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Wealth Gaps Between Racial Groups Jump as All Groups Lose Wealth

Laura Clawson for Daily Kos Labor

We tend to talk less about wealth than income, but wealth is a crucial part of economic well-being. That's especially true in a recession and housing collapse: Do you have savings to get you through a period of unemployment? Does a house that's lost a huge part of its value represent your only significant asset?

Wealth is also an area where we see especially large racial gaps, between whites and blacks in particular. (For extensive background on this, see Black Wealth/White Wealth, by Melvin Oliver and Thomas Shapiro, and Being Black, Living in the Red, by Dalton Conley.) And the recession has exacerbated wealth gaps between races, as a Pew analysis of newly available 2009 data shows:

The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.

As a result of these declines, the typical black household had just $5,677 in wealth (assets minus debts) in 2009; the typical Hispanic household had $6,325 in wealth; and the typical white household had $113,149.

In addition to the decreased median, many more households now have zero or negative net worth:

Overall, 20% of U.S. households were in this position in 2009, up from 15% in 2005. The share of households with zero or negative net worth is much higher among Hispanics and blacks. About one-third of Hispanics (31%) and blacks (35%) had no wealth or were in debt in 2009, compared with 15% of whites.

The increase in the share of households with zero or negative net worth from 2005 to 2009 was greatest among minority households. It increased from 23% to 31% for Hispanics, from 12% to 19% for Asians, and from 29% to 35% for blacks. The change was more modest for white households, with the share climbing from 11% to 15%.

Non-white households are more dependent on their homes as a source of wealth, and Hispanic and Asian households were hit particularly hard by the housing collapse for geographic reasons:

In 2005, more than two-in-five of the nation’s Hispanic and Asian households resided in Arizona, California, Florida, Michigan and Nevada, the five states with the steepest declines in home prices. By contrast, only about one-in-five of the nation’s white or black households resided in these states.

Pew offers much, much more in the way of statistics showing both how badly median wealth has declined overall and the enormous racial disparities in household wealth and in the effects of the recession on the household wealth of different racial groups. The declining median income we saw in yesterday's Census report is a factor in declining wealth, of course, since it's a lot harder to save money or buy a home if your income is going down. But declines in wealth are about more than that—they represent people losing what they had, whether due to unemployment, the housing market in their area crashing, the stock market on which their retirement accounts depended crashing, or other economic factors beyond their control.

 

Auto Workers Release Details of General Motors Contract

by Laura Clawson, Daily Kos Labor

The United Auto Workers announced details of its tentative contract agreement with GM today:

The offers a $5,000 signing bonus; a modest pay increase -- $3 an hour over four years -- for entry-level workers hired after September 2007, and a change in profit-sharing, based on North American results, not just those for the U.S.

The entry-level workers currently made between $14 and $16 an hour.

“Getting that wage up over $19 an hour was very important to us," Ashton said. Second-tier workers now also have unlimited doctor visits and other health-care improvements, he said. “We’re proud of what we did for the entry level. They deserve it, and we’re going to try to do more.”

Workers at the higher pay tier will not receive annual pay raises, but profit-sharing willamount to a minimum of $3,500 next year; the deal also "adds or retains 6,400 workers," and GM is offering significant early retirement payments.

More than 48,000 GM workers will vote on whether to accept the deal.

 

 

 

Trade Deficit with China Up - What Obama and Congress Must Do to Respond

From the Alliance for American Manufacturing

The U.S. trade deficit with China rose again in July; the overall gap narrowed.

•    The U.S. international trade deficit in goods and services decreased to $44.8 billion in July from $51.6 billion (revised) in June. 
•    The goods deficit with China increased from $26.7 billion in June to $27.0 billion in July.

Said Scott Paul, Executive Director of the Alliance for American Manufacturing:

"The trade deficit with China is growing and shows no signs of abating. But the real question is, will Congress and the Administration do anything about it? The trade deficit is more than a statistic. It represents jobs, income, and know-how leaving America. And it is another bill our children will have to pay someday. 

