Tax system benefits only the rich

C.F. BAUMGARTNER
SPI GUEST COLUMNIST

The squeeze on the middle class is real. It began with the bailout of Social Security (FICA). In 1983, Social Security appeared to be in trouble. Congress acted to make certain it remained solvent.

Many Americans believe that FICA is a contribution, which goes into their retirement account. That is not so. FICA taxes finance monthly payments to retired Americans. It is not a savings account.

Financial planners advise us that paying taxes sooner than later is unwise. Paying a tax sooner rather than later makes our present and future less prosperous.

From 1984 to 2002, the government collected $1.7 trillion more in FICA taxes from wages of Americans making under $87,000 (income exceeding $87,000 is exempt from FICA) than it paid to beneficiaries. How much is $1.7 trillion? Enough to have paid off all the U.S. consumer debt at the end of 2001. Today three of four families pay more in FICA taxes than income taxes.

Corporations pay dividends from after-tax profits, and shareholders must report dividends as profits, which means dividends are twice taxed. President Bush has declared the double taxation of dividends fundamentally unfair.

He didn't mention FICA, but it is also double taxation. FICA taxes apply to wages that have already been subject to income tax. If double taxation of dividends is fundamentally unfair, he can make a stronger case against FICA taxes because they affect more Americans.

Ronald Reagan was elected president in 1980 because he promised to reduce taxes. The highest tax rate in 1980 was 70 percent, and 40 percent was common for some in the middle class.

Congress passed the biggest tax cut in history using the rationale of supply-side economics. Fewer taxes would lead to more investment and, thus, to economic growth. It failed. By 1982, the deficit was $343 billion, three times what it was when Reagan took office, and unemployment had reached 10 percent. Reagan's solution? Raise the price of a gallon of gasoline 5 cents.

By 1983, Social Security was in trouble. Congress increased Social Security taxes more than was needed in order to have a surplus ready for the retiring baby boomers 30 years in the future.

The late Sen. Daniel Patrick Moynihan saw the Social Security scare as bogus and called the proposed increase in taxes thievery, which masked the drop in revenues caused by the Reagan tax cuts for the rich. The "bailout," however, took place. FICA taxes now take $5,400 from every worker earning up to $87,000, and his employer pitches in the same amount. In 1970, the figure was $327.

The cumulative effect of FICA taxes and income taxes makes the system regressive, not progressive. Workers earning up to $87,000 pay 15.3 percent, while the $500,000 executive pays 5.6 percent.

Here is the truly egregious rip-off. Congress created a trust fund for the increased taxes. It would earn interest and be ready for the boomers. Instead, surplus FICA taxes went to pay for the day-to-day operations of the government. There is no trust and no fund.

Since 1983, the government has spent $5.4 trillion more that it took in from income taxes, estate taxes and excise taxes. However, government debt grew by only $3.6 billion because Congress allowed surplus FICA taxes collected from the wages of Americans earning less than $87,000 to finance a rip-off of the middle classes by the wealthy, and it's all perfectly legal.

(emphasis added by me)

Commentary: Freshening, Focus, Rising Bile, and the 'Ownership Society'

I suppose I should be used to it by now: balancing the budget on our backs, scheming to take every possible advantage of us, the attitude from owners that they're such paragons of virtue we ought to be willing to work for them for nothing and consider it a privilege, the invisibility, the lack of respect, and the daily fight to get through another week. I should be but I'm not. Some of you have noticed a rising tide of phlegm on FTT, and you're not wrong. I admit it: I'm not less angry in my old(er) age, I'm more angry.

When I was younger, I thought conditions would improve. When I was younger, the unions were stronger; you could live on minimum wage jobs, not well, but you could live; there were rules and at least a few of them favored us; and one of the national political parties acted like it cared what we thought, thought about what we needed, and needed some, anyway, of what we had to offer. That was when I was youger. When I was younger, I had hope.

For 25 years I have watched our lives go from bad to worse to awful, experienced the shrinking of our presence in society from near-invisible to practically-invisible to 'What? Are you still here? I thought you were dead.' I have seen the gains we made with sweat and blood--literally--washed away in a sea of anti-labor rhetoric. Saddest of all, I have seen way too many of us buy into that rhetoric and sign on to a movement that we refuse to understand, despite all the signs and signals, is dedicated to our destruction.

We have been sold a bill of goods, a pig in a poke, a sow's ear pretending to be a silk purse. They took advantage of our lack of education (which lets them think we're stupid), our limited resources (which they call 'laziness'), and our willingness to believe the best of people (which makes us, in their eyes, 'unrealistic' and 'naive'), and used them to convince us that unions weren't lifting us up, they were tearing us down; that management was really on our side and wanted to see us succeed; that our poverty was our own fault, not the result of what they were paying us, and that the way out of it was to work harder, longer, and cheaper.

I was talking union at the shop one day a couple of years ago--which I used to do a lot, to the point where many ran when they saw me coming--and one of the guys said to me that he would never join a union because he'd be 'stuck with it' forever. To him, joining a union was an admission that he would never be, could never be anything other than what he was--a laborer. A union wasn't a step up, it was a trap from which there was no escape. His idea of salvation from his low-income status was in owning his own business. 'Ownership' was the Holy Grail.

'Gonna get your GED soon, are you?' I asked--he quit high school in his junior year because he didn't think there was a 'point' to it.

