Friday, January 12, 2018

Friday Morning Links

Assorted content to end your week.

- Gwynn Guilford discusses how dependence on coal and other resources has left the U.S.' Appalachian region both poor and ill-equipped for the future after enriching a few corporate owners. And David Dayen notes that a national tax giveaway to the rich is leading to a new round of layoffs and attacks on workers papered over with one-time announcements:
(T)his may end up being the most aggressive corporate public relations scheme we’ve seen in America since a bunch of movie studios got together during the Great Depression to run attack ads smearing Upton Sinclair’s progressive campaign for governor of California. The money flowing to workers in these announcements are like a nickel in a tin can compared to the bounty rushing into corporate treasuries. In many cases, they seem to have been pre-planned prior to the tax bill, done to reap a tax write-off, or announced to mask layoffs elsewhere in the business.

Consider the one-time, $1,000 bonuses for employees that many companies, like Comcast and AT&T, have announced. First of all, one-time bonuses, while nice to have, are not wage increases. The promise of the tax cut was not that it would let companies throw a few bucks in the employee tip jar, but permanently raise pay. Bonuses don’t make up for stagnant wages, as Southwest Airlines’ mechanics union, which has been locked in a contract battle for over five years, told the company.

The Comcast and AT&T bonuses were also announced late last year, allowing them to be written off as a business expense in 2017. If a business gave a bonus in 2017, it went against the 35 percent corporate tax rate then in effect. If were to give one this year, the bonus would only go against the new 21 percent rate. In other words, it was cheaper for businesses to announce bonuses in December than January, suggesting we may not see much of their kind again.

But Comcast and AT&T in particular serve as the poster children for dishonesty in this matter. Because around the same time that they made a big show of rewarding employees with bonuses, both companies quietly engaged in layoffs. Comcast fired 500 members of its sales department before Christmas, and AT&T is eliminating “thousands” of jobs, according to its union, the Communications Workers of America. “We believe there's more than 4,000 people AT&T has (notified of layoffs) across the country,” Larry Robbins, vice president of CWA Local 4900, told the Indianapolis Daily Star.

Just to do the math on this, $1,000 bonuses to 200,000 AT&T workers is $200 million. Cancelling 4,000 jobs at the median US compensation of $59,000 per year (some of the workers affected likely earned less) would actually amount to a higher number, and unlike the bonuses, those layoffs are permanent. More to the point, any $1,000 bonus for workers is a drop in the ocean compared to chopping the corporate tax rate by 40 percent, as the Trump tax cuts will. AT&T, according to calculations from economist Dean Baker, will see $2.4 billion in annual savings from that tax cut, more than ten times the likely cost of its the one-time bonus.
(T)hese announcements are worse than a joke. They represent a deliberate strategy to curry favor with the public and President Trump while executives gorge themselves on tax cuts, most of which won’t trickle down to anyone. Corporations simply don’t make decisions based on taxes, and certainly not decisions to benefit workers over the long-term. These corporate PR departments are deceiving America to preserve an ideology of ultra-low taxes, and hoping nobody notices the truth.
- Erica Alini reports on the lack of uptake on Canada's disability tax credit (and associated benefits) due to the difficulty involved in applying. And Julie Ireton exposes the reality that the Phoenix pay system was designed all along to fail - including by using customized settings to pay employees the lowest possible salary for their pay band, rather than the amount actually offered.

- Jessica Ross points out why Ontario's plan to limit prescription drug coverage to people under the age of 24 falls far short of both keeping people healthy and making effective use of public resources.

- Finally, Richard Power Sayeed reports on Jeremy Corbyn's plan to ensure that UK Labour is a constantly-active mechanism for community activism - not only an electoral machine to be brought out of mothballs every few years.

No comments:

Post a Comment