It’s enough to make you reach for your blood pressure medications. The PhRMA giant Pfizer has been pocketing “yuge” tax breaks, only to raise drug prices, cut back essential research, lay off workers, and raise its CEO’s salary to stratospheric heights.
Tax Windfall, Price Hikes. With an $11 billion windfall from President Trump’s tax cuts, Pfizer reported $12.27 billion fourth quarter profits last year.
- These eye-popping profits came after Pfizer raised prices on 20 drugs by almost 10 percent, including Pristiq, Lipitor, and Zoloft, which are available as generics.
- Earlier in the year, Pfizer jacked up prices for another 91 drugs by an average of 20 percent.
Cutting Back Research, Laying Off Workers. Meanwhile, Pfizer is ending its research programs for new medications for Alzheimer’s disease and Parkinson’s disease.
- The PhRMA giant is laying off 300 employees in Cambridge and Andover, Massachusetts, and Groton, Connecticut.
CEO Gets 61% Pay Raise. But it isn’t all layoffs and long faces at Pfizer. Chairman and CEO Ian Read is getting a 61 percent pay raise to $27.9 million. His pay package includes:
- A base salary of $1.96 million;
- A $2.6 million bonus;
- $13.1 million in equity awards;
- And an $8 million special equity award.
Can’t Afford to Lose Him. At a time when older workers are being discarded and younger workers suffer from “no-compete” contracts, Read, who is 65, is benefiting from both.
- Pfizer’s board approved Read’s lavish pay package to offer him a “compelling incentive” not to retire.
- As part of the deal, he agreed not to work for a competitor for two years after eventually retiring.
Inspired by West Virginia teachers’ successful strike, educators around the country are taking a stand for the raises, resources, and respect that they need. These teachers—and the communities they serve—are coping with the consequences of trickle-down tax cuts that are shortchanging their schools and students.
Statewide Actions. In Arizona, teachers held a statewide day of action on Wednesday, March 28, including a late-afternoon rally at the state capitol in Phoenix, to protest low teacher pay and school funding.
- In Oklahoma, in response to educators’ protests, the state House of Representatives approved a $447 million tax increase to fund pay raises for teachers, school support staff, and state employees.
- The measure—which now needs the state Senate’s approval—provides first-year teachers with a $5,000 pay raise, along with future increases based on experience.
Irresponsible Tax Cuts Shortchange Schools and Students. As the Center on Budget and Policy Priorities reports, the protests in Arizona and Oklahoma were prompted by “excessive state tax cuts that have shrunk state revenues and thereby made it harder to devote adequate resources to education.”
- Arizona’s schools are the nation’s second-worst-funded schools, and Oklahoma’s are the fifth-least adequately funded.
- Both states passed huge tax cuts before the Great Recession that tilted toward big business and the rich. And then they cut taxes even more.
- Arizona cut corporate taxes by 30 percent in 2011 and also reduced taxes on capital gains.
- In 2004, Oklahoma cut the top income tax rate, with the last reduction taking effect in 2016, in spite of a $1 billion state revenue shortfall. The energy-rich state also substantially cut its taxes on oil and gas companies.
As a PhD student and graduate employee at the University of Connecticut, Cera Fisher was on her way to a successful career. But she and her colleagues were having a hard time making ends meet. Their stipends were swallowed up by fees; their healthcare was cut back; and they were required to teach more courses without extra pay. “We felt they [the administration] could change our conditions on a whim,” she recalls.
“Norma Rae Moment.” In what Fisher calls their “Norma Rae moment,” more than 2,100 research and teaching assistants organized with the UAW and won improved pay, healthcare, and fee policies.
- They’re among tens of thousands of “millennials”—America’s largest living generation, aged 22 to 37, who account for three-quarters of unions’ membership gains.
- Young people are joining together across the economy from academia and digital media to fast-food restaurants and retail outlets.