No, he said, he wasn't planning on that. He didn't need to. All he needed was a good idea. He'd get a few grand from his dad as start-up money, and as long as he worked hard and aimed at the top, he'd get there. He didn't want to be 'a slob' (his word) all his life. He was going to be a millionaire before he was 40.

There's nothing wrong with dreaming. What was wrong was that he wasn't even rich yet and he already saw protecting workers as something separate from that dream and a barrier to it. He was a worker himself, yet he saw other workers as his natural enemies; a union was a bunch of them banding together to take away from him what he didn't even have yet, scheming what and how much they would steal as soon as he managed to acquire...something.

That's what makes Bush's sales pitch so powerful--and so dangerous. First they convinced us that we all want to be owners; then they convinced us that we all could be owners if we'd just stop wasting our time demanding frivolous luxuries like fair wages, affordable housing, and protection from the powerful. We, too, could be rich if we stood on our own two feet and stopped expexcting the government to do 'everything' for us. And now they're trying to convince us that society itself is based on 'ownership'; that if we don't 'own' something, we're not really Americans and we don't really count. So they, philanthropists that they are, are going to arrange it so we can 'own' things.

The invidiousness of this concept is almost beyond words. It takes Social Darwinism to new heights and predicates an entire society based on the premise that no man is his brother's keeper because it's the brother's problem and if he can't solve it, it's because he's lazy or stupid, and you're not responsible for those things are you? Then why should society be held responsible?

Apparently, Christ was lazy, stupid, naive and unrealistic, not to mention that he was probably a Commie, too.

This is only the beginning (I have to stop here or I'll go on for days). I've been thinking about the 'Ownership Society' for a few days and getting madder and madder at the intolerance, arrogance, and sheer brutality of it. Which leads me (yes, I know, 'Finally!' you're saying to yourself) to the point of why I started this post: The Changes.

I changed the name. Slightly. It never felt finished to me. I didn't know why until the last few days. I should have. The very first post I wrote (the opening of that post is on the sidebar now) said very clearly where I was going; I just didn't recognize it. I thought the white heat in which I wrote it would pass. And it did--or at least it seemed to. Actually, I buried it--like I always do, like a lot of us do, like we've been taught to do--so I could get on. But it never actually went away, and every article I found on the latest insult, the latest raw theft, the latest blatant manipulation, fed it like wood feeds a fire. The implementation of the new overtime rules and their consequent re-imagining of what constitutes 'management' only a day or so after Junior's latest 'Ownership Society' bilge got respectable write-ups everywhere sent me into a tailspin. I was so pissed I could spit nails, as my mother used to say (she didn't say 'pissed'; she said 'mad').

Then, the other day, I was doing some research on something totally unrelated to it when I stumbled on Lynd Ward's dark, angry engraving Moloch--the demon heart of Mammon. I remembered it from years ago but hadn't thought about it, in, I bet, a full quarter-century, so seeing it again was like seeing it with fresh eyes, grown-up eyes, eyes that knew exactly what it meant, not as a vision or a stylization or a warning but as a reality I was living in and had been for some time. Something clicked--my anger was starting to make sense to me; I was beginning to understand it.

But something was missing--the words. There were words that went with it, I knew that, but I couldn't remember them. Ginsberg or Ferlinghetti or Kenneth Patchen, I thought--one of the Beats, anyway. Howl?

Ginsberg, yes, but not Howl--a special, one-time only collaboration between a rising young poet and the established artist whose work had been his inspiration. Ward did the engraving and Ginsberg wrote the poem; neither pulled their punches. They called it The Moloch Broadside because it was published--picture at the top, poem underneath--on a single long sheet of paper and tacked to walls and telephone poles. It was intended as a call to arms like the Revolutionary broadsides it was copied from.

I hadn't read it in at least 35 years. The first time I read it I thought it was juvenile, over the top, almost childish. I wasn't even 20 yet. This time it was like getting kicked in the stomach--all the air was sucked out of me by Ginsberg's bold, bald shot to the heart. Talk about ripping away the veil! Ginsberg and Ward hadn't just opened the curtain the wizard was hiding behind, they had torn off the wizard's mask and shown us what it hid: The God of the Walking Death, the gaping, stench-ridden yaw of The PuppetMaster. Moloch--the worship of Things and the destruction of Life.

That's what I was feeling. That was the source of the rage I could hardly keep a lid on. Bush and his corporate cronies are actually Molochite devotees, servants to the belief that Greed is the highest emotion, and the acquisition of 'things' is the only measure of achievement. Moloch recognizes no human values, praises no human qualities, shows pity for no one and remorse for nothing. He is a single, simple force--he Takes. He is that in all of us that urges the virtues of unchecked selfishness whenever our generosity would have a price that would be hard to pay. He's the one who looks in the Sharper Image catalog, scopes out the mansions on the other side of town, dreams of expensive linens and designer clothes and cars that cost more than the house you live in. He's the one that whispers to you in the night that you deserve those things, you have a right to them, and that if you don't have them you're a failure.

I knew we were in a war. Now I've identified the enemy. The enemy isn't Bush or Cheney or Ashcroft or Chao or Norquist or DeLay. The enemy is the shadowy figure behind and above all of them, the cold stone of a dead idol in which we've invested massive power because messy, chaotic, undisciplined Life scares us but doesn't move the stone.