"If China were out-competing America, I’d say we only need to focus on getting our own house in order. But the truth is, China’s gains come largely from its undervalued currency, state-owned enterprises, and heavy industrial subsidies. Shame on China for its mercantilism and protectionism, but the real shame is on us for not doing anything to stop it.

"There are concrete steps the Administration and Congress could take right now to lower this trade deficit. Congress should immediately pass the bipartisan and wildly popular Currency Reform for Fair Trade Act (H.R. 639) to counter China’s currency manipulation. The Peterson Institute on International Economics estimates that the Yuan is more undervalued today (28.5 percent) than it was a year ago (24.2 percent), so the need is even more urgent today.

"For its part, the Administration could convene a multilateral meeting to address global imbalances and in particular Chinese mercantilism. If China doesn't agree to participate, designate it a currency manipulator this October. The Obama Administration has had the opportunity to cite China for its currency peg five times, but has failed to do so each time, despite near unanimous agreement that Beijing deliberately undervalues its currency. A failure by the Administration to designate China a currency manipulator this year, given American job loss and our skyrocketing trade deficit, would be indefensible. 

"Given a level playing field, our manufacturers can successfully compete and create good jobs. But the field is still dramatically tilted away from us, and towards China."

 

Occupy Wall Street protest, in Photos and Video

by Chris Bowers, Daily Kos

(Twitpic/@nykcsa)

For the past three days, a lively, determined protest against corporate and Wall Street power has been unfolding around the financial district in lower Manhattan. After starting on Saturday with a large rally that numbered many thousands, the demonstration will continue indefinitely as several hundred protesters occupy nearby sidewalks, entrances to buildings and parks in an attempt to disrupt normal business. Reuters:

Protesters complaining about the unchecked power of the financial industry staged noisy demonstrations that slowed pedestrian traffic on Wall Street for a third day on Monday, vowing to continue "for as long as it takes" to achieve vague demands.

The protests were organized by a different set of groups than the more typical, and more establishment, set of progressive organizations that worked on the August jobs protests:

The protests, dubbed Occupy Wall Street, were organized through Twitter, the magazine web site Adbusters and under the banner of "Anonymous" at various sites online, and were planned for several other cities around the world we well.

Daily Kos community members such as UnaSpenser, Tay and TBug have extensively chronicled the events and ways to get involved. You should check out what they have written.

What follows is a video and a series of pictures of the protest. When you see them, rather than wringing your hands about the perceived lack of media coverage of left-wing protests such as these relative to tea party events, please keep two points in mind:

1. This protest actually is getting a lot of media, as a glance at Google News will quickly indicate.
2. The more you keep talking about an event, the more likely it is to receive even more media coverage. So if this is something you support, just keep blogging, tweeting and talking about it anywhere you can.

Left-wing protests are getting some notice, and pushing to make them bigger feels better than complaining about being ignored:

(yfrog/MKONDARRETA)

(yfrog/fiascostreeteam)

(twitpic/@barbarellany)

(twitpic/@BiellaColeman)

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The Progress Report - Sept 19 - What if the Tea Party Wins?

By Ian Millhiser 

This material was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.

This weekend, the Constitution celebrated its 224th birthday. Yet, despite the fact that our founding document has served America well for more than two centuries, the Tea Party now wants to cast its principles aside and replace them with a radical anti-government manifesto. Despite the fact that the Constitution has been amended many times to make America more democratic and more responsive to We the People, the Tea Party believes that we have an authoritarian constitution that prohibits everything they disdain and requires nearly everything that they support.

