Leo W. Gerard

President’s Perspective

Leo W. Gerard USW International President

One Percenters Stuff their Pumpkin Pie Holes

One Percenters Stuff their Pumpkin Pie Holes
This is what a $75-a-pound turkey struts like.

This Thanksgiving, in dining rooms across America, the turkey will be smaller, the stuffing more meager, the pumpkin pie sliced thinner. Gratitude will be given. But roiling just below the surface, for far too many families, will be economic anxiety.

The vast majority of working Americans haven’t seen a real raise in 35 years. Meanwhile, every year, their health care costs rise. Their employers eliminate pensions. And their kids struggle with rising college or technical school tuition and debt. Workers worry whether they will ever be able to pay the bills.

By contrast, on the other side of the Macy’s Thanksgiving Day Parade, the richest 1 percent are supersizing their feasts. For example, three families will spend $45,000 – each – for Marie Antoinette-style meals, gold flakes and all, at the Old Homestead Steakhouse in New York City. That’s up by $10,000 from the restaurant’s Thanksgiving fare for eight last year. It’s more, for one meal, than the average American worker earns in a year.

The 1 percent can spend $45,000 for a Thanksgiving supper because they’re gobbling up virtually all of the income from workers’ productivity increases. And now they’ve launched a new assault on workers. It’s a lawsuit called Friedrichs v. California Teachers Association (CTA). The 1 percent hopes it will prevent public service workers like teachers from joining together to collectively bargain for better wages and working conditions. If the $45,000-Thanksgiving-dinner crew wins the case, they’ll go after private-sector labor organizations next. They intend to gorge themselves until there’s nothing left for workers.

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

Liz Iacobucci

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

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

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

And it’s not getting any better.

Here’s the view, from the financial sector.

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

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Global Crisis in Steel and Aluminum Flowing from Chinese Excess Capacity; More to Come

Terrance Stewart

Terrance Stewart Managing Partner, Stewart and Stewart

In the United States, the domestic steel industry is in the midst of a major crisis as they try to deal with waves of imports that seem to flow directly (i.e., imports from China) and indirectly (i.e., from other countries facing import challenges from China in their home markets and hence expanding their exports) from massive excess capacity in China and in other countries.  A large number of trade remedy cases have been started in the US in 2015 on corrosion resistant steel, cold rolled sheet, hot-rolled sheet and various types of pipe and tube products.  More cases seem certain to follow as problems in other parts of the steel sector are identical to those that have led to the recent rush of cases.

The U.S. steel industry is not alone, as the sector is in crisis around much of the world.  The recent closure of steel facilities in the United Kingdom has led the EU to scramble to determine how to address the problem of Chinese overcapacity despite a number of ongoing investigations.  Similarly, cases on different steel mill products from various countries  have been filed in the last year or two in many other countries as well (e.g., EU, Australia, Indonesia, Thailand, Russia, Canada, Mexico, Malaysia, Turkey).

The story is being repeated in the aluminum sector as well with many unwrought aluminum facilities being closed in the US and other western countries in recent years and some trade cases being filed.  Indeed, Alcoa recently announced the idling of three facilities in the US (New York and Washington) with a capacity of more than a half million tons – a significant portion of the remaining capacity in the United States.  The problem again flows from massive excess capacity in China.

In both sectors, the underlying facts are similar.  In the late 1990s, Chinese capacity amounted to 10-15% of global capacity.  With massive government incentives, state ownership and support, by 2014 each industry had ballooned to have more than half of global capacity having accounted for nearly 80% of global capacity expansions.  China’s excess capacity in each sector is enormous – in steel exceeding total consumption of steel in the EU and the US – with utilization rates as low as 70%.  Import surges of 50-100% have been seen in a variety of products as a result.

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After Billions of $$$ to Stockholders, UnitedHealth Claims Poverty Due To Obamacare

Liz Iacobucci Author, NH Labor News

Yesterday’s 24/7WallSt article about UnitedHealth said that an “earnings warning” issued by the corporation “could be a serious blow to at least part of ACA/Obamacare.”

UnitedHealth’s latest advice to investors is that the corporation now expects slightly lower 2015 profits.  (Can’t help noticing: that recalculation includes a write-off of “$275 million related to the advance recognition of 2016 losses.” Nevermind that we haven’t actually gotten to 2016 yet; UnitedHealth is already calculating losses.)

Apparently, that press release was worth the headline “UnitedHealth Warning Creates Huge Spillover, With Big Implications Ahead.”

Just a month ago, 27/7WallSt was writing happier news about UnitedHealth. Quarterly earnings per share were better than expected, and better than 2014. Premiums were up 9.87% over last year. The company was adding about 100,000 new subscribers a month (1.7 million new people a year). And for the first three quarters of 2015, things were so rosy that UnitedHealth spent $1.1 billion buying back its own stock.

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A Tribute to Union Members

A Tribute to Union Members

Union Matters

Wage Theft is Crime, Deserves Jail Time

A Papa John’s franchise owner in New York City was sentenced last week to 60 days in jail for wage theft, a potentially precedent-setting punishment that could have wide-reaching consequences for the enforcement of labor law.

Abdul Jamil Khokhar pled guilty in July to cheating workers out of $230,000, denying them earned overtime pay and falsifying records to keep this information from tax authorities. Last week, he faced additional penalties: $280,000 in damages and what may be the first ever jail sentence for wage theft.

In the past, Khokhar’s illegal business practices would have likely yielded only a civil suit and the payment of a relatively small fine. However, New York Attorney General Eric Schneiderman, who earlier this year called fast food wage theft a “crime wave,” has been pushing for stronger sentences, joining other attorneys general across the country in making wage theft a top priority.

Schneiderman is right to treat Khokhar’s actions as a crime. Employers steal billions of dollars every year from workers, and, just like car theft, home invasion and mugging, wage theft has real victims.

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