All of which is an astoundingly long-winded way of saying that this site is going to stop assuming the war is metaphorical and start treating it like it's a real shooting war--which it is. Thus 'Dispatch From the Trenches'--messages from and for The Front where the battles are being fought and the troops are doing the dying. And thus the words of Allen Ginsberg to remind us who the real enemy is.

I can't say I know yet how this is going to work out in practice. What I can say is that I intend to try to cut to what's behind the stories; we can never match his superiority of weapons, but maybe we can even the playing field a bit by cutting off his supply lines. In any case, I probably ought to warn you that there's going to be a lot more anger floating around here--and plenty of targets to aim it at.

I think hope (remember 'hope'?) is a function of the belief that things can change for the better, but also the result of active resistance to and rejection of anything and anyone who tries to take that hope away by closing off options and rigidly defining what's an 'acceptable' response. Anger is a key part of that half of Hope. You need focused anger to resist and resist and resist again.

Welcome to the Resistance.

Judge Allows Class-Action Suit for Unpaid Overtime

By Maura Dolan and Lisa Girion, LA Times Staff Writers


SAN FRANCISCO — In a closely watched labor law case, the California Supreme Court cleared the way Thursday for a class-action lawsuit brought by Sav-on Drug Stores workers who say they were misclassified as managers and improperly denied overtime.

The unanimous ruling overturned a lower-court decision that would have discouraged such suits.

Plaintiffs' attorneys maintain that many workers — despite being given titles such as "store manager" or "team leader" — spend most of their day on non-managerial tasks such as stocking shelves or tending a cash register, rather than overseeing any aspect of the business.

Companies had hoped that the lower court's position would slow a wave of overtime litigation that has swept the state in recent years, costing firms hundreds of millions of dollars in judgments and settlements. A broad swath of corporate California has been hit, including Farmers Insurance Group, Bank of America Corp., RadioShack Corp., Rite Aid Corp., Starbucks Corp., Taco Bell Corp. and United Parcel Service Inc.

As a result of the high-court ruling, experts said, California businesses can expect a renewed surge of class-action litigation seeking overtime pay.

"There are probably a fair number of these lawsuits waiting in the wings for the court to clarify what the standards are," said Steven Katz, a Los Angeles lawyer who wrote a friend-of-the-court brief for other businesses in the Sav-on case. "Now that that has happened, I think we're going to see those suits being filed."

A spokeswoman for Sav-on, which has about 300 stores in California, declined to comment on the ruling. Rex S. Heinke, a Los Angeles attorney who represented the drugstore chain, said he couldn't comment because the litigation was ongoing.

The California Supreme Court ruling came the same week that new federal overtime regulations took effect. Those rules, which are expected to reduce the amount of overtime paid to workers and reduce litigation, were opposed by organized labor and embraced by the business community.

The federal regulations, however, are expected to have little effect in California, which has its own labor laws.

Under the state statutes, workers who spend more than 50% of their time performing the duties of hourly workers, even if they're called managers, are eligible for overtime pay. Eligible workers who put in more than eight hours a day on the job are supposed to be paid for the overtime at time-and-a-half — 1.5 times their usual hourly rate.

Under federal law followed in most other states, managers may be exempt from overtime pay if their primary duties are supervisory.

The state high court's decision stemmed from a lawsuit brought by two Sav-on managers who contended that the chain misclassified its assistant managers and operating managers as exempt from the state's overtime wage laws.

Lawyers in the case have estimated that 600 to 1,400 Sav-on workers may be entitled to back pay if the lawsuit succeeds.

(emphasis added by me)

Employers have tried to use this trick for decades. First, back in the late 60's, they started giving executives titles in lieu of pay raises (up until then, titles always came with raises attched--you got the raise by earning the title). That worked so well that by the 70's it had come down the food chain: secretaries started to be called 'administrative assistants', even 'executive assistants'--but no raise. In the 80's it got picked up by Wal-Mart who took it right to the bottom: grunts were now 'associates' and told they were 'in charge'--of shirts, toiletries, cat food, whatever.

But it didn't stop there, oh no. Manufacturers tried calling their line workers 'independent contractors', and instead of paying everybody at the same scale, they 'negotiated contracts', hiring the lowest bidders and pitting worker-against-worker. The 'independent contractor' scam had the added attraction that they didn't have to do withholding or pay their share to the unemployment fund: 'independent contractors' were legally considered self-employed and thus responsible for their own unemployment payments. The Duke--Michael Dukakis was Gov then--put an end to that scam, thankfully, but it was just one in a long line of anti-labor tricks designed to push down wages and shove all their responsibilities onto their workers.

That's why the new overtime rules are evil: it took years of lawsuits and investigations and fines to get corporations to quit playing these games on their employees; the Imperial Overtime Decree basically puts us all back to Square One, and we're going to have to fight the same damn battles all over again.

Oops--Poverty Increased Again

For the third year in a row, poverty increased in BushAmerica. Golly whiz, Martha, what a surprise.

Poor and Uninsured Americans Increase for Third Straight Year

By Peter G. Gosselin, LA Times Staff Writer

WASHINGTON — An additional 1.3 million Americans slipped into poverty last year and another 1.4 million went without health insurance, the government reported Thursday.

It was the third year of bad news in both categories and further evidence that the U.S. economy had not snapped back from the downturn of earlier this decade.

