Here’s a Law Walmart Doesn’t Want You to Know About

We already know CEOs of major corporations took home 354 times more pay than the average rank-and-file U.S. worker in 2012. Now, we have the opportunity to see what CEOs make compared with the typical worker in their own companies.

rule proposed by the U.S. Securities and Exchange Commission (SEC) would require companies to disclose the ratio of total compensation between CEOs and the pay of the typical worker. The SEC rule is part of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. Major corporations like Walmart really don’t like this, which is why we need your help.

If you want more transparency when it comes to what CEOs are paid compared with the people that make those companies run, please send a letter to the SEC supporting this rule. The comment period ends Dec. 2.

Tell the SEC companies must disclose CEO-to-worker pay ratios.

If you are an investor, make sure you identify yourself as one in the letter.

Reposted from AFL-CIO NOW

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Goldman Sachs Is Making Your Beer More Expensive

Goldman Sachs is making your beer more expensive. Why are they doing it? According to the investment bank, the reason is “economics.” According to actual economics, the reason is “profits.” The Washington Post explains how it works.

The U.S. produces less aluminum than is used for beer and soda cans and other products. Most of the other aluminum we use is obtained through futures contracts on the London Metal Exchange. Part of the cost of aluminum is based on market price, but the companies that use the metal in their products also have to pay the “premium,” which is the cost of getting aluminum to their processing plants. The London Metal Exchange must approve the warehouses where aluminum is shipped to, sets a maximum amount that can be shipped per day and sets the maximum rent that warehouses are allowed to charge the owners of the metal.

Goldman Sachs bought up a number of warehouses near Detroit three years ago and started paying traders more to store aluminum in their warehouses. Goldman then charges the beer and soda companies (and other users of the metal) rent as the metal stays in the warehouses. A surplus of aluminum in the warehouses means the metal stays longer and Goldman can charge more rent. The beer companies then pass on the increased premium to consumers, making end prices rise. Even if companies bypass the warehouses, the market price for aluminum has already been increased by Goldman’s manipulation of the market.

The Post concludes:

The bottom line: Banks have lots of money and have leveraged that buying power to control enough of the aluminum market to generate extra revenue, which—the [New York] Times calculates—has cost consumers $5 billion over three years.* So even if prices are lower than they were during economic boom times, they’re still higher than they would be under fairer market conditions.

The Federal Reserve could end the practice by refusing to renew the exemption that allows banks to own warehouses where such commodities are stored.

Reposted from AFL-CIO NOW

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Bills Would Curb Job-Killing Currency Manipulation

AFL-CIO President Richard Trumka released a statement today announcing support for the Currency Exchange Rate Oversight Reform Act of 2013 and its companion legislation in the House, the Currency Reform for Fair Trade Act of 2013. Trumka warned that currency manipulation by foreign governments leads to the loss of manufacturing jobs in the United States.

When foreign governments manipulate currency, they give producers in their country an unfair advantage. When a country’s currency is devalued by 25 percent, that means U.S. exports are 25 percent overpriced by comparison, while our imports from that country are underpriced by the same amount. Not only does this unfair practice severely damage the U.S. manufacturing sector, it also means that workers in those countries suffer from reduced purchasing power themselves.  The result on the U.S. trade deficit has been devastating—last year, the U.S. ran a trade deficit of more than $315 billion in trade in goods with China alone.

Congress must stand up for American manufacturing and put an end to the trade war being waged against working families and communities. Our country needs to create millions of good jobs now. We can no longer afford to be passive in the face of these illegal job-killing practices.

Read the full statement.

Reposted from AFL-CIO NOW

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3 Ways In Which the Massachusetts Senate Candidates Are Hugely Different

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Democratic Congressman Ed Markey and Republican private equity executive Gabriel Gomez are running to become the next U.S. Senator from Massachusetts.

The special election will be held on Tuesday, June 25, and June 5 is the last day to register to vote.

