The community-minded blog of mindchangingUSA is a nonprofit educational forum and advocates dedicated to reforming work, consumption, and electoral politics in America by educating a citizenship regarding its rights as voters, workers, and consumers.
For years, Walmart workers have attended the company’s annual shareholders meeting to call for higher wages, better benefits and more predictable schedules.
This year they’ll have someone new delivering the message on their behalf: Sen. Bernie Sanders.
The presidential candidate, who has repeatedly called on Walmart to improve its working conditions, is heading to Bentonville, Ark., on June 5 to introduce a shareholders’ proposal that would give hourly Walmart workers a seat on the company’s board.
“These workers need and deserve a seat at the table,” Sanders (I-Vt.) told The Washington Post. “If hourly workers at Walmart were well represented on its board, I doubt you would see the CEO of Walmart making over a thousand times more than its average worker.”
If passed, the measure would require the retailer to consider its 1.5 million hourly U.S. employees when nominating candidates to its board, which is currently companies of a dozen wealthy executives from companies like McDonald’s and NBCUniversal.
There are many questions Alison Green is asked as a columnist who writes about workplace issues. There was the woman who wanted to know if she should attend couple’s therapy with her boss and the boss’s boyfriend. (The boyfriend happened to be her father.) Another time she heard complaints about a janitor who cast a hex on her colleagues.
But Ms. Green was taken aback recently when asked about her salary, a topic so fraught even she couldn’t come up with a good answer. “No one has ever asked me that,” she said. “I don’t want to say.”
Many employees are loath to discuss their salaries, she said, worried it would cause resentment, or worse, among peers. “We are all so weird about telling people how much money we make, even me.”
Perhaps it is why, too, Ms. Green recently asked readers of her “Ask A Manager” website to share their job title, where they live and how much they make each year. Answers were anonymous; the data was compiled in a spreadsheet on Ms. Green’s website so people could sort through the data.
Within a half-hour, she had 1,000 responses. A day later, so many people posted their salaries her website froze. So far, three weeks later, she has more than 26,000 responses, everything from an accountant in Chicago who makes $90,000 to a librarian in Austin who earns $39,000. She was surprised by the overwhelming response: Previous surveys in 2014 and 2017 garnered a fraction of interest, fewer than 2,700 comments apiece.
Why the interest now? Attitudes about workers disclosing pay are shifting, for one, as unemployment has reached a five-decade low. And the gig economy has made salary comparing a near necessity for many. (How else does a person know what to charge if they are a freelancer?)
Uber’s public stock offering next month will make a bunch of people remarkably rich. Peter Ashlock is not one of them, although he has toiled for the ride-hailing company almost since the beginning.
Mr. Ashlock, who will be 71 next week, has racked up more than 25,000 trips as an Uber driver since 2012. His Nissan Altima has 218,000 miles on it — nearly the distance to the moon. His passengers rate him 4.93 out of five stars. His favorite review: “Dude drove like a cabdriver.”
While he is an integral part of Uber’s success, Mr. Ashlock is barely getting by. His 2018 tax return will show an adjusted gross income in the neighborhood of $40,000, better than 2016 and 2017. But he has maxed out his $3,200 credit limit at the local Midas car-repair shop and needs to come up with $5,000 to pay his taxes. He has Social Security but no savings to buy a new car that will let him keep working.
Silicon Valley has always been a lottery where immense wealth is secured by a few while everyone else must hope for better luck some other time. Rarely, however, has the disparity been on such stark display as with Uber. Its stock market value is expected to be about $100 billion, which would make it one of the richest Silicon Valley public offerings of all time.
Among those with something to celebrate: Uber’s founders, the Japanese conglomerate SoftBank, the elite venture capitalists Benchmark and Google’s GV, Saudi Arabia’s Public Investment Fund and the mutual fund giant Fidelity. Some have already cashed in. Travis Kalanick, Uber’s co-founder and chief executive until he was forced out after a series of scandals, reaped $1.4 billion by selling fewer than a third of his shares to private investors in 2017.
As independent contractors, drivers are not eligible for employee benefits like paid vacations or stock options. Uber said Thursday that it would offer bonuses of $100 to $10,000 to long-serving drivers. Its chief competitor, Lyft, did the same when it went public in March.
An attractive woman behind the wheel of a gray car says to the camera, “These days anyone can have a side hustle.” She then whisks off to the gym, for her other job as a personal trainer, beaming as she goes from one gig to another. This ad for the ride-share company Uber seeks to entice new drivers to join their ranks by using the “side hustle” come-on. The company isn’t alone.