The Census Bureau numbers also showed that the annual income of middle-class Americans, which fell in 2001 and 2002, had leveled off last year. Census analysts said the income of households at the center of the economic spectrum was $43,318 in 2003, a statistically meaningless $63 below its 2002 level.

---

Kerry seized on the new numbers as proof that Bush's economic policies had failed. In a statement, the Democratic candidate ticked off trends since 2000 — median household income down more than $1,500; an additional 5.2 million individuals without health insurance and another 4.3 million in poverty.

"While George Bush tries to convince America's families that we're turning the corner, slogans and empty rhetoric can't hide the real story," Kerry said.

In addition, some Democrats charged that the administration had released the Census Bureau's numbers a month early to avoid delivering bad economic news during the fall election campaign. Census officials denied the charge, and some independent observers questioned whether the early release was of much help to Republicans.

It was clearly political--Rove decided it was better before the convention when they have both the time and the forum to do some damage control than it would have been in October when they had neither. But it's also true that it might not make all that much difference either way. Yes, this story will be forgotten by November, but the reality of an economy that isn't creating jobs and isn't boosting incomes will still be with us and will most likely have deepened even more. Their hopes of a bump next month are looking slimmer by the day (Wall Street is awfully shaky after the oil manipulations of this summer), and too much HappyTalk at the convention about how much better everything is could backfire on them.

The Bush campaign countered that the income and poverty numbers painted an incomplete picture by not including the tax cuts championed by the president. In any case, they said, the trends were not as bad as they first appeared.

Uh, they're saying the tax cuts helped us? Let's see. Karlo at Swerve Left has done us all a favor by digging out the numbers, and guess what? The Bush Campaign just told another lie.

The wealthiest 20% of households in 1973 ate up a healthy 44% of total U.S. income, but then gobbled up 50% in 2002 while everyone else's share fell! The bottom fifth's share fell from 4.2 to 3.5%.

According to the Congressional Budget Office, "For the bottom four quintiles, the effective individual income tax rate turns upward in 2004." The current CBO report also states that, "The differential increase in effective tax rates among quintiles is reflected in a shift down the income distribution in shares of taxes paid. The share of taxes paid by the top quintile falls from 65.3 percent in 2001 to 62.8 percent in 2014, even though that group's share of income does not change. Four-fifths of that decline occurs for the top 1 percent of taxpayers, whose share falls by 2 percentage points, to 20.7 percent of federal taxes in 2014. The share of taxes paid by each of the middle three quintiles climbs by about 0.7 percentage points."

As the cheerleaders for our leader are wont to remind us: Things are getting BETTER! For the top fifth of the population, that is.

---

Jim Gilliam (see my links) has the following numbers recently released by the Congressional Budget Office concerning the percentage change in the tax burden by average income:

$1,100,000: -2.1%
$182,700: -0.9%
$75,600: +0.8%
$51,500: +0.2%
$34,200: -0.1%
$14,900: -0.1%

Evidently, when the Shrub folk refer to tax-cuts benefitting the middle-class, they're talking about the average Joe who's making a million a year. It makes me feel good. I ain't so average after all!

So if the Bushies figured in the actual CBO numbers instead of the ones they invented, taxes would have gone up for the most of the people he's claiming saw decreases, and down for the poor an insignificant 1/10th of 1 per cent, which doesn't even begin to meet inflation. I'm at the bottom level. If he thinks $150 extra in my pocket this year is something for him to brag about, he must be riding the white-powder horse again.

Bush made no mention of the figures in three campaign appearances in New Mexico, but campaign aides rushed out "talking points." On poverty: "The poverty rate is still below the average rate of the 1980s and 1990s." On health insurance: "The percentage of uninsured is still below its highest point during the Clinton administration.

Both of those claims are equally false, not that that's going to stop them from being repeated endlessly endlessly endlessly by the Mighty Wurlitzer. Unfortunately they'll be slamming headlong into undeniable realities when they're doing it and convention HappyTalk ain't gonna cut it--not now, and not in November

Labor Dept Does Something--May Be a First

Elaine Chao's tenure at Labor hasn't exactly been known for its aggressive treatment of illegal corporate labor practices, despite the inconvenient fact that that's what it was created to do, and as the head of it, that's her job. She has usually supported whatever lame legal excuse or maneuver corporate attorneys came up with to justify their clients' behaviour, and been exceedingly lax in enforcing labor laws; when she bothered to enforce them at all, it was normally because lawsuits or outside pressure forced her to. So we are only too happy to note that DoL investigators responded to information from a small watchdog group in LA and busted a Target contractor's Wal-Mart-style treatment of its janitors: wages below minimum, a 7-days/wk work schedule, hiring 15 and 16-year-olds as full-time employees, 50 and 60-hr/wk work schedules without overtime, non-payment of taxes, particularly Social Security--you know the drill.

Labor Department Wins $1.9 Million in Back Pay for Janitors
By STEVEN GREENHOUSE

Published: NYT, August 26, 2004

The United States Department of Labor announced yesterday that it had reached a $1.9 million settlement with a contractor for the Target Corporation after finding that the contractor had not paid overtime to hundreds of immigrant janitors who often worked seven nights a week cleaning Target stores.

Several janitors said in interviews that the Target contractor was doing much the same as contractors for Wal-Mart had done before an immigration raid at Wal-Mart stores last October - making late-night janitors work nearly 365 days a year, without paying overtime or Social Security and other taxes.