- Millennials’ energy, ideas, and numbers are needed more than ever now that unions are besieged by a Supreme Court case to weaken public service employees, “right-to-work” laws that cost workers $6,109 a year, and the Trump administration’s attacks on job safety, overtime protections, retirement security, and other crucial issues.
Historic Support for Unions. Americans are supporting unions in record numbers, and young people are leading the way.
- Sixty-one percent of all Americans hold favorable views of unions—the highest approval in a decade-and-a-half.
- Among Americans under 30, unions’ approval ratings are soaring to 76 percent.
Security in an Uncertain Economy. Having come of age during the financial crisis and the recent recession, millennials are joining and organizing unions in order to gain strength and security in an uncertain economy. As we have previously reported, younger workers face numerous challenges, including:
- The part-timing of jobs;
- Stagnant wages;
- Unpaid internships;
- Contract work;
- Shrinking healthcare coverage and vanishing pension plans; and
- “Noncompete” clauses that make it more difficult to move to better jobs.
It isn’t easy cleaning cluttered aircraft at a busy metropolitan airport. But now, Gertrudes Lopez-Ortiz, a cabin cleaner at Newark Liberty International Airport, is getting a well-deserved, long-overdue raise. “Now is a dream come true for me and my co-workers,” she said. “I was here when the Port [Authority of New York and New Jersey] originally promised this in 2014.”
Robust Increases in a “Raise-Less” Economy. Lopez-Ortiz is one of 40,000 cabin cleaners, restaurant staff, and other low-wage workers at New York’s three major airports who are getting substantial pay increases. That’s all too rare these days, especially for workers like these who are employed by contractors and subcontractors for airlines, terminal operators, and concessions.
- These workers will get raises every year through 2023, when they’ll be paid at least $19 an hour.
- The raises will lift salaries at these airports to $35,000 a year. For the lowest-paid workers, that’s an average annual increase of 13.5 percent.
- Currently, typical wages at Newark International Airport are $10.45-an-hour. In New York, which enacted a state minimum wage in 2016, typical wages at JFK International and LaGuardia airports are $13 an hour.
Bargaining, not Begging. Having organized with SEIU (Service Employees International Union), about half of the workers at these airports negotiated their first contract in 2016, with health and safety protections, fairer scheduling and disciplinary provisions, and recognition for years of service.
- Fighting for their raises, these workers kept attending meetings of the Port Authority of New York and New Jersey. They testified about how hard it is to feed their families, pay rent, and afford basic healthcare while living on low wages.
Elections Matter. While New York’s Democratic Governor Andrew Cuomo supported pay raises, New Jersey’s Republican former Governor Chris Christie was a roadblock. Soon after newly elected Democrat Phil Murphy took office in January, the raises were approved.
Three months after President Trump signed the Republican tax law, how’s it working out for you? It all depends on whether you work on Wall Street—which got $1 trillion in tax breaks for big business and the wealthy—or in Wisconsin, where working people are facing plant closings and pink slips.
Two lawmakers from Wisconsin stand on two sides of the debate. Republican House Speaker Paul Ryan insists, “This gets us better wages, bigger paychecks.” But Democratic Senator Tammy Baldwin is cracking down on stock buybacks which swell CEOs’ stock portfolios while squeezing workers’ jobs and paychecks.
Buybacks, No Bonuses. Respected financial analysts agree that Wall Street is getting the gold mine, while workers are getting the shaft. The metrics may differ, but the message is the same:
- Bloomberg found that shareholders are enjoying 60 percent of the tax-cut gains, while workers are getting only 15 percent.
- Morgan Stanley reports that 43 percent of their tax savings are going to stock buybacks and dividends, while only 13 percent to workers’ raises, bonuses, and benefits.
- In an analysis of 121 Russell 1,000 companies, Just Capital found that shareholders are getting 57 percent of tax savings, while 20 percent is going to job creation and 6 percent to current workers.
