors who want to spike housing prices in the heartland by delivering more visa workers to heartland states.
In New Zealand, the immigration reform is being pushed by the left-wing prime minister. It is being opposed by the right-of-center business part, which is calling on Ardern to spend taxpayer dollars to subsidize home building and purchases.
On May 18, the New Zealand radio anchor echoed those business critics when he asked Ardern if the reduction in temporary workers and migration would slow the nation’s overall economic growth:
Ardern: Our intention is to go and say [to employers] “Look, for those areas where you are highly reliant [on foreign workers], what is your [local] school’s training and education plan? What is the route that you’re doing to ensure that you’re engaging within [the labor market in] New Zealand?”
Anchor: But do you accept that New Zealand’s growth will slow [with less migration]?
Ardern: Well, actually we’ve also got a look at what impacts it has on local employment rates, what happens with wages as a result. You know, when we look at … what’s happened in horticulture, or in our dairy sector, they have lifted wages in order to access the domestic workforce. It also encourages training and education to ensure we have a pipeline of [home-grown] New Zealand workers.
The small nation is also deploying and developing robots to harvest crops with less labor.
Ardern’s migration reform is being driven by the very unpopular impact of legal and temporary migration on housing prices. A 2013 report by the Reserve Bank of New Zealand reported that even low migration rates spike housing prices for young couples who are trying to raise families:
Net migration changes are consistent with large housing effects. An additional net inflow that adds 1 percent to the population causes an 8 percent increase in house prices over the following three years and an additional house is built for around every six migrants. This is materially more than the existing number of people per household in New Zealand (around 2.5).
Long-term immigration to the small nation spiked to almost 100,000 people in 202o. The small country has a population of almost five million.
The housing problem worsened in 2020 when the national bank reduced interest rates as migration fell rapidly during the 2020-21 coronavirus pandemic. The low-interest rates made it easier for more locals and migrants to compete for houses amid the shortage. “New Zealand property prices have gone vertical,” reported macrobusiness.com.au, under the headline, “How RBNZ [Reserve Bank of New Zealand] pump-primed the property bubble.”
The Financial Times (FT) reported in March 2021:
Home prices have risen steadily in the pandemic, and in 12 months through to the end of January were up 19 per cent in New Zealand. The price of a typical Auckland home soared past $720,000, embarrassing Prime Minister Jacinda Ardern.
A global political celebrity, the liberal Ardern was elected on a promise of affordable housing. Fed up, her government has ordered the central bank to add stabilising home prices to its remit, starting March 1. It is novel and healthy for a politician to recognise the unintended consequences of easy money.
…This is widening wealth inequality, pushing homes beyond reach for the middle class, and not only in New Zealand. Of 502 international cities tracked by Numbeo, a research firm, prices are “unaffordable” (more than three times median family income) in more than 90 per cent. In recent years, the tiny minority of affordable cities has been shrinking toward zero.
“Ardern’s [banking] move may not slow the housing boom soon, because supply-and-demand dynamics are too strong,” the FT added.
Ardern has also moved to cut tax breaks for investors who buy multiple homes.
The popular reset of migration law is hotly resisted by investors, business groups, and their foreign workers. RNZ.co.nz reported May 18:
Migrant Workers Association spokesperson Anu Kaloti used the words “shocking” and “absurd” to describe the immigration reset.
She agreed that migrants were exploited and paid lower wages, but said what needed to change was not the number of migrants – rather the rules which bound them to a single employer in order to be sponsored.
The lobby group has a Facebook page featuring a May 20 post saying, “In solidarity with Palestine.”
“If you slow population growth, you slow [national economic] growth, and it also slows the economy,” said Micahel Gordon, an economist at the country’s Westpac bank, which gains wealth when investors borrow money to build more homes or create new companies, according to RNZ.
Ardern also rejected claims by business leaders that migrants are needed because New Zealanders are reluctant to work. “I disagree with that totally,” she told RNZ, adding:
The kiwifruit fruit industry were able to do in terms of completely shifting the balance of their workforce from overseas-based to a predominantly domestic one through Covid. That’s not to say it’s not been without it’s challenges, it has. But this is where we need to work with industry.
“Housing is a fundamental issue to the public,” said Good from NumbersUSA. But the U.S. debate is focused on zoning issues, although there is some reporting about the role of investors in pushing up house prices, he told Breitbart News.
In the United States,” he said, “the quality and thoroughness of the policy discussion is astoundingly shallow.”
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