The Labor Department announced its back-pay settlement with Global Building Services of Newhall, Calif., after a two-year investigation found that Global had not paid overtime to 775 immigrant janitors who cleaned Target stores in California, Arizona, Nevada, New Mexico and Texas.

The Labor Department was tipped off to the violations by a Los Angeles group, the Maintenance Cooperation Trust Fund, that monitors whether employers are breaking the law when they use janitors.

"We investigated 50 Target stores, and we saw that janitors were being paid in cash, a flat rate with no overtime, no payroll taxes, no workers comp," said Lilia Garcia, the trust fund's executive director. "It's a cancer in the industry; too many of these big retailers are using problematic contractors."

Ms. Garcia said her group found that a half dozen of the late-night cleaners were only 15 or 16 years old. She said Global Building Services fired them soon after the federal inquiry started largely because state law bars teenagers so young from working so late at night and so many hours a day or a week. California officials participated in the inquiry.

Last October, federal agents raided 60 Wal-Mart stores in 21 states to arrest 250 cleaners who they said were illegal immigrants. The immigrants were employed by various Wal-Mart contractors, and as at the Target stores, they usually worked seven nights a week and were paid in cash without receiving overtime.

Labor Department officials declined to say whether they were investigating Wal-Mart or its contractors, although Wal-Mart has acknowledged that a federal grand jury in Pennsylvania is investigating whether it illegally cooperated with its contractors to use illegal immigrants as cleaners. Lawyers in New York have filed a class- action lawsuit against Wal-Mart charging various labor violations on behalf of what they estimate are thousands of illegal immigrant janitors.

Felipe Aguilar, who said he cleaned at five Target stores in Southern California, said in a telephone interview: "In my three years there, they gave me very few days off. And when I came back after being out injured for two weeks, the company said, 'We can't take you back. Someone else is working in your place.' "

Mr. Aguilar said that he worked about 80 hours a week, from 10 p.m. to 8 a.m. daily, and was paid $525 or $625 every 15 days. That came to less than $4 an hour, well below the federal minimum wage of $5.15.

His wife, Claudia, who also worked at Target, said, "We felt bad about the pay; sometimes we felt rage, but we were scared to complain because we needed the job."

In a statement, Global Building Services said that after these problems were brought to its attention in November 2002, it cooperated fully with the investigation and changed its pay practices.

"We are pleased that we were able to reach an agreement with the Department of Labor to compensate our employees," Global said. "The company is fully compliant, and we look forward to serving the needs of our retail customers. We feel this is all behind us now."

Uh-huh. How could Global Building Services not know that something on this scale was happening? Don't they handle the paychecks? Didn't they notice the discrepancies, the lack of withholding? If you believe GBS' absurd statement, you probably also believe that Saddam was responsible for 9/11 and the Easter Bunny wears tennis shoes and delivers eggs doing an impression of Tom Jones singing 'Delilah'.

And we must add that while we're all in favor of the Labor Dept actually doing something it wasn't forced to do, we must in fairness note that: a) a $2Mil settlement is peanuts to a company that's handling Target's janitorial services in 5 states--5 huge states--and is hardly going to prevent them doing the same thing again when nobody's looking, so it is effectively little more than the standard wrist-slap; and b) the DoL has yet to charge Target for complicity. It was Target, after all, who hired GBS and then didn't bother to supervise them.

Oh, I forgot--'But we didn't know!' Yeah, right. Ever notice that if you spend 25 cents on paperclips that wasn't authorized, there's a note on your desk from the comptroller the next day? How is that Target can track every expenditure to the penny except what they're paying a contractor? How come if a buyer overpays $2 for an item their job is in jeopardy, but if they're paying a contractor $$$MILLIONS$$$ less than the minimum he should be paying his employees, this they don't notice?

The simple fact is, if you cost them a buck they'll be all over you like white-on-rice, but if you save them a buck, they don't give a damn how you did it. Steal it, extort it, exploit it--they don't know, they don't care, and they'll never ask any questions.

From an old Bob & Ray routine--Wally Ballou (Bob) is interviewing a paperclip manufacturer (Ray) about how he san sell his product so cheap (10 cents a gross):

Wally Ballou: But how can your employees survive on $1.15 a week?

Ray: Oh, we don't delve into the personal lives of our employees. That would be a wanton invasion of their privacy.

Wally: But where do they live? You can't rent a room for a dollar a week.

Ray: Well, I understand a lot of them live in caves in the hills outside town and forage for food. They make their clothes out of tree bark and I've noticed, myself personally, that they don't wear shoes. I call it 'self-reliance'.

That routine dates back to the 50's. Nothing much has changed, it would seem.

A Shortage of Skilled Workers? Really?

This article from today's Washington Post is puzzling. It seems straightforward enough but it's saying things that don't always make sense.

Skilled Labor in High Demand
Employers Lament Declining Ranks of Capable Workers

By Nell Henderson
Washington Post Staff Writer
Wednesday, August 25, 2004; Page E01

David L. Hurley is eager to hire new workers at his Florida surveying company and isn't asking for much: Only a dozen or so people with enough basic math to learn the software he uses to make blueprints, and enough basic sense to show up on time.

But after weeks of want ads and recruiting, he has drawn a conclusion: The workers aren't out there. While there are plenty of people who "can fog a mirror" and might be able to do grunt work on a survey crew for $8.50 an hour, Hurley said the economy has run short of people with the types of basic skills he could mold into a $20-per-hour survey crew chief.

