Higher wages won't substantially raise prices

Many low-wage employers have been waging a war of fear against raising the minimum wage upwards of $15 an hour. They put out a message, for example, that a fast-food hamburger will now cost $10 and will make products unaffordable.

But a new New York Times piece shows that just isn't the case. Where some jurisdictions have raised their local minimum wage to levels approaching $15 themselves, several restaurant chains are reporting it hasn't caused them to dramatically increase prices. Representatives from Shake Shake, Domino's Pizza, Chipotle and Chili's said prices haven't gone up more than two percent.

As the Times' article states, inflation is not likely to run rampant if salaries are increased:

The last seven years have featured flat wages in inflation-adjusted terms, combined with rising corporate profit margins, two phenomena that aren’t completely unrelated. The behavior we’re seeing out of major restaurant chains may just be a sign that this is reversing, and that worker compensation will gain at the expense of corporate profits. If that’s the case, worker pay has some room to run before consumer price inflation is a real problem.

Workers' salaries should not be held hostage by obscene corporate profit margins. Hardworking Americans have been getting the short end of the stick for far too long. They only want to be able to earn a fair wage so they can support their families. But right now, that's a real struggle for many of them.

Despite what critics of a higher minimum wage might believe, the U.S. businesses will not be devastated by an increase in the salary floor -- even to $15 an hour. Instead, raising wages will improve the economy because it will give people more money in their pockets to spend. And that's good for everyone.

NLRB bill is exactly what workers don't need

Workers in recent years have been taking it on the chin from corporations. Quality jobs have vanished and wages seem to be stuck in neutral. And some states have even decided to roll back union rights.

But not all lawmakers evidently believe that's enough. Even as income inequality grows while corporate profits soar, elected officials like Rep. Joe Wilson (R-S.C.) seem to believe corporations deserve less oversight and more breaks.

That's the only excuse one could have for introducing the National Labor Relations Board (NLRB) Reform Act, which would lessen the agency's ability to intervene and fix workplace disputes.

As The Hill wrote today:

Under the new legislation, the NLRB would be turned into a six-member bipartisan agency that could make it more difficult to act. Furthermore, the agency’s top lawyer would have less authority.

The NLRB could also face funding cuts.

Rep. Wilson seems to bemoan the existence of unions. It makes one wonder if he knows that members of the Teamsters and other unions make on average more than $200 a week more than non-union workers? Or that during the 1950s when America's middle class was at its zenith that union membership was at its highest?

Probably not. But this union does. That's why enhancing workers' rights is part of the Teamsters' "Let's Get America Working" platform. And it's why Congress must say no to legislation like this that will only hurt everyday Americans even more.

There's nothing sweet about Hostess's success for ex-workers

Almost three years ago, just before Thanksgiving, Hostess Brand executives threw their then 18,000 union workers under the bus by blaming them for the need to declare bankruptcy. The move put these Teamsters and other union members out of a job. But now, the company's new venture capitalists owners are borrowing more than $900 million to give their shareholders a slap on the back for a job well done.

Apollo Global Management LLC and Metropoulos & Co. acquired the maker of Twinkies from liquidation in 2013 for $410 million. Since then, freed from the burden of providing fair wages and a pension, the new ownership has flourished. In fact, it turned down an offer to sell the new Hostess for $1.6 billion earlier this year and is still mulling taking the company public instead.

It's all quite a turn of events for a company that saddled its poor business decisions on its workforce and blamed it for its failures even though it repeatedly couldn't reduce its debt during previous bankruptcy efforts. It is emblematic of the current culture where the rich get richer and workers get screwed.

But are the current owners making the same mistake as the previous ones? As Bloomberg stated:

For Hostess, the deal will triple debt levels to about six times a measure of earnings, according to an S&P report this month. Regulators including the Federal Reserve and the Office of the Comptroller of the Currency said in their 2013 leveraged lending guidance that debt levels exceeding six times raise concern as they seek to curb risky underwriting.

Of course, given that Apollo and Metropoulos are only looking to maximize profits, they probably don't care about these issues. They want the money. It's a real problem in the private sector today -- short-term profit over fiscal longevity and a concern for workers who help put a company in the black.

Hostess's current bosses should be wise to the mistakes of their predecessors. Workers shouldn't be getting the short end of the stick.