THE END OF SOCIAL SECURITY AND MEDICARE: Last April, the House GOP voted almost unanimously to phase out Medicare and shift crippling medical costs onto seniors and their families. Yet this slow death of Medicare appears downright moderate compared to the Tea Party agenda of simply declaring our entire safety net for America’s seniors unconstitutional. Texas Gov. Rick Perry (R) claims Medicare and Social Security “contradict the principles of limited, constitutional government that our founders established to protect us.” Sen. Mike Lee (R-UT) mocked President Franklin Delano Roosevelt for calling upon the federal government to provide “a decent retirement plan” and “health care” because “the Constitution doesn’t give Congress any of those powers.” Rep. Bob Goodlatte (R-VA), who engineered the House of Representatives’ dramatic reading of the Constitution earlier this year, claimed that Medicare and Social Security are “not in the Constitution” and are only allowed to exist because “the courts have stretched the Constitution to say it’s in the general welfare clause.” And Sen. Tom Coburn (R-OK) believes that Medicare is “a family responsibility, not a government responsibility.”

Private Contractors Cost More Than Federal Workers in 33 of 35 Cases, Study Finds

Laura Clawson for Daily Kos Labor

A new study by the Project on Government Oversight (POGO) finds that those overpaid federal government workers we hear so much about actually save the government money compared with private contractors doing the same work:

POGO’s study analyzed the total compensation paid to federal and private sector employees, and annual billing rates for contractor employees across 35 occupational classifications covering over 550 service activities. Our findings were shocking—POGO estimates the government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services. Specifically, POGO’s study shows that the federal government approves service contract billing rates—deemed fair and reasonable—that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services.

Additional key findings include:

• Federal government employees were less expensive than contractors in 33 of the 35occupational classifications POGO reviewed.
• In one instance, contractor billing rates were nearly 5 times more than the full compensation paid to federal employees performing comparable services.
• Private sector compensation was lower than contractor billing rates in all 35occupational classifications we reviewed.
• The federal government has failed to determine how much money it saves or wastes by outsourcing, insourcing, or retaining services, and has no system for doing so.

In fact, in many of the occupational classifications, federal compensation rates are not just lower than contractor rates but are lower than private sector ones. Naturally, the Heritage Foundation isn't letting this get in the way of some cherished beliefs:

James Sherk, a policy analyst with the Heritage Foundation and the author of [Heritage's] federal salary study, said he was skeptical of the POGO findings. “It’s not a real apples to apples comparison,” he said. “When the federal government hires contractors, it’s for the short-term. When they hire for the public sector, they are on the hook for the salaries and compensation for years.”

[POGO General Counsel] Mr. Amey counters that the government usually pays contractors for multiple-year jobs, not just short term.

Doubtless there are cases where using an expensive contractor is necessary—for instance, if the government needs highly specialized legal expertise it may make more sense to pay a high rate to an outside lawyer for a time rather than keeping such a lawyer permanently on staff. But cemetery administration services? Security guards? Government jobs should offer decent middle-class wages, but the rates private contractors draw for the same work, often double or more that of federal workers, deserve another look in the right's rush to privatize government functions.

 

Auto Workers and General Motors Reach Tentative Contract Agreement

by Laura Clawson for Daily Kos Labor

The UAW and General Motors have reached a tentative agreement on a new contract. Details of the deal will be released Tuesday morning, but:

According to people familiar with the deal, it offers a $5,000 signing bonus, a modest pay increase—$3 an hour over four years—for lower-wage workers hired after September 2007 and a change in profit-sharing, based on North American results, not just those for the U.S. GM also is said to have agreed to add thousands of jobs and reopen the Saturn plant in Spring Hill, Tenn.

"I'm willing to take a chance on profit-sharing, because it's better than nothing," said Andy Bohner, who works at GM's Flint truck assembly plant. "But," he noted, "I'd rather see a straight performance bonus," which represented a certain percentage of annual wages in years past.

Workers will vote to accept or reject the contract in the next 10 days. Due to a no-strike agreement made as part of the government helping the auto companies avert bankruptcy in 2009, if there is no agreement on a contract, it will go to binding arbitration.