"I would add 15 people tomorrow if I could find them," said Hurley, president of Landmark Engineering & Surveying Corp. of Tampa. "We need people with some knowledge of trigonometry and geometry. It's really just arithmetic. We're turning down work because we don't have the people."

What??!! Maybe it's a regional thing and Tampa is understocked, but there's something odd going on here.

I've been hearing this 'We just can't find qualified people to hire' line for 40 years. It was never true in the past and I seriously doubt it's true now. When employers say shit like that, it usually turns out that there are hidden qualifiers--adjectives they don't say out loud that ought to be in front of the word 'people', like: white, male, or young. Is something like that going on here?

To explain why wage and job growth has remained weak during a nearly three-year period of economic expansion, economists point to a complicated set of dynamics.

Developing countries like India have become increasingly competitive in global markets, offering well-trained workers at comparatively cut-rate prices. American workers have become steadily more productive -- a two-edged sword that makes each employee more valuable but which has largely boosted company profits instead of wages and hiring. The decline of organized labor and the stagnation of the federal minimum wage have helped suppress what workers are paid, say analysts like Harry Holzer, a Georgetown University professor and former chief Labor Department economist during the Clinton administration.

I added the emphasis to make this point: What the fuck do they expect? They've been boosting their profits on our backs: they admit we're more valuable, yet what they're willing to pay for all that extra value has been stagnant for 20 years. On top of that, they've been wedded to a hire/fire strategy in which there's no security at all: when they need people, they hire them--at the lowest possible wage, never mind their skill or how high their productivity is--and in a few months, if business slips, they lay them off again. What incentive is there to get expensive training when a) they won't pay you for what you know; b) they'll lay you off as soon as they figure out how to get somebody else to do your job as well as their own ('productivity'); c) they'll outsource your whole industry first chance they get; d) they'll fire you if business slips even a little; and e) there's no guarantee you won't be replaced by a computer program 6 months after you finally get a job? Do they think we don't know this shit? Do they think we don't understand that this 'shortage' is only temporary and that when it's over we'll find ourselves, like machinests and tool-and-die makers, with skills nobody wants any more?

These 'shortages' come-and-go like fads, and every couple of years employers bitch at us that we were trained for all the wrong things. A few years ago machinists were told to re-train for the lucrative new field of computer technology, so they did. Then--Whoops! Dot-com bubble burst and anyway Indian workers are cheaper. You're fired. There was a shortage last year; there's a glut this year. What's the matter with you? Why didn't you see this coming and get trained for something I can't outsource until next year?

So if this sonuvabitch is actually losing business, wouldn't it be worth his while to train some of those untrained people? Pay for them to take a night-course on geometry and trig? It's not like it's expensive. But no, he's not doing that and it isn't hard to figure out why: by the time they got trained, his business may have changed and he won't need them any more so he'd just be throwing money away.

But an important and potentially worrisome piece of the puzzle can be seen through the experience of employers like Hurley, who contend that low-cost labor in India, China and elsewhere is far from the only thing inhibiting job growth in the United States.

Whether it is in expanding areas like health care or in the beleaguered manufacturing sector, employers say that once they are ready to add to their payrolls, it is often so difficult to find capable workers that positions are left unfilled. Those who have the required skills typically already have jobs, said representatives in a number of industries, while those who are available often aren't qualified. Trade groups and business owners say employers are begging for engineers, machinists, information technology workers, radiology technicians, nurses, health care finance administrators, and even, in an age of computer diagnostics, auto mechanics.

Engineers? Machinists? IT workers? What are they talking about? Those are all areas that have been hit hard by automation and outsourcing. Millions were laid off from those fields in the last 10 years, especially the last 5, and they can't find any? That doesn't make any sense. I have to ask: What are the hidden qualifiers here? What do they really mean? That they can't find people who are white enough, male, or young enough? Or are there new qualifiers? Do they mean they can't find people who graduated from universities instead of community colleges?

Faced with the task of hiring a specialty aluminum welder in Michigan, where troubles in the auto industry have left thousands of blue-collar factory employees out of work, Diane Dearing came up empty.

"It's hard to find skilled people," said Dearing, president of Display Structures Inc., of Troy, Mich., which makes metal parts for trade-show displays.

This woman can't find an aluminum welder in Michigan? Where thousands of highly skilled welders were thrown out of work when the auto plants got moved to Indonesia? That's insane, I don't believe that.

Economists and sociologists have long recognized the dual nature of the American economy -- an $11 trillion behemoth that leads the world in technology, research and innovation, yet with a population that lags nearly a dozen other developed countries in basic literacy and science. American adults rank 12th in literacy among those of 20 high-income, industrialized countries, according to a 2002 study by the private Educational Testing Service; American 12th-graders ranked below the average of their international counterparts in math and science, according to the 1999 Third International Math and Science Study, a project of the Lynch School of Education at Boston College.

OK, now some perspective is starting to kick in: they want people fresh out of school who will work cheap, not older workers who've been downsized and may bring 'attitude' with them--a knowledge of what the job is really worth and maybe a willingness to buck the employer when they see corners being cut or scams being played out on them.

If I sound cynical, it's only because I've been here before. They'll do what they've always done--use us as long as they need us and then chuck us to the wolves and go after a new batch the next time.