Similarly laborious “side hustles” are celebrated in popular media and advertising, from self-help articles and other web content that exhort us to, say, work for a design studio part-time or sell CBD oil (great as a side hustle for moms, supposedly). Even pastors can use a side hustle, according to one evangelical blogger.
During tax season, you will also find filing suggestions for side hustlers. (Report all of your income! Deduct expenses!)
The truth is, working multiple gigs creates complications when you do your taxes. Compared with those with salaried jobs, who pay their taxes seamlessly through withholding, for side hustlers “the process will be a lot messier,” according to Steven Dean, the faculty director of the Graduate Tax Program at New York University Law School. You have to estimate and pay taxes on your own, he notes, and your expenses may not be reimbursed by your employer. In other words, paying quarterly tax estimates gives workers with side hustles yet another side hustle — being their own accountant, although this gig doesn’t even pay.
Nevertheless, this nouveau moonlighting continues to be exalted as cool, empowering or freeing. This mantra is false: Side hustles are not simply a new version of working as a “wage slave” so that we can do what we love in our off hours. Instead, far more often, people take on second or third side hustles because of wage stagnation or low pay at their full-time jobs.
Over the past few years, many economic indicators have returned to where they were before the Great Recession — among them, the unemployment rate, which has dropped below the 5 percent mark of 2007, housing prices and the stock market, which has nearly doubled its pre-recession peak.
Another, buoyed by rising stock prices: the enormous pay difference between CEOs of the largest U.S. companies and their employees, who earn more than 300 times less than those at the top, according to new data.
Here’s a closer look at the issue.
How has CEO compensation changed?
In 2000, the average CEO was paid 343 times more than the average worker, according to the liberal-leaning Economic Policy Institute. That number dropped to about 188-to-1 in 2009.
It has since rebounded to 312-to-1 last year, according to a report from the Economic Policy Institute.
From 2016 to 2017, the average pay of CEOs from the top 350 publicly traded firms increased 17.6 percent — to $18.9 million — even after being adjusted for inflation, the group found.
How to close the gap
The reason for the pay disparity between CEOs and employees is relatively simple. Closing the gap is much more complex.
A number of methods have been proposed to close the gap, including a cap on compensation, clawbacks for poor performance or executive misconduct, and, as mentioned previously, mandatory publishing of CEOs’ salaries.
James Galbraith, the director of the University of Texas Inequality Project who also served as an adviser to Sen. Bernie Sanders’ presidential campaign, said U.S. companies should look to other countries where laws encourage business leaders to reinvest in their tangible products instead of their stocks.
It’s a loaded, deeply personal and often uncomfortable question. Along with our weight and age, our salary is a number to which we’ve assigned almost incomparable value.
And, when we’re asked, what many of us really hear is this: What’s your worth as a person?
“Money is so tied up with really complex and difficult emotions, like shame, success, fear of failure and how people view you,” said Brianna McGurran, a money expert at the personal finance blog NerdWallet. “So when you’re talking about how much you earn, or how much you’re saving, a lot of people end up tying that to their self-worth.”
She added: “Salary is so close to our identity. It’s the core part of all of this.”
That money — along with sex, politics and religion — is a topic best avoided in polite conversation is a cultural concept many of us are raised on, and taboos around discussing income can be particularly sensitive.
Rising prices have erased U.S. workers’ meager wage gains, the latest sign strong economic growth has not translated into greater prosperity for the middle class and working class.
Cost of living was up 2.9 percent from July 2017 to July 2018, the Labor Department reported Friday, an inflation rate that outstripped a 2.7 percent increase in wages over the same period. The average U.S. “real wage,” a federal measure of pay that takes inflation into account, fell to $10.76 an hour last month, 2 cents down from where it was a year ago.
The lack of raises have befuddled economists and policymakers, who hoped that after job openings hit record highs and the unemployment rate dipped to the lowest level in decades, employers would give beefy raises to attract and retain employees. But so far, gains have been slight, and small recent increases are now being eclipsed by rising prices.
Inflation hit a six-year high this summer, driven in part by a jump in energy costs. The price of a gallon of gas has increased 50 cents in the past year, up to a national average of $2.87, according to AAA. Some analysts expect the climb in energy prices to halt soon, which should bring the overall inflation rate down and possibly lift real wages slightly.
Consumers are also paying more for housing, health care and car insurance, the federal government reported Friday. Additional price hikes could be coming as President Trump’s new tariffs boost prices of cheap imported products U.S. consumers rely on. And many economists warn that growth might have peaked for this expansion.