According to a UAW statement:

"When GM was struggling, our members shared in the sacrifice. Now that the company is posting profits again, our members want to share in the success. To be clear, GM is prosperous because of its workers. It's the workers and the quality of the work they do, along with the sacrifices they made, that have returned this company to profitability," said UAW Vice President Joe Ashton, who directs the union's General Motors Department. "The wages and benefits we negotiated in this tentative agreement reflect the fact that it was UAW members who helped turn this company around.

The GM agreement is expected to be used as the basis for agreements with Chrysler and Ford. Since Ford is not part of the 2009 deal, its workers could strike and negotiations are expected to go more slowly, so Chrysler is likely to follow the GM deal.

 

 

 

Kaiser Faces 23,000 RN's, Operating Engineers & Other Staff Walking Off Job

This week, 2,000 Local 39 Stationary Engineers joined 17,000 RNs with the California Nurses Association to announce they will sympathy strike with 4,000 NUHW healthcare workers at Kaiser Permanente.

The Kaiser NUHW members, who include RNs, optical workers, and mental health professionals across California, are protesting Kaiser’s unfair labor practices and its refusal to bargain in good faith. 

Despite Kaiser’s robust profits ($5.7 billion in the past 2.5 years) and its warm-and-fuzzy $1.3 billion advertising campaign about improving the public’s health, Kaiser has refused to accept caregivers’ reasonable bargaining proposals aimed at addressing serious short-staffing and patient-care issues.

Kaiser’s executives, who enjoy multi-million dollar salaries and up to eight pensions apiece, are also insisting on eliminating workers’ defined-benefit pensions and retiree health coverage as well as cutting their health benefits. 

On Monday, the International Union of Operating Engineers, Stationary Engineers, Local 39 officially notified Kaiser Permanente of its intent to honor next week’s statewide strike by the National Union of Healthcare Workers (NUHW). Altogether, 23,000 Kaiser workers now plan to participate in the walk-out on September 22nd. 

Read the Stationary Engineers’ letter to Kaiser.

Facing Major Health and Safety Threats, Amazon’s Warehouse Workers Need a Union

by Mark E Andersen, Daily Kos Labor

When it comes to Amazon's respect for its workers' safety, let's start here:

[…] a warehouse employee contacted the Occupational Safety and Health Administration on June 2 to report that the heat index in the warehouse had reached 102 degrees, and that 15 workers had collapsed. The employee also said workers who were sent home because of the heat received disciplinary points.

At what point does a company think they have a problem? Now, I am not expecting a warehouse to be air-conditioned to a comfortable 75 degrees. But 102? That is acceptable? Even when I was in the Army, work stopped on post when heat and humidity combined to a certain level.

The Morning Call, a daily newspaper in Allentown, Pa., delivered a grim picture last weekend about what it is like to work in the local Amazon warehouse, sorting material for delivery to millions of eager customers. In eastern Pennsylvania, like just about everywhere else, jobs are lacking, and Amazon is one of the few places that is hiring. Many workers are brought on by a staffing company as temporary workers ("Are you interested in working in a fun, fast-paced atmosphere earning up to $12.25 per hour?" the ad asks.) This transient status gives them little incentive to complain, even as the heat boiled upward over the summer. The result was an environment that, one employee told the paper, resembled "working in a convection oven while blow-drying your hair."

House Passes Anti-NLRB Outsourcers' Bill of Rights

by Laura Clawson for Daily Kos Labor

As expected, the House passed the bill Democrats have dubbed the "Outsourcers' Bill of Rights" Thursday. The bill strips the National Labor Relations Board's power to remedy it when companies move jobs illegally due to workers exercising their rights. The vote was 238 to 186, with eight Democrats and seven Republicans crossing party lines. Although the bill was spurred by the NLRB's complaint against Boeing, Boeing has declined to endorse the bill.

Speaking on the House floor, Rep. George Miller (D-CA) said:

Mr. Speaker, workers have had the right to organize since 1935.  They have the right to join together and fight for a better future for themselves and their families. And it has been the law of the land that employers cannot retaliate against workers for exercising that right.