I'm not saying there aren't legitimate issues of under-training, poor schooling, and missed opportunities here. But the responsibility isn't entirely ours. There was a hard-won social contract--an agreement--between management and labor for 50 years that management has abrogated consistently since 1980. They stole our pensions, cut our pay, moved our jobs offshore even when we were making huge profits for them, replaced us with machines even when the machines cost more than we did and couldn't do the job as well, voted for people who promised to cut the safety net out from under us, voted for people who destroyed the educational system in the name of 'tax relief', and in general treated us like cannon-fodder that could be used and thrown away, and now they're bitching because at the moment they need us and we don't know what they need us to know?

Bullshit.

Overtime cut undermines workers

JOHN SWEENEY
SPI GUEST COLUMNIST

Yesterday, the biggest pay cut in American history took effect: The Bush administration's overtime pay cut became official. It's a new federal rule that could strip up to 6 million workers of overtime pay protection, forcing them to work longer hours without fair compensation.

Nurses, police lieutenants, chefs, team leaders, working supervisors, assistant managers and financial services workers are just some of the millions of workers who used to earn overtime pay when they worked more than 40 hours a week -- and who will now lose that eligibility.

Not only will these employees no longer get overtime pay -- they'll be working extra hours for free, earning only their base salary. That means a huge pay cut. Currently, time-and-a-half premium pay for overtime work accounts for 25 percent of the income of those who work overtime. That averages out to about $161 every week.

And what incentive will employers have to keep workers' hours reasonable if they don't have to pay extra for extra work? Workers without overtime pay rights are twice as likely to work more than 40 hours per week, three times as likely to work more than 50 hours and three times as likely to work more than 60 hours. The fact is that workers will have less time with our families, thanks to President Bush's new overtime rule.

These overtime rules are also bad news for our economy -- at a time when we can least afford it. Our nation is already in a deep jobs hole; we have 1.6 million fewer jobs than when Bush took office.

Last month, experts were disappointed when the economy created only 32,000 jobs as opposed to the 200,000 expected. Under the new rule, employers will tend to work their current workers longer hours rather than creating new jobs, making the underlying problems in our economy even worse. At a time when workers' paychecks are down, joblessness is up and Americans are working more hours than workers in any other industrialized nation, Bush has made the wrong decision in implementing his new rule.

Even three former Department of Labor officials -- three of the highest-ranking DOL officials under Presidents Reagan, Bush and Clinton -- agree that these new overtime rules hurt workers. They have issued an analysis that concludes that with one exception, every one of the administration's changes to the overtime rules will weaken the eligibility requirement and increase the number of workers who will lose their overtime rights.

This new rule was sold as "modernization." But the truth is these are changes in the law that giant corporations have fought for years to win.

A number of low-income workers will gain overtime pay rights under the new rule, and we applaud this long-overdue change. But this gain does not justify the Bush administration's decision to take overtime pay rights away from millions of other workers, a move bipartisan majorities of Congress tried to block.

Last May, the Senate voted not once but twice to guarantee that no worker will lose his or her overtime rights. The two amendments passed by the Senate, we believe, would repeal large portions of the Bush regulation that restrict overtime eligibility. This marks the fourth time in the past year that Congress has voted to prohibit overtime pay cuts.

But the overtime guarantee passed by the Senate is unlikely to become law unless approved by the House. This explains why the House Republican leadership has blocked any debate or votes on protecting workers' overtime rights -- because they know that an overtime guarantee would likely pass in the House and would repeal major portions of the Bush overtime regulation. U.S. workers deserve an up-or-down vote in the House on this issue when Congress returns in September.

An overtime guarantee would give workers the peace of mind of knowing they will not be losing their right to overtime pay, and it would calm the intense political passions that have been stirred by the Bush plan. Anything less is simply a massive pay cut for America's workers.

John Sweeney is president of the AFL-CIO, which represents 13 union members.

Bush Talks to Workers--Only the Workers Aren't There

Presumably you already know about the loyalty oaths the Bush Campaign is demanding before you're allowed to hear him speak, but here's something you might not be aware of: those speeches he's been making to 'workers' at plants in the MidWest? Well, um, the people who work in those plants weren't there.

Picking the Right Audience

By Dan Froomkin
Special to washingtonpost.com
Wednesday, August 18, 2004; 11:34 AM

President Bush is off on a bus tour of Wisconsin and Minnesota today, his last campaign swing before a week's vacation at his ranch in Crawford, Tex.

There's been a lot of attention focused lately on how willing his campaign is to allow non-loyalists into his events.

Yesterday, in Pennsylvania and West Virginia, both campaign events were invitation-only, as usual.

When he spoke at a Boeing Co. plant outside in Ridley Park, Penn., you might have been forgiven for thinking that he was actually speaking to Boeing workers. But, just like when he spoke at a union hall in Las Vegas last week, the room was filled with invited guests. Workers had the day off.

And that wasn't the only one.

Kell said a presidential visit is definitely disruptive to the everyday operations of a major manufacturing company.

"We have informed the employees of the honor and have let them know that we will be closing the plant on Wednesday to accommodate the president," Kell said.

The employees have volunteered to work different hours to assure work gets done as usual.

Don't you love the word 'volunteered'? Like they had a choice. So the workers were home, presumably sleeping in preparation for working all night. I'm sure they were just thrilled.

But it gets better. In Chippewa Falls, WI, Bush spoke at a plant that was closed because the jobs had all been shipped to China.

