Happy Labor Day: Rich Get Richer; Working Families Get Attacked

September 2, 2011

To: Interested Parties
From: Californians for Retirement Security
Re: Happy Labor Day: Rich Get Richer; Working Families Get Attacked

So this is how our nation rings in a holiday meant to celebrate its workers. Job growth is stalled, fresh threats of recession spell more financial uncertainty for working families and CEOs are … getting rich. Really rich.

Corporate America has left the Great Recession far behind. The divide between the nation’s CEOs and public and private sector working Americans couldn’t be clearer and yet workers still are being targeted.

Reports the New York Times: “At least 25 top United States companies paid more to their chief executives in 2010 than they did to the federal government in taxes, according to a study released on Wednesday. The companies — which include household names like eBay, Boeing, General Electric and Verizon — averaged $1.9 billion each in profits.”

Here in California, misguided attacks on the retirement security of working men and women continue. Remember, the cost of pensions cannot legitimately be blamed for our budget woes. The state pays less today for pensions on a percentage basis than in 1980. The refusal of a small, politically entrenched faction to allow a vote on tax extensions this summer, along with the Wall Street abuses that left our nation’s economy in shambles, dwarf the impact of pension costs by a ratio of about 20 to 1.

Still, anti-public employee interests continue to cherry pick the tiny percentage of public employees making a respectable wage to attempt to illustrate that taxpayers are somehow being cheated. But in corporate America we aren’t talking about six figures. Or even a million bucks. We are talking billions. Don’t take our word for it. Take the word of one of the world’s richest men:

"My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice,” billionaire Warren Buffett wrote in the New York Times.  The Berkshire Hathaway Inc. chairman said his federal tax bill last year was $6,938,744. "That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income - and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent," he said.

A final thought about what our working class is facing on this Labor Day weekend from Northeastern University’s Andrew Sum: "I've never seen labor markets this weak in 35 years of research."

Wages and salaries accounted for just 1 percent of economic growth in the first 18 months after economists declared that the recession had ended in June 2009, according to Sum and other Northeastern researchers. Corporate profits, by contrast, accounted for an unprecedented 88 percent of economic growth during those first 18 months. (http://www.msnbc.msn.com/id/43860044/ns/business-stocks_and_economy/t/boom-corporate-profits-bust-jobs-wages/#.TmEEIY6d6xI)


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