Some in Congress set sights on union movement

Anti-union lawmakers are at it again. Not satisfied with ever-growing income inequality in the U.S. and huge corporate profits, several members of Congress are looking to further squeeze hardworking Americans by making it harder to organize and easier to shut unions down.

The Hill describes the effort as a retread of previous attempts to curtail union activity, including the ability to make political donations:

The bill is the latest shot fired in the bitter battle between the Obama administration and Republicans over labor policy. Hatch introduced the legislation in 2012, but to little avail. With Republicans now in control of the Senate, he's hoping for more success this time around.

It boggles the mind what these lawmakers are trying to do with such efforts. They always start by saying they're not against unions, but such efforts would gut them by making them poor and powerless, thus rendering them obsolete. Of course, that is the real plan behind such legislation.

Need proof of what the job market looks like when union membership is driven down? Head south to America's Sunbelt, and you will find a virulent strain of anti-unionism led by state and local leaders even in the wake of falling wages. Companies may have relocated there, but there not driving up income, only their own profits.

Unfortunately, some in the Midwest have bought into the big business hype, as The American Prospect outlines:

In the last three years, the Republican governors and legislatures of such onetime union bastions as Michigan, Indiana, and Wisconsin have joined the South in enacting “right to work” laws intended to reduce union membership. Since these laws cover only private-sector unions, and thus have no effect on the labor costs of government employees, the Republicans’ initial motivation was almost entirely political: Diminishing unions weakened institutions that generally campaigned for Democrats. But in recent months, bills to lower wages for construction workers on public projects have been moving through the legislatures in those three states, and the Michigan legislature has passed a bill forbidding cities from setting their own minimum-wage standards—all measures designed to hit workers’ pocketbooks. Moreover, laws designed to depress minority, millennial, and Democratic voting by requiring voters to present particular kinds of photo identification have been enacted not only by eight of the eleven once-Confederate states, but by Indiana, Michigan, and Wisconsin as well. Like the pre-1861 slaveholding elites, today’s Republicans appear increasingly dedicated to Southernizing the North.

Workers and elected officials shouldn't be fooled by these efforts. RTW and this latest congressional effort are frauds. They drive down wages for everyday Americans. Union jobs pay $200 more a week on average. When unions are strong, America is stronger.

Today's Teamster News 08.11.13

U.S. Companies Thrive as Workers Fall Behind  New York Times   ...AMERICAN companies are more profitable than ever — and more profitable than we thought they were before the government revised the national income accounts last week. Wage earners are making less than we thought...
Hidden Billionaire Cohen Hauls Fortune in Unmarked Trucks  Bloomberg   ...The 61-year-old -- who goes by “Rick” -- has transformed C&S into the world’s largest grocery wholesaler since taking the helm of the business in 1989, making him one of the 100 richest people in the world and the wealthiest man in New England...
My ALEC Diary  The Progressive   ...As keynote speaker Stephen Moore, founder of the Club for Growth and writer for the Wall Street Journal, stated, “What we really need is more rich people,” regardless of the cost to everyone else...
Walmart’s big lie: No, it doesn’t create jobs!  Salon   ...Research shows that destroying jobs is an essential component of the retail giant’s anti-worker business model...
Fast Food Wage War: Thousands of Protests Coming This Year, Says Movement Leader  Yahoo Finance   ...there's little doubt that there will be a fourth effort to get to $15 an hour, and probably a fifth and sixth attempt too, as Fast Food Forward pushes for better wages and benefits, as well as the right to organize...
Myth and Reality: The Low-Wage Job Machine  Federal Reserve Bank of Atlanta   ... the growing wage disparity is a trend, not a unique feature of the postcrisis period...
America's Most Dangerous Bridges  Travel and Leisure   ...One thing these bridges have in common, whether in Oregon or Louisiana, is age. All are more than 45 years old, and they’ve got company nationwide. Many structures from the bridge-building boom of the 1950s were designed for a 50-year lifespan, Leshko says. “When you do the math, you can see why we are where we are...”
Why I changed my mind on weed  CNN   ...It doesn't have a high potential for abuse, and there are very legitimate medical applications. In fact, sometimes marijuana is the only thing that works...
State finds ‘manipulation’ of school grading formula  Post-Tribune   ...State education officials have discovered “manipulation” in the state’s school grading formula as part of an ongoing review following the grade-changing scandal which cost education star Tony Bennett his job as Florida schools chief...
Fight For Paid Sick Leave Starts In Massachusetts  ThinkProgress   ...Raise Up Massachusetts, a coalition of labor, religious, and community groups, filed a proposed ballot question that would guarantee that the state’s workers have access to paid sick leave...
Tax cut’s job creation questioned  Columbus Dispatch   ...From June 2005 through June 2013, a span that included a 21 percent state income-tax cut, Ohio saw a 3.9 percent drop in jobs, ranking 47th nationally in job creation...