- In fact, share buybacks are averaging $4.8 billion a day this year.
Kleenex Maker Wipes Out Jobs. Racking up $3.3 billion in profits last year and bragging that “we returned $2.3 billion to shareholders through dividends and share repurchases,” Kimberly-Clark is laying off as many as 5,500 workers, while closing or selling 10 plants globally. Many of these employees live near and work at the company’s plant in Fox Crossing, Wisconsin.
No More Buyouts and Broken Lives. Concerned about human tragedies like these layoffs, Senator Baldwin has introduced a bill to prohibit companies from buying back their shares on the open market.
- Co-sponsored with Democratic Senators Elizabeth Warren of Massachusetts and Brian Schatz of Hawaii, the bill would also repeal a 1982 rule by the Securities and Exchange Commission allowing companies to buy back immense amounts of their own stock.
Baseball has been very good to Nelson Figueroa, Jr. With a 91-mph fastball, he played for six Major League Baseball teams and now does post-game studio analysis for the New York Mets.
Still, he remembers how hard it was working his way up through the minor leagues on $20 per diems: “They take $13 a day from you for clubhouse dues, so you get one meal there and then you are trying to get two on $7. It’s a $10-billion industry. It doesn’t have to be this way.” And now he’s concerned that Congress is making it even harder for today’s minor leaguers.
Coming Up in the Minors Just Got Harder. Buried on page 1,967 of the 2,232 spending package signed by President Trump, is a booby-trap for minor league baseball players who make as little as $5,500 a season.
- Now, these players are denied the pay protections that regular hourly workers receive.
- They’ll be paid for 40 hours a week at the minimum wage no matter how many hours they actually work. And they won’t get paid for spring training.
- This means players who never make it to the big leagues could be paid as little as $1,100 a month.
Billionaire Owners, Struggling Players. Major League Baseball’s parent clubs are responsible for minor-league wages, not the minor league teams themselves.
- This means minor league players will have to work even harder in their offseason jobs instead of keeping in shape for their “field of dreams” as ballplayers.
- While they skimp on minor league players’ paychecks, Major League Baseball’s billionaire owners spent $1.32 million on lobbyists in 2016 and 2017 on issues like exempting the minor leagues from federal pay standards.
Restaurant servers, hotel workers, car-wash employees, and other tipped workers just won a big victory. As part of the $1.3 trillion spending package that President Trump signed on March 23, he backed down from a proposed federal rule letting bosses pocket workers’ tips.
Public Overwhelming Opposes “Tip-Stealing Rule.” While Trump’s Labor Department said the rule would let restaurants share servers’ tips with untipped workers, it would have let employers take the tips themselves.
- As the Economic Policy Institute estimated, the rule would have cost servers and other tipped workers $5.6 billion, with women losing $4.6 billion.
- Fighting back, workers and their allies submitted more than 200,000 public comments opposing the rule.
Trump Allies Buried the Bad News. The Labor Department’s economists found that workers “could lose out on billions of dollars in gratuities.”
- Seeking to suppress these findings, Trump appointees at the White House and the Labor Department tried to change the research methods. When the study still showed workers losing, they tried to bury the study altogether.
- At a hearing on March 6, Democratic Congresswomen Rosa DeLauro of Connecticut and Katherine Clark of Massachusetts grilled Labor Secretary Alexander Acosta about the suppressed study.
- Stung by the public criticism, Acosta reached an agreement with Democratic Senator Patty Murray of Washington to scrap the rule.
Compromise Spotlights Need for “One Fair Wage.” Under the agreement, any restaurant setting up a tip pool must pay all its tipped workers the full federal minimum wage—$7.25 an hour.
- That’s a big increase from the federal subminimum wage for tipped workers—only $2.13-an-hour.
- This highlights the need for “one fair wage” for all workers. Seven states have eliminated the sub-minimum wage. Michigan and Washington, DC, will vote on the issue this year, while New York is considering the idea.