When President Bush rallies his supporters in the suddenly critical hinterland of western Wisconsin today, Dave Dressel and Roxi Sharp will not be among the throng.

That's because they are painful reminders -- along with hundreds of other men and women who have lost good jobs in Chippewa Falls -- of trouble.

Dressel and Sharp used to work next door to the cardboard-box plant where Bush will speak today, in the factory of Mason Shoe Manufacturing. Mason is the nation's largest catalog seller of shoes and work boots, and sells millions of pairs a year from its Chippewa Falls distribution center, a cheerful fact that may merit a mention from the president today.

But the president is unlikely to add that no shoes are made in Chippewa Falls anymore.

Mason's good ol' American shoes are made in China now, on the same machines that used to hum and whir -- and support families -- in Chippewa Falls. Last Oct. 31, in a Halloween prank that wasn't funny, Mason ended its Chippewa Falls manufacturing, just months before the firm's 100th anniversary.

Don't be gulled by the American flags that still adorn Mason's "Work America" boots or the stirring corn pone on the company Web site bragging that Mason provides "fine-quality footwear to men and women across this great land of ours."

Unless you can say "this great land of ours" in Chinese.

Dressel, 53, was a maintenance worker. It fell to him and a handful of others to unbolt hundreds of expensive U.S.-made machines and pack them in custom-built oak crates for shipment to China. He didn't like being an undertaker.

"It made me feel pretty bad, crating up all those machines I worked on for 31 years," Dressel says. "They gave us the dimensions for each machine, so we could build the crates out of special lumber -- all treated-oak lumber -- with each pallet built to an exact size. It wouldn't have seemed so bad if they had just closed it down and left it at that. But moving it to China?

"That was just telling us they didn't want us anymore."

---

The last 100 workers laid off last fall got two weeks' pay and medical insurance for each year of work. The money and the medical are starting to run out now, and life isn't quite as great in this great land of ours for many of the people who lost their jobs. Some of them are now working for Wal-Mart in Menomonie, 30 miles away, without the benefits and wages they used to earn. Many are still looking for new jobs.

Dressel, who has a history of heart trouble, is wondering what to do next. "Going back to school is probably not a bad idea, but there's not a lot out there for a guy who's going to be 54," he says.

Roxi Sharp, who worked 15 years at Mason, has decided she wants to be part of America's bright future as a worker in the service industry. In other words, she's going to wait tables.

"I don't want to do factory work again -- you can't count on it," says Sharp, 43. "But they always need a waitress somewhere."

Sharp has a 10-year-old daughter and has been drawing unemployment since her severance ran out in May. She and her husband divorced recently, and he may be able to cover their daughter with medical insurance. Waitresses don't get health insurance, but if she's lucky, Roxi will have to worry only about herself.

"I hope I don't get sick," she says. "Closing the plant was a real kick in the ass. I have a girlfriend who has had three jobs since then. But management? They don't care about the workers. The more people they got rid of, the more money they got."

That's not the kind of happy talk America wants to hear.

So no, you won't hear Roxi Sharp at the president's rally today in Chippewa Falls. The economic disaster that befell her and Dressel and the others is last year's news, and this campaign is about the promise of a bright, better future.

Wiping food spills off of table tops.

(emphasis added by me)

Is it too much to ask, do you think, that if Bush is talking to workers, there ought to be some there for him to face? I guess it is. Between sending them home and speaking in a factory that's no longer operating because everybody's been outsourced, it seems that there wasn't a single actual working-class stiff present at any of those events.

But don't despair. One worker did manage to sneak into a Bush rally in West Virginia. He even spoke up--and was not only promptly hustled out, he was just as promptly fired. For 'offending a client who provided tickets to the event.'

CHARLESTON, W.Va. - A man who heckled President Bush at a political rally was fired from his job at an advertising and design company for offending a client who provided tickets to the event.

The fired graphic designer said Saturday he won't try to get his job back.

"I'm mad less about losing the job — I'm more mad about the reasons," said Glen Hiller, 35, of Berkeley Springs. "All I did was show up and voice my opinion."

Hiller was ushered out of Hedgesville High School on Tuesday after shouting his disagreement with Bush's comments about the war in Iraq war and the search for weapons of mass destruction. The crowd had easily drowned out Hiller with its chant: "Four more years."

"He surrounds himself with people who support him," Hiller said of Bush. "Your opinion ... is viewed as right or wrong."

When he showed up for work at Octavo Designs of Frederick, Md., the following morning, he said he was told he'd embarrassed and offended a client who provided tickets to the event — and that he was fired.

The client was a public relations worker who represents the Berkeley County school district, he said. "It's just bizarre that you disagree with them and it all turns evil," Hiller said.

'Bizarre' is SOP in BushAmerica. A few more years of this and you won't be able to tell the difference between the US and Argentina circa 1975.

Welcome to the Monkey House.

(Links thanks to Tom Engelhardt at TomDispatch)

Prescription Drugs in America: A Daughter Turns Smuggler

This is a personal anecdote, it's true, but it's a story that is being replicated by the millions every day. The Bush Administration's fawning over the heavily-contributing pharmaceutical industry has made America into a Third World country where everyone except the very rich may have to break the 'laws' that govern drug sales in the US if they want to keep sick relatives from dying. The FDA, originally intended to protect us from dangerous or poorly manufactured drugs, has become under Bush the profits-protector and dogsbody of the pharmaceutical industry, cