News

Wednesday, Apr 23, 2014 • 11:03 am

Fast-Food CEOs Pocket $660 Million in ‘Performance Pay’

By Sarah Berlin

Fast food workers have organized strikes and campaigns throughout the past year that have drawn attention to the industry's poor wages and subpar working conditions. Workers are beginning to see some successes, and they now have solid research to back up their complaints. Two studies released this week highlight the extreme disparity between fast-food workers' wages and their CEOs' earnings, indicating the broader economic costs of this inequity.

In an analysis of U.S. companies, the Demos study found that CEOs of fast-food companies earn some of the highest salaries in the whole economy. Fast-food workers, on the other hand, are the least compensated workers. Demos points out two key problems with the industry's income gap:

  • The most unequal sectors are among those providing the greatest numbers of new jobs in the economy, replacing jobs in sectors with lower income inequality.
  • Income inequality is increasing legal, regulatory and operating risks for fast-food firms. Millions of dollars in legal fees, increasing customer wait times and labor unrest are evidence of the systemic problems of income inequality in fast food.

The Institute for Policy Studies(IPS) released a second study, which examines the tax-payer burden of restaurants handing out millions in "performance pay" to their CEOs in order to avoid paying higher taxes. IPS explains:

During the past two years, the CEOs of the 20 largest [National Restaurant Association] members pocketed more than $662 million in fully deductible “performance pay,” lowering their companies’ IRS bills by an estimated $232 million. That would be enough to cover the cost of food stamps for more than 145,000 households for a year. ...

The next four largest beneficiaries of the CEO pay subsidy are fast food corporations. Chipotle, Yum! Brands (owner of Taco Bell, KFC, and Pizza Hut), McDonald’s, and Dunkin’ Brands each raked in CEO pay subsidies ranging from $12 million to $68 million over the period.

Both studies point to policy solutions to ensure corporations do not have free reign to underpay employees or avoid paying their share of taxes.

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Monday, Apr 21, 2014 • 9:17 am

Philadelphia Implements Landmark Progressive Immigration Policy

By Dan Staggs

Last week, Philadelphia Mayor Michael Nutter signed an executive order that Philadelphia police will no longer hold detainees for Immigration and Customs Enforcement officials, unless the detainee has committed a violent felony and ICE obtains a judicial warrant. Because detainees accused of committing violent felony offenses are generally sent to state prison rather than city jail, immigration advocates have praised Nutter's move as a de facto end to deportations of Philadelphia's immigrant population. 

At a time when activists around the country are rallying to demand a moratorium on deportation, Philadelphia's policy stands as one of the most progressive in the United States. CBS Philly reports:

Nutter says the new policy does not mean the city will be soft on crime. He says anyone who breaks the law will be prosecuted and, if they are convicted, they will be punished.

“The executive order does not protect criminals from the criminal justice system,” says Nutter, “it simply protects innocent individuals from in effect being punished when doing the right thing and cooperating with us to find and arrest real criminals.”

Immigration advocates claim fear of ICE holds kept many in the immigrant community from reporting crime and cooperating with police. They call the order a win.

“It’s been a long fight,” says Erika Almiron, executive director of Juntos. “We need to celebrate and then we need to get focused on how this is implemented.”

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Thursday, Apr 17, 2014 • 1:40 pm

Taxpayers Ask Walmart Chairman To Make Good on the Tab

By Sarah Berlin

According to a report released by Americans for Tax Fairness on Monday, Walmart uses tax loopholes to avoid paying $1 billion of federal taxes a year and receives $6.2 billion a year in taxpayer subsidies. That's in addition to the $70 million the company gets in direct economic development subsidies and the millions the Walton family receives in preferential tax rates on company share dividends. All in all, that's costing taxpayers billions of dollars—every single year.

And on April 15, Walmart employees and taxpayers brought the $7.8 bill to the home of Walmart Chairman Rob Walton.

OUR Walmart, a group that advocates for the fair treatment of Walmart workers, explains in a press release published on Common Dreams that the Waltons keeps getting richer as most Americans continue to struggle:

“Like most Americans, I work hard, pay my taxes and play by the rules. Why can’t America’s richest family do the same?” said Venanzi Luna, a Walmart worker who undersigned the bill. “Our economy is out of balance and workers are struggling because people like the Waltons don’t pay their fair share.”

Walmart made a $16 billion profit in 2013, and the six Walton heirs, who own more than 50 percent of Walmart shares, saw their wealth grow to $148.8 billion—more wealth than 49% of American families combined.

The report by Americans for Tax Fairness found that, “…the American public is providing enormous tax breaks and tax subsidies to Walmart and the Walton family, further boosting corporate profits and the family’s already massive wealth at everyone else’s expense.”

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Tuesday, Apr 15, 2014 • 4:58 pm

Minnesota’s Minimum Wage Takes a Leap

By Alex Wolff

Minnesota became the latest state to pass legislation raising its minimum wage yesterday, when Governor Mark Dayton signed a bill that will increase pay for the state's lowest earners to $9.50 per hour by 2016.

The new law will amend the state's current minimum wage of $6.15 per hour—one of the lowest in the country—in a series of hourly wage hikes, the first of which will go into effect this August.

For Minnesota's Raise the Wage coalition, the new law is the fruit of 15 months of dedicated organizing, lobbying and media work. Once the State House approved a $9.50 per hour minimum wage last May, the coalition of labor, community and faith organizations pressured the State Senate to adopt a similar position by way of public demonstrations, community outreach initiatives and meetings with state legislators. The Senate finally struck a deal with the House last Thursday.

The Associated Press reports:

Minnesota goes from having one of the nation's lowest minimums to among the highest. With federal wage legislation stuck in Congress, states are rushing to fill the void. California, Connecticut and Maryland have passed laws pushing their respective wages to $10 or more in coming years, and other states are going well above the federal minimum of $7.25 per hour. Not all Minnesota workers have qualified for the federal minimum, which is required if someone engages in an interstate transaction such as swiping a credit card at the cash register.

For large Minnesota employers, mandatory hourly pay will climb to $8 in August, $9 a year later and $9.50 in 2016. Smaller employers that have gross sales below $500,000 will also have to pay more, though their rate reaches only $7.75 per hour by 2016. There are also carve-outs for teen workers or those getting trained into new jobs.

The law—which endured widespread GOP disapproval in its passing, ostensibly because such a move would be "out of step" with the minimum wage laws of Minnesota's neighboring states—will relieve some of the financial burden on the state's working poor. Early estimates suggest that as many as 325,000 Minnesotans will experience a rise in pay.

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Friday, Apr 11, 2014 • 3:15 pm

France to Workers: Ignore Your Boss Tonight

By Alex Kogan

A new law bans about 1 million French workers in the digital and consulting industries from checking work-related emails and phone calls while not at work. CNBC reports:

“About a million French workers in the digital and consulting industries will be required to switch off work phones and avoid email before 9 a.m. and after 6 p.m., barring ‘exceptional circumstances,’ according to a BBC News article. The agreement reached by employers federations and unions also says employers cannot pressure their employees to flout the directive.”

Maintaining work-life balance for citizens has long been a priority in France, which mandated a 35-hour workweek in 1988. Still, that restriction of hours has gradually been undermined by the growing ubiquity of mobile devices. Still, workers are questioning whether the law is actually enforceable.

The law comes after Volkswagen made a similar resolution to restrict its servers from sending employees emails outside of their shift.

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Tuesday, Apr 8, 2014 • 12:30 pm

Unpaid Interns Gain Support From Labor Department

By Sarah Berlin
Last week, the Department of Labor filed a brief with the U.S. Circuit Court of Appeals on behalf of former Hearst Corporation interns who are seeking back wages in a lawsuit. The eight former interns claim that they worked long hours for Hearst, on tasks such as coordinating deliveries and completing expense reports, without compensation or adequate supervision. 
 
The Department of Labor uses a six-part test to determine whether a for-profit company needs to pay its interns. The criteria include not displacing regular employees and providing benefit to the intern, rather than an advantage to the company. According the Department of Labor, if a company violates any of these criteria, it must pay interns minimum wage. However, courts often employ a broader asessment. 
 
As Pro Publica explains, the Department of Labor's brief focuses on these conflicting standards:
[M]any courts have adopted a "primary beneficiary" or "totality of circumstances" test, which says that if the unpaid intern benefits from the internship more than the employer, the employer doesn't need to pay, whether or not the internship fulfills the government's six-part test.
 
In its amicus brief, the Labor Department asks the Second Circuit to reject the broader interpretation and adopt the agency's all-or-nothing standard, arguing that it is more objective and better protects interns from exploitation.
 
"Given the rapid expansion of unpaid internships across various sectors of the economy and the varied nature of those internships, it is important for the uniform enforcement of the [Fair Labor Standards Act] to have an objective test to measure interns' employment status," the brief says.
Former unpaid interns have filed more than 20 lawsuits in the past few years, but this is the first time the Department of Labor has intervened in a high-profile case. 
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Friday, Mar 28, 2014 • 3:15 pm

Dozens More Tech Companies Implicated in Wage-Suppression Cartel

By Alex Kogan

Documents in a lawsuit filed against seven tech giants, including Google, Pixar and Apple, have revealed that dozens more companies, with a combined workforce of over one million people, also made secret deals as part of a "wage-fixing cartel." The agreements allegedly restricted companies from hiring each other’s employees, thereby unfairly suppressing worker mobility and pay. The scheme was made public during a Department of Justice investigation into the "Techtopus"--the agreement between the original companies--that has since been settled, forcing the original seven to "curb their restricting hiring deals." 

PandoDaily reports:

Confidential internal Google and Apple memos … clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP.

The DOJ investigation that brought to light the damning information about the "Techtopus" deal has led employees to file a class action suit. Proceedings for the suit, which only names the initial seven tech companies as defendants, are set to begin May 27th.

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Tuesday, Mar 25, 2014 • 3:19 pm

Obama Unveils Plan to Reform NSA’s Data Collection Program

By Alex Wolff

President Barack Obama announced today that his administration will propose a sweeping set of changes to Congress regarding the National Security Agency's (NSA) current surveillance practices by the end of the week.