Employers cannot fire workers for exercising that right. They cannot subcontract or outsource work just because workers exercise that right. If they do, workers have a right to redress.

For more than 70 years, the National Labor Relations Board has taken issue with that kind of retaliation. If employers are proven to have retaliated against workers for exercising the right to organize, the Board is empowered to make workers whole.

But not under this bill.  

Under this bill, workers would not be able to be made whole anymore.

Under this bill, a company can retaliate against a worker for trying to organize a union. The employer could layoff that worker and subcontract their work out.

A company can bust a union by setting up a shell company down the street and send all the work there until all of the union employees have lost their jobs. Workers would be out of luck because the NLRB would be prohibited from ordering the work returned to those now-unemployed workers.

Under this bill, if a company wants to bust a union by outsourcing its work to China, this bill permits it. Workers would be powerless to stop that outsourcing.

But then, that's what Republicans want.

Harry Reid does not plan to bring the bill to a vote in the Senate.

 

 

 

Seattle City Council Passes Paid Sick Leave

Laura Clawson for Daily Kos Labor

Joining San Francisco, Washington, D.C. and Connecticut, Seattle's City Council passed a paid sick leave requirement:

The bill exempts businesses with fewer than five employees and new businesses during their first two years of operation. Businesses with five to 49 employees must provide a minimum of five paid sick days. Companies with 50 to 249 employees must provide seven, and those with more than 250 workers must provide nine paid days off.

The legislation takes effect September 2012. The council also ordered a review of the bill after it's been in place for a year.

Paid sick leave is important in so many ways. When we're sick, we should have the right to stay home without losing the ability to pay bills, or possibly losing a job. It's really that simple. But it's also a public health issue—if people go to work sick, they spread what they're sick with to their coworkers and customers. We're all better off if the flu stays home.

The usual suspects—the local Chamber of Commerce, a business consultant, etc.—issued dire warnings about creating a poor business environment. Apparently they think that having disease spreading through the workforce doesn't affect productivity and profitability.

Mayor Mike McGinn issued a statement saying:

"Paid Sick Leave levels the playing field in Seattle by supporting public health and economic justice. Seattle residents shouldn't have to choose between staying home sick and keeping their job. [...] I thank Councilmember Nick Licata for his leadership and the Council for passing this ordinance."

 

Labor Endorses Sen. Merkley Plan for Jobs Focus in Super Congress

by Joan McCarter, Daily Kos

Sen. Jeff Merkley is steadily gaining support for his proposal that the Super Congress agree to having their proposals evaluated by the CBO for their job-creating or job-killing impact. Today, he got the endorsement of top labor leaders.

AFL-CIO president Richard Trumka and AFSCME chief Gerald McEntee are now joining the call for the supercommittee, and members of Congress in general, to embrace Merkley’s plan. It would require that the supercommittee submit its individual proposals to the non-partisan Congressional Budget Office for an evaluation of the impact they would have on unemployment and the labor market.

The idea is to get supercommittee members to at least think about how its proposals would impact jobs, and require them to submit their conclusions along those lines to an independent analysis.[...]

AFL-CIO sends over this statement from Trumka:

"Senator Merkley's plan is the kind of common sense initiative that is too rare in Congress. We are in the middle of a jobs crisis and the last thing we should be doing is passing legislation that kills jobs. Senator Merkley's amendment would help the Super Committee avoid proposals that kill jobs. We strongly urge all elected representatives of both parties to support this effort."

And AFSCME sends over this statement from McEntee:

"As the Super Committee embraces their charge to reduce the deficit by more than a trillion dollars, we urge them to embrace Senator Merkley's proposal to report the jobs impact of their decisions. The Super Committee should focus on doing what's right and get our country back to work. No more political gamesmanship that leaves struggling families out in the cold yet again. Investing in job creation is the surest path to an economic recovery that works for everyone, not just CEOs and huge corporations. Congress must put aside political differences and begin the real work of the nation."