In local and national news, the coverage of the race has focused on the “horse race” and various things the two candidates have said – not so much on policy. But on issues affecting working families, there’s are huge differences between Markey and Gomez that we wish were making bigger headlines.

1.) Retirement. As a member of Congress, Ed Markey has been a longtime defender of Social Security. When both Republicans and Democrats were considering a plan to change the formula used to determine Social Security benefits to “chained CPI,” Markey opposed it.

“Chained CPI” (CPI stands for “consumer price index”) assumes that when prices go up, consumers will choose a less expensive product. This formula results in a lower “cost of living” estimate because it assumes people need less; using this formula to calculate Social Security is equivalent to a benefit cut.

Markey has said that CPI really stands for “cutting people’s income.”

Republican Gabriel Gomez, on the other hand, supports the “chained CPI” benefit cut, which he announced at an April 10 debate. As the AARP points out, if the government makes this switch for both Social Security and veterans benefits, current and future seniors veterans could lose $146 billion in benefits over 10 years.

2.) Wall Street. Ed Markey voted for the groundbreaking Wall Street reform bill, which ends some of the worst abuses of big banks and corporations (those same banks have since fought tooth and nail to weaken the reform). He also opposes Republican plans that would increase tax incentives for companies that ship jobs overseas.

Gabriel Gomez, who made his fortune as a private equity executive, has relied heavily on the support of Wall Street and the financial services industry in his run for office. Individuals working in finance have given Gomez’s campaign $278,000, 52 percent of his total campaign contributions. Bain Capital employees have given Gomez more than $12,000.

Not surprisingly, Gomez’s policy positions closely mirror that of the financial industry. He said that “onerous taxes” and “excessive regulation” are obstacles to job growth. He opposes raising taxes on the wealthiest Americans, and has attacked the Wall Street reform law.

3.) Health Care. The candidates differ starkly on the issue of Medicare. Ed Markey opposes cuts to Medicare, while Gabriel Gomez has said he favors raising the Medicare eligibility age. On his website and in his public statements, Gomez refers to Medicare as an “entitlement,” not as a guaranteed benefit.

Gomez hasn’t said at what age seniors should be eligible for Medicare, but a popular proposal would raise the eligibility age from 65 to 67. According to Roosevelt Institute fellow Matt Stoller, that would mean that 5 million 65 and 66 year olds would not be able to get Medicare coverage for at least a year, and 7 million would not be eligible for at least a month. Even with Obamacare fully implemented and every state accepting Medicaid expansion, this policy change would leave at least 200,000 seniors without health insurance, primarily those on the lower end of the economic spectrum. Those seniors would be denied the earned benefit that they paid for over the course of their lives.

Remember, the special election is on Tuesday, June 25, and the last day to register to vote in this election is Wednesday, June 5. If you live in Massachusetts or know someone who does, please share these three crucial pieces of information about where Markey and Gomez stand.

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Agency That Wall Street Did Not Want Announces Changes To Mortgage Industry


CFPB Director Richard Cordray in 2008

The Consumer Financial Protection Bureau (CFPB), the agency created as part of the 2010 Wall Street reform bill, announced yesterday plans to change the way the mortgage servicing industry interacts with consumers.

“For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress,” said CFPB Director Richard Cordray. “It’s time to put the ‘service’ back in mortgage servicing.”

The Hill reports on the proposed changes:

Under the CFPB’s proposal, if a homeowner gets behind on their mortgage and is facing foreclosure, the servicer would be required to make a “good faith” effort to contact the borrower and explain the foreclosure process, as well as provide counseling options.

Remember all foreclosures that were approved through “robo-signing?” That means the banks didn’t verify the paperwork – or even check if they technically owned the property – before starting the process of foreclosure.

The CFPB is also considering requiring servicers to have staff dedicated to working with struggling borrowers either facing foreclosure or trying to avoid it. These employees would have easy access to the borrower’s records, as well as the ability to determine if a loan modification could be pursued to avoid foreclosure. A common complaint by struggling borrowers was their inability to discuss their plight with an employee with their servicer.