Some of the biggest winners from President Donald Trump’s new tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, a practice that rewards shareholders by boosting the value of existing shares.
A POLITICO review of data disclosed in Securities and Exchange Commission filings shows the executives, who often receive most of their compensation in stock, have been profiting handsomely by selling shares since Trump signed the law on Dec. 22 and slashed corporate tax rates to 21 percent. That trend is likely to increase, as Wall Street analysts expect buyback activity to accelerate in the coming weeks.
“It is going to be a parade of eye-popping numbers,” said Pat McGurn, the head of strategic research and analysis at Institutional Shareholder Services, a shareholder advisory firm.
That could undercut the political messaging value of the tax cuts in the Republican campaign to maintain control of Congress in the midterm elections.
The SEC requires company executives to disclose share purchases or sales within two business days. Companies emphasize that their executives’ share sales are often scheduled at regular intervals well in advance. In Banga’s case, he has routinely sold shares once a year, and always in May, since 2013…
Yet the insider sales feed the narrative that corporate tax cuts enrich executives in the short term while yielding less clear long-term benefits for workers and the broader economy. Critics of insider sales argue that they diminish the value of paying C-suite employees in shares — a practice that’s intended to give them a greater stake in the long-term health of the company — and can even raise questions about the motivation for the buybacks themselves.
Following the tax cuts, roughly 28 percent of companies in the S&P 500 mentioned plans to return some of their tax savings to shareholders, according to Morgan Stanley. Public companies announced more than $600 billion in buybacks in the first half of this year — already toppling the previous annual record.
Year to date, buybacks have doubled from the same period a year ago, Merrill Lynch said in a July 24 report, citing its clients’ trading activity. “Last week we noted that buyback activity [was] poised to accelerate over the next six weeks, and indeed, corporate clients’ buybacks picked up to a two-month high and the 6th-highest level in our data history,” the company said.
Prominent Democrats — stung by their eroding support from working-class voters but buoyed by the deficit-be-damned approach of ruling Republicans — are embracing a big idea from a bygone era: guaranteed employment.
The “job guarantee” plans, many of them pressed by Democratic White House hopefuls, vary in scope and cost, but they all center on government-sponsored employment that pays well above the $7.25-an-hour federal minimum wage — a New Deal for a new age, absent the bread lines and unemployment rates of the Great Depression. The most aggressive plans seek to all but eradicate unemployment and to set a new wage floor for all working Americans, pressuring private employers to raise wages if they want to compete for workers.
How such guarantees would be paid for is still largely unresolved. And criticism of the idea has emerged not only from conservatives who detect a whiff of socialism but also from liberals who say guaranteed employment is the wrong way to attack the central issue facing workers in this low-unemployment economy: stagnant wages.
But Democratic leaders hope the push will help their party bridge the growing political divide between white and minority workers, and silence the naysayers who accuse the party of being devoid of new, big ideas.
The employment plans, along with single-payer “Medicare for all” health care, free college, legalized marijuana and ever less restrictive immigration rules, are parts of a broader trend toward a more liberal Democratic Party in the Trump era.
“It’s going to create a more competitive labor market where people are going to start getting living wages, not just minimum wage,” said Senator Cory Booker, Democrat of New Jersey, who unveiled a job-guarantee planin April. “Giving people the dignity of work, of being able to stand on their own two feet, there’s such a strengthening element of that.”
Anyone with a cellphone should have paid attention to the big merger news on April 29: T-Mobile and Sprint announced their intention to tie the knot after years of speculation. If it goes through, it will leave the country with just three major wireless carriers instead of four.
Less noticed, on the same day, about a dozen other corporate marriages were announced worldwide, worth a combined $120 billion. So far this year, $1.7 trillion worth of deals have been declared globally, higher than the pre-financial-crisis record set in 2007. This year’s big-dollar mergers in the United States range from Cigna’s purchase of Express Scripts, oil refiner Marathon Petroleum buying rival Andeavor, and Dr Pepper Snapple cozying up to Keurig Green Mountain. That’s in addition to AT&T’s play for Time Warner in 2016, CVS’s offer for Aetna, and Amazon swallowing up Whole Foods.
All this activity means fewer companies, which means less competition. For consumers, that can raise prices if the merged companies face less pressure to keep things cheap. That’s the main test these deals have to pass: whether regulators, including the Justice Department and Federal Trade Commission, think consumers will fare worse.
That narrow focus on consumer prices hides another, potentially more dangerous side effect. A growing body of evidence has found that as mergers thin the ranks of businesses, workers have fewer options when they look for jobs. That reduces their bargaining power and, in turn, is part of why wages have stagnated.