Given the Republican strategy on jobs, as illustrated here,

Thousands of jobs created per month in 2011 (data source)

Republican support for the plan seems unlikely. Never mind that it's a smart but small and absolutely common sense idea. Here's another simple and critical way, though, in which Democrats can differentiate themselves from Republicans. If every Democrat from President Obama on down endorsed the idea in the fact of Republican opposition, it would just prove again that Republicans don't really want to create jobs.

 

Locked Out American Crystal Sugar Workers Launch QR Campaign

by Laura Clawson for Daily Kos Labor

American Crystal Sugar has locked out 1,300 workers after they rejected its contract offer by a nine to one margin. Now, the workers, members of the Bakery, Confectionery Tobacco Workers and Grain Millers union,

[...] have launched the first-known union quick response (QR) code campaign to educate consumers and the general public about the lockout. This week, the workers will hand out fliers with the code in major cities in Minnesota, North Dakota and Iowa, the states where they are locked out.

The QR code takes you to a website featuring the video above. During the lockout, the company has hired replacement workers:

Fires occurred last week at the Drayton and East Grand Forks plants, which Riskey said are due to an untrained workforce.

“When you put poorly trained replacement workers into these facilities, preventable accidents can and will happen,” he said. “By using poorly trained replacement workers from outside the region, American Crystal Sugar is gambling both with safety and the economic success of this year’s harvest.

 

Union Contract Negotiations with Auto Manufacturers Continue as Contracts Extended

 by Laura Clawson for Daily Kos Labor

The UAW's contracts with GM and Chrysler were extended Wednesday night to allow negotiations to continue past a deadline; as part of the 2009 government bailout of the auto industry, workers agreed not to strike, so if a contract agreement cannot be reached, they will go to binding arbitration. The UAW's contract with Ford was extended earlier for the same reasons.

The UAW vice president in charge of negotiations with GM sent an optimistic message Wednesday, but the details of what is currently under negotiation are not publicly known. The broad outlines, though, have been in place for some time:

A major theme for the union during these talks has been regaining much of what workers gave up to keep their employers from collapsing under the weight of heavy debt and plummeting sales. But the union also wants to add jobs in the United States after suffering years of wrenching cutbacks at the three carmakers.

Mr. King, the U.A.W. president, has said U.A.W. members each ceded $7,000 to $30,000 worth of pay and benefits since 2005. In 2007, the union agreed to create a two-tier wage system that allowed the carmakers to cut costs by hiring new workers at about half the pay of other workers.

The auto companies want to reduce labor costs. Currently, only around 4,000 workers are at the lower tier of wages. At $14 per hour, those jobs pay well enough to be considered good jobs these days, but they are surely not the basis for the rebuilding of the American middle class that auto and other manufacturing jobs did so much to build in past generations.

At Ford, workers have filed an "inequality of sacrifice" grievance after the company "reinstated merit pay raises and 401(k) matches for salaried workers, but not hourly workers."

 

The State of Our Nation's Bridges

From Transportation for America.

Despite billions of dollars in federal, state and local funds directed toward the maintenance of existing bridges, 69,223 bridges — 11.5 percent of total highway bridges in the U.S. — are classified as "structurally deficient," requiring significant maintenance, rehabilitation or replacement.

Two key problems persist: while Congress has repeatedly declared bridge safety a national priority, existing federal programs don't ensure that aging bridges actually get fixed; and the current level of investment is nowhere near what is needed to keep up with our rapidly growing backlog of aging bridges.

Learn More About Our Bridge Backlog

Did you know that states can transfer up to half of their federal money dedicated to bridge repair to other projects, no questions asked? Learn more about our bridges — and what we can do to start fixing them.

Click for more details about the data.

The full national report includes the full battery of data, including the worst 100 counties and the busiest 2 structurally deficient bridges in each state.