Right, because a discussion with the servicer might result in the bank having to check their records to see if the seizure of a home was, what’s the word, legal.

Homeowners and policymakers were also frustrated by error-ridden documents at many servicers. Under the CFPB’s plan, servicers would have to address found errors within 30 days, or an even shorter timeframe if a foreclosure or payoff is at stake.

Our response to all of this? Fantastic, and long overdue. And we can’t help but remember how savagely Wall Street and their political allies in Congress fought the creation of this agency, the appointment of its originator Elizabeth Warren as its director, and then again the appointment of Richard Cordray. Now we know why – Cordray is arming consumers with the ability to fend off these long-accepted predatory practices.

The dirty secret about our economy right now is the enormous drag of foreclosures and the inability of homeowners to modify their loans. Sure, there was that much-trumpeted national foreclosure settlement, which resulted in $26 billion in assistance for struggling homeowners. But there were two big problems with that settlement: 1.) you can’t fix $700 billion in negative equity with $26 billion and 2.) in some states (like Wisconsin) anti-worker corporate-backed governors (like Scott Walker) took that money and used it to pay for tax breaks, so homeowners didn’t actually get any of it.

Needless to say, the so-called settlement did very little to alleviate the enormous economic pain felt by homeowners stuck in mortgages with no recourse, owing more to banks and servicers than they could possibly come up with, even if they sold their house.

Edward DeMarco, the acting director of the Federal Housing Finance Agency (FHFA), singlehandedly has the authority to reduce the principal on underwater mortgages. This would help families pay for mortgages that cost more than their house is worth. Two weeks ago, the Treasury Department offered to subsidize this process – but still no movement from DeMarco.

We’re very encouraged by what the CFPB is doing to protect future consumers, but we need to urge DeMarco to act – and help those who are struggling now. Sign our petition today.

Photo of Ohio Attorney General Richard Cordray from aflcio on Flickr, via Creative Commons.

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Getting the Economy Back on Track

At this week’s AFL-CIO Executive Council meeting, representatives from the organization’s member unions issued a strong statement laying out a vision for the economy and how to fix it.

The first step, of course, is admitting we have a problem. For years, the economy has been re-engineered in ways that benefited a tiny minority of the wealthy and powerful, rather than sharing prosperity broadly. Bank deregulation, outsourcing-friendly trade policy, shifts in the tax burden and the abandonment of the right to collectively bargain all had an impact on an increasingly unequal, and increasingly unstable, economy. Instead of wages that reflected their growing productivity, America’s working people relied on credit bubbles and mortgage debt to get by—and the financial sector grew ever further out of control as a result.

What’s worse is that, instead of changing gears and trying to build a stronger, fairer economy, many politicians are pushing to repeat the same old mistakes. This is true of some politicians in both parties, but it’s especially prevalent among the Republicans who won control of the U.S. House and many governors’ offices in 2010 and among the frontrunners for the Republican nomination for president. They explicitly look to arrest what progress has been made in reining in Wall Street, and to cut taxes even further for the very wealthiest, even as they look to erode the programs working-class families and retirees depend on. They’re pushing for cuts that would hurt health care, our schools and our infrastructure. The AFL-CIO statement says there’s a better path for our economy.

The statement offers these principles for what fixing our economy will look like:
• Public investment in infrastructure, energy, job training and education
• Tackling inequality by restoring the right to collectively bargain, increasing the minimum wage and making full employment the center of our economic agenda
• Restoring U.S. manufacturing and fixing unfair trade laws
• Reining in the financial sector so it supports the economy rather than risking another financial collapse
• Improving standards and wages for workers around the world to end the “race to the bottom”

Read the whole thing here. It’s a valuable summation of how we got here and where we still need to go.

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Portland to Wall Street: We’re Not Your ATM

Working America organizers set up a “Not Your ATM” booth at Occupy Portland. It was definitely a hit! We were also able to talk to many Portlanders about how big banks like Bank of America are nickel and diming consumers with new fees despite huge profits.

