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.
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.
It’s your boss’s worst nightmare: You find out how much your company is overpaying your CEO, while they shortchange you and your co-workers. And you just might demand a raise.
Under a new federal regulation, publicly traded companies are required to reveal how much their CEOs are making, compared to their typical workers. Adding to their embarrassment, most major corporations are using their “yuge” tax windfalls to reward their executives and shareholders, not raise workers’ wages.
Spotlighting Inequality. As required by the 2010 Dodd-Frank law (best known for reforming the big banks), corporations are reluctantly shining a spotlight on imbalances in their own pay scales, reflecting outrageous inequalities throughout the economy:
- In a survey of large corporations on the S&P 500, the average CEO was paid 347 times as much as their average worker.
- With the stock market surge last year, median (typical) pay for CEOs at 133 of the largest U.S. companies reached $11.6 million—an all-time high.
Grabbing Tax Breaks, Gouging the Poor, Getting a Huge Salary. Bank of America pocketed a $2.7 billion windfall from the Republican tax cut. Instead of sharing its good fortune, it started charging fees to depositors with low bank balances.
- Now, its CEO, Brian Moynihan, revealed he’s paid $23 million—250 times as much as his typical employee.
Is Your Boss Worth 1,000 Times as Much as You? Some companies pay their bosses more than a thousand times as much as their typical workers. Among the companies with the most exorbitant CEO-to-worker pay ratios:
- Temp agency Manpower’s CEO is paid 2,483 as much as its average worker.
- Amusement park Six Flags’ boss gets 1,920 as much as frontline workers.
- Del Monte foods’ CEO’s salary is 1,465 times the typical worker’s paycheck.
Angela Green teaches kindergarten at Mill Creek Elementary School in Shively, Kentucky. Ninety percent of the students are eligible for subsidized lunches, and school budgets can be tight. That’s why, as she says, “Any time we’re going to be doing anything special, all the materials are bought by me. Poster board, art supplies, I buy them all. I buy Play-Doh and books for my library in class.”
Stories like Green’s explain why teachers across the country are taking action for raises, respect for themselves, and more resources for their students. They’re encouraged by the successful strike initiated by West Virginia teachers, and they’re restless because, across the country, teachers’ pay is falling or flat-lining while their health insurance costs are increasing.
- Fighting Pension Cuts in Kentucky. Kentucky teachers have rallied at the State Capitol against pension cuts proposed by the Republican-controlled state Senate. And they were outraged when GOP Governor Matt Bevin called the state’s teachers, whose service and self-sacrifice are exemplified by Angela Green, “selfish and short-sighted.”
- Ten Years Without Raises Not Okay in OK. After 10 years without pay raises, Oklahoma teachers have warned they’ll strike on April 2 if the state legislature doesn’t act. Lilly Lyon, a junior high school Spanish teacher, sent legislators nine years of pay stubs, explaining that, because of her stagnant salary, “I work two jobs after school, and I have a roommate who shares my house expenses.”
- Addressing Health Insurance Costs in NJ. Some 3,100 teachers in Jersey City went back to work after a one-day strike now that the school system has agreed to address rising health insurance costs.
Manufacturing matters. “Big time.” Among other things, these jobs:
- Make modern life possible
- Protect our national security
- Encourage and apply new technologies
- Hold the key to reducing our trade deficit
- Contribute to the growth of the service industries, public services, and professional technical sectors
High-Paying Jobs. Most important of all, manufacturing still provides the high-wage, family-supporting, community-sustaining jobs that built the middle class.
- In fact, manufacturing workers earn 13 percent more in hourly pay than comparable workers elsewhere in the private sector.
Need to Expand & Improve Manufacturing Jobs. That’s why, as the Economic Policy Institute’s Larry Mishel concludes in his report: “We should not give up on U.S. manufacturing, which is still a source of better-paying jobs. But, because there is less of a pay advantage in manufacturing than there used to be, policies to expand manufacturing employment should be coupled with policies that make those jobs good jobs.”
Down but Not Out. Manufacturing workers’ wage advantage has fallen from 16.9 percent in the 1980s to 13.0 percent today. More from the report:
- Up against competition from low-wage economies abroad and cut-throat companies at home, American manufacturers are paying lower wages and using low-paid temp workers from staffing agencies.
- These temp agencies lowered the pay premium in manufacturing by 4 percent in the 2000s.
- But, compared to other workers, manufacturing workers’ benefits—especially insurance and retirement—have improved.
- Another hopeful sign: Union membership in manufacturing increased last year.
Jena Watanabe still can’t forget that moment when she was waiting tables in Utah, and “all of a sudden, I felt a slap on my butt.” Turning around, she saw a new customer. “Instead of reacting, because I was afraid of losing my tips or losing my job, I didn’t do anything.”
Watanabe is one of many servers who subsist on poverty wages and suffer sexual harassment. That’s why restaurant workers are making the most of the #MeToo moment in their fight for higher minimum wages that will make them less vulnerable to exploitation and abuse.
Low Wages, High Vulnerability. About two million people—70 percent of whom are women—work as restaurant servers.
- The federal government sets a subminimum wage of only $2.13 an hour for tipped workers (including servers and bartenders) to be paid that amount, as long as they earn $7.25 or more per hour with tips included.
- Servers say that their dependence on tips often forces them to accept abuse. In 2014, a survey of restaurant workers across the country found 78 percent had been harassed by customers; two-thirds by managers; and a full 80 by co-workers.
One Fair Wage. To raise incomes and reduce harassment, restaurant workers and advocates, such as the Restaurant Opportunities Center, are urging states to require the same minimum wage for all employees, including tipped workers.
- New York Governor Andrew Cuomo has called for public hearings.
- The issue will be on the ballot in June in Washington, DC, and efforts are underway for a referendum in Michigan.
- Currently, Alaska, California, Minnesota, Nevada, Oregon, Washington, and Wisconsin set the same minimum wage for tipped workers as other employees.
- With union representation, restaurant and hospitality workers enjoy wage increases and safeguards against harassment.