Details of the imminent proposal reveal a particular focus on revamping the manner by which the NSA reviews phone records monitoring citizens' calling habits. Bulk data would be taken out of the government's hands and held instead by phone companies, which in turn would not be required to save the records any longer than current laws limit. Moreover, a new court order model would force the NSA to seek permission from a judge before accessing specific records.

The New York Times reports:

The new type of surveillance court orders envisioned by the administration would require phone companies to swiftly provide records in a technologically compatible data format, including making available, on a continuing basis, data about any new calls placed or received after the order is received, the officials said.

They would also allow the government to swiftly seek related records for callers up to two phone calls, or “hops,” removed from the number that has come under suspicion, even if those callers are customers of other companies.

The NSA now retains the phone data for five years. But the administration considered and rejected imposing a mandate on phone companies that they hold on to their customers’ calling records for a period longer than the 18 months that federal regulations already generally require—a burden that the companies had resisted shouldering and that was seen as a major obstacle to keeping the data in their hands. A senior administration official said that intelligence agencies had concluded that the operational impact of that change would be small because older data is less important.

The NSA's reputation was dealt a severe blow last year when whistleblower Edward Snowden leaked documents betraying the agency's Orwellian surveillance program. This proposal could begin to restore some of the trust that privacy advocates lost in the government with those revelations.

The Obama administration has asked the Foreign Intelligence Surveillance Court to renew the current program—which is set to expire on Friday—for at minimum, one more 90-day cycle. Pending Congress's approval, the proposed reforms could begin to take root during that time.

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Tuesday, Mar 25, 2014 • 2:00 pm

Three More Chicago Public Schools To Be “Turned Around”

By Andrew Mortazavi

On Friday, the Chicago Public Schools announced its plan to “turn around” three more underperforming schools on the South and West Sides of the city. If the plan goes through, McNair Elementary, Dvorak Technology Academy and Gresham Elementary will be the next schools handed over to the private nonprofit Academy for Urban School Leadership (AUSL), which currently manages 29 Chicago Public Schools attended by 17,000 students. 

The turn-around process will involve firing all staff at the end of the school year. Students will return normally in the fall, albeit under the tutelage of mostly new staff. Under the model, AUSL must hire CTU teachers, and fired teachers are allowed to reapply for their jobs, but historically, most are not rehired.

Proponents of the turnaround model say it can have a profound positive impact on underperforming schools. The Obama administration has endorsed the strategy.

But not everyone is so hot on the turnovers and “not-for-profitization” of public schools. Opponents, such as the Chicago Teachers Union (CTU), claim that any improvement in turned-around schools is the result of millions of dollars of grant money pumped into the schools, not staff turnover.

According to WBEZ:

The Chicago Teachers Union immediately called the move “school closings by another name." It comes 10 months after Chicago voted to close 49 grammar schools, the largest single round of school closings in the U.S.

“They’re picking up where Rahm Emanuel left off last year, by destabilizing schools on the South and West Sides,” said vice president of the Chicago Teachers Union Jesse Sharkey. “We don’t think that the schools that are in some of the toughest neighborhoods in the city with incredibly dedicated faculty should be punished by having all those staffs fired. “

Sharkey said improvements in turnarounds are due to additional millions of dollars the schools get over their first five years, not the new staff. 

CTU also claims that the turnaround model results in racial inequities. A University of Chicago study confirms that turnarounds, which are predominately imposed on schools in black and poor neighborhoods, “do result in a younger, whiter teaching force,” WBEZ reports.

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Tuesday, Mar 25, 2014 • 1:39 pm

Wells Fargo Fabricated Foreclosure Documents

By Sarah Berlin

Court papers filed earlier this month allege that Well Fargo regularly created fradulent documents to speed up foreclosure cases. Linda Tirelli, a bankruptcy attorney, filed papers at a New York federal court on March 11, claiming that the mortage-giant used a forclosure manual that includes instructions for falsifying documents in order to prove the bank's ownership of loans.

The New York Post reports:

Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term ‘ta-da’ endorsement to describe situations in which they say a document appears, as if by magic, in the bank’s possession as needed in a foreclosure case—even though the proper endorsement was not included in the original foreclosure filing. It might sound like a technicality, but correct proof of ownership lies at the heart of the foreclosure crisis for securitized loans, which were sold by the lender that originally issued the mortgage. To legally transfer a securitized loan, the endorsements and allonges have to be created in a very specific way and within a specific time frame, usually 90 days after a residential mortgage trust closes. For many loans in foreclosure now, which were originated years ago and then sold, it’s way too late to correct incomplete documents, experts said. ...

“It’s an explosive document,” said forensic accountant Jay Patterson. “It creates doubt as to whether an endorsed note was actually done when it was supposed to be done years ago, and they didn’t just order it to prosecute the foreclosure.”

Over the past two years, whistleblowers have called out Wells Fargo offices in North Carolina and Minnesota for fabricating mortage documents. Because this suit points to a company-wide policy, rather than practices at particular branches, it has the potential to expose the larger mechanisms by which Wells Fargo violates the law. 

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