Today's Teamster News 12.04.12

Don't Cut Medicare Benefits -- Tackle Drug Prices  Huffington Post   ...As the approach of the so-called "Fiscal Cliff" nears, many advocates nationwide are making this message clear: Medicare benefit cuts are not an option...
Corporate profits hit record as wages get squeezed  CNN Money   ...In the third quarter, corporate earnings were $1.75 trillion, up 18.6% from a year ago ... That took after-tax profits to their greatest percentage of GDP in history. But the record profits come at the same time that workers' wages have fallen to their lowest-ever share of GDP...
As Companies Seek Tax Deals, Governments Pay High Price  New York Times   ... states, counties and cities are giving up more than $80 billion each year to companies ... many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid...
American manufacturing contracted in November  manufacture this   ...Employment in the manufacturing sector contracted for the first time in three years, while a measure of inventories—a gauge of future demand—dropped sharply to 45 from 50, suggesting firms are delaying hiring and keeping stockpiles low...
Push Against Unions Flares In Michigan  Wall Street Journal   ...Unions in Michigan are trying to fend off a push by Republican lawmakers to pass right-to-work legislation—the latest in a string of challenges to organized labor in one of its traditional Midwestern strongholds...
L.A.-Long Beach port strike enters second week  Associated Press   ...Negotiators returned to the bargaining table Monday as a strike that has crippled operations at the nation's largest port complex entered its seventh day. Los Angeles Mayor Antonio Villaraigosa demanded that both sides meet nonstop until they reach an agreement...

Today's Teamster News 10.29.12

The American Economy On Purgatory Mountain  Economic Populist   ... It's not taxes, small government or big government, or even the deficit. The real problem are jobs going offshore, companies treating workers as disposable and the never ending race to the bottom on wages, global labor arbitrage...
A Part-Time Life, as Hours Shrink and Shift  New York Times   ...the Bureau of Labor Statistics has found that the retail and wholesale sector, with a total of 18.6 million jobs, has cut a million full-time jobs since 2006, while adding more than 500,000 part-time jobs...
EU Bureaucracy has Lost Control of Italy; Social Mood Turns Black  Mish's Global Trend Economic Analysis   ...Northern Italy has been fermenting with protests and is becoming radical.  The paradox is that the rich part of the country is collapsing under the Euro and the EU driven austerity, crushed by competition from Germany, competition from Asia and other emerging region with weaker currencies and improving technology and skills and by high commodity and energy costs...
‘Anti-Business’ Obama Is Best President For Corporate Profits Since 1900  ThinkProgress   ...Even if corporate profits under Obama are compared to the 2008 peak — in order to erase the effect of the financial crisis — “average annual corporate profit growth under President Obama is 6.8%,” or nearly three times as large as it was under President Reagan...
Romney Auto Bailout Ad Tells Four Myths In 30 Seconds  ThinkProgress   ...Romney claimed he read a news story that said Chrysler was planning to “moving all production to China.” The Bloomberg News piece he referenced, though, made it clear that Fiat, the Italian company that now owns Chrysler, was opening new factories in China to make Jeeps for Chinese consumers. No American plants will be closed, and no American jobs will be lost...
New tools aid door-to-door push for votes  Boston Globe   ...A Teamster and UPS driver, Cote said he has been inundated with union literature urging him to vote for Obama. The Teamsters have their own microtargeting effort; the union president, Jimmy Hoffa Jr., who supports Obama, can be heard in a message on Cote’s answering machine. Cote is sympathetic to concerns that union interests could be undermined by a Romney presidency...