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Wait, What? Cantor Repackages His Tired Agenda as a Solution to Inequality

As the old saying goes, to a man with a hammer, everything looks like a nail. And to Eric Cantor, everything looks like an opportunity to shovel more money to the very wealthiest.

After referring to the Occupy Wall Street protestors as “mobs,” Rep. Cantor, a Virginia Republican, is trying to shake off his well-deserved reputation as the smug, shameless defender of the corporate-money agenda by giving a talk on economic inequality this Friday. The second-highest-ranking House Republican must be feeling some heat, because saying we need to “take care of the income disparity in this country” is not exactly in Cantor’s standard talking-point arsenal.

Cantor’s showy display of concern is a sign that the Occupy Wall Street protests are changing our national political conversation for the better. The message is getting out there even as the typical array of right-wing political strategists, well-connected business reporters and corporate-funded think tanks are desperately trying to dismiss, demonize or neutralize the protests.

So what does Cantor have to offer as a solution to the very real problem of economic inequality? Surprise! It’s exactly what Eric Cantor was offering last week, the week before and the week before that. It’s more tax cuts to corporations and the very wealthy, more rollbacks of regulations that protect workers and consumers, and more slashing of services and support systems that people hit by the recession really need. In particular, Cantor and his allies are looking to eliminate even the modest, insufficient regulations we currently have on Wall Street and the big banks who caused the financial crisis. If Cantor were capable of embarrassment, he might be hesitant to advance a “jobs plan” that doesn’t create jobs.

Cantor claims that his agenda is going to promote economic growth because it “gives private enterprise a chance to grow.” But the problem facing our economy isn’t that businesses are insufficiently profitable or insufficiently flush with cash to create jobs. It’s that high unemployment, lost wealthy and stagnant incomes are holding back demand. There is zero wrong with our economy that can be fixed by directing more money towards the companies who are failing to create jobs despite sitting on trillions in cash. Cantor’s economic prescription is based on wishful thinking.

In addition to being wrong, Cantor’s argument here is just plain lazy. Low taxes on the very wealthiest, light or nonexistent regulation of big businesses and reduced services are what politicians like Cantor always offer, regardless of the circumstances. And they’re what we’ve tried already—after all, the grim job and income record of the Bush administration came at a time when Cantor and his party controlled the levers of policy. It only “worked” to create economic growth for a tiny sliver of the very wealthiest, which may be the only kind of economic growth that actually matters to Cantor.

You can thank the Occupy Wall Street protestors for changing our national conversation so much that even Eric Cantor feels he has to show he cares about inequality. But he’ll have to try a lot harder to actually propose solutions that are anything more than reheated leftovers of the failed policies of the past decade.

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Wall Street Frowns on Hiring

Google Inc. is hiring. The company plans to hire over 6,000 new employees this year. From NPR:

The company outlined its hiring plans Tuesday with The Associated Press without providing many specifics beyond its pledge to hire more people than it did in 2007 when it added 6,131 workers. Google hired nearly 4,600 people last year to end 2010 with 24,400 employees. Based on its hiring commitment, Google’s work force will increase by at least 25 percent this year.

Wow! A big company, doing so well that they want to hire thousands of new employees! This is great news, right?

Uh…not so much….

But Google’s push to further expand a work force that grew by 23 percent last year may not be as well received on Wall Street, where the Internet search leader’s spending has annoyed some investors who would prefer a more frugal approach in hopes of fatter returns.

Wall St believes that as long as the rising tide lifts the luxury liner, the rest of the boats can founder.

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Serving the Banks

This about says it all:

“In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks,” he said.

Who said that? Only the incoming chair of the House Financial Services Committee, Rep. Spencer Bachus (R-AL).

He plans to spend his time in charge of that committee serving the banks. How do you think that’s going to work out for the average bank customer?

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