Paying for Low-Wage Pollution

Whether it’s half a dozen of one or 6 of another, we continually find ourselves contributing to the socialization labor costs as corporations incorporate poverty wages into their wage compensation schemes.  The article below may look at how Cook County, IL is looking for ways to combat those practices, but I thought it was apropos as food for thought, as you vet those candidates you choose to support with your coveted vote at the ballot box this fall.


Economic justice activists are championing laws that shift the costs of toxic poverty wages from communities to corporations.
— by Liz Ryan Murray

liz-ryan-murrayImagine if a corporation set up shop in your community and immediately dumped toxic sludge in your local waterways and buried radioactive waste next to your biggest playground. You and your neighbors, I bet, would demand full compensation from that corporation to pay for the clean-up and public health costs.

You’d have a strong case.

What about corporations that pollute communities not with chemicals, but with poverty wages? The impact can be every bit as toxic, and yet companies that pay low wages get off scot-free. In fact, their CEOs usually get bonuses.

Economic justice activists across the country are fighting back against this outrage. They’re demanding that corporate polluters pay a price for low wages.

In the Chicago area, for instance, Cook County commissioners are considering a bill that would slap fees on corporations employing more than 750 workers at less than the local living wage — currently $14.57 per hour, or $11.66 with health benefits.

Walmart_fair_wages_minimum_wage_labor_workers
Courtesy of National People’s Action

Under this proposed Responsible Business Act, companies would pay the local government $750 per employee each year for every dollar their wages fall below the living wage. The bill would generate an estimated $580 million in the first four years.

Community stakeholders would get a voice in deciding how to spend this revenue to help low-income residents. For example, some of that money might boost health care options, pre-trial services, and housing assistance.

Why not just raise the minimum wage? In an ideal world, it would be the best solution. That’s why “Fight for $15″ campaigns are catching on. Unfortunately, the vast majority of Americans still live in places where wages won’t lift working families out of poverty anytime soon.

Low-wage employer fees provide a good alternative by targeting the large corporations that can afford to pay their workers more, but are choosing to drive low-wage pollution instead. This approach encourages these companies to raise wages while leveling the playing field for the businesses that are already taking the high road.

As long as poverty wages persist, we’ll all pay the price.

Poverty wages leave workers with too little buying power. Local businesses suffer when local people can’t afford to buy their products and services.

And young people suffer, too. Researchers have linked high poverty rates to lower educational achievement and poor health. And poverty wages make high poverty rates inevitable.

Low-income people, especially in communities of color, also face a far greater risk of being arrested and jailed for minor offenses, leaving them with even higher barriers to future economic opportunities.

Who subsidizes these poisonous poverty wages? Taxpayers.

To keep their families healthy and safe, low-wage workers have little choice but to turn to public assistance programs. Reforms like Cook County’s Responsible Business Act could help us recoup some of these costs.

Large corporations are “socializing labor costs,” sums up Will Tanzman of IIRON, the Illinois-based economic and social justice organization that’s part of a growing movement for the Responsible Business Act. One local poll, he points out, shows county residents favoring the bill by a 2-1 margin.

Connecticut activists pushed a similar bill last year. A new law in that state mandates the creation of an advisory board where workers will join employers, public assistance recipients, elected officials, and other stakeholders to develop recommendations for how the governor and state legislators can address the public cost of low-wage work.

Activists and elected officials elsewhere, including Colorado and New York, are also exploring the possibility of applying low-wage employer fees.

These campaigns aren’t about demonizing public assistance. In the richest country in the world, we should have a safety net strong enough to ensure that all our most vulnerable people live in dignity. That ought to be a matter of national pride.

But a system that lets overpaid CEOs underpay workers and then get taxpayers to foot the bill for the damage that results? None of us can take any pride in that.


Liz Ryan Murray is the National People’s Action policy director. Distributed by OtherWords.org and cross-posted at Inequality.org

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President Obama: “When women succeed, America succeeds.”

Kay Morrison is 90 years old. And in 1943, when she worked as a journeyman welder on the assembly line at Kaiser Shipyard #2 in Richmond, California, she earned the same wage as the man working the graveyard shift alongside her.

As Kay said, “it can be the same today.”

And yet, on average, full-time working women earn just 77 cents for every dollar earned by men.

Earning equal pay starts with a conversation — and that’s why, this week, President Obama signed an executive order prohibiting federal contractors from retaliating against employees who choose to discuss their pay.

Watch the President — and Kay — speak about this issue. And if you learned something new, pass it on:

But They Can’t Possibly Afford to Raise the Minimum Wage?

Average CEO Salary Reached A New Record High Of $9.7 Million In 2012

— by Aviva Shen on May 22, 2013 at 3:45 pm

The average CEO salary broke records in 2011 at $9.6 million — and now, that record high has been topped by 2012 salaries, which averaged out to $9.7 million. Health care and media CEOs enjoyed the highest pay, while utility CEOs had the lowest at $7.5 million. Sixty percent of CEOs got a raise last year.

Though CEO pay dropped slightly after the financial crisis, it quickly rebounded to reach new heights in 2010, 2011, and now 2012. Simultaneously, the pay gap between CEOs and workers has also broken records, as the average CEO in 2012 earned 354 times more than the average worker.

During the recession, some companies changed their compensation formulas to incorporate more stock as a way to tie executives’ salaries to the company’s performance. As the stock market enjoys all-time highs, CEO pay has also soared. Yet the stock market’s rally has not been felt by most middle and low income families, as the housing market recovers in fits and starts. As a result, income inequality has been exacerbated in the first two years of the recovery.

Skyrocketing executive salaries since deregulation in the 1980s helped the top 1 percent of Americans expand their share of income, even as worker pay has stagnated.

The Dodd-Frank Wall Street reform law tried to address this phenomenon by ordering public companies to reveal the exact disparity between their CEO and worker pay. Three years later, many big businesses are lobbying to kill the requirement in the rule-making process. Transparent payrolls can help keep executive compensation within the stratosphere and help investors get a sense of employee morale and company reputation. Even so, JP Morgan Chase CEO Jamie Dimon compared efforts to tamp down executive pay to Communist Cuba. Whole Foods, which tracks pay to ensure that no employee makes more than 19 times the median company salary, has dismissed claims that the rule burdens businesses, noting it only takes a few days to track.

Skewed executive compensation levels made some CEOs iconic villains after the financial crisis. Citigroup CEO Vikram Pandit got a $6.7 million pay-out after driving the bank to near ruin, while a Duke Energy CEO received $44 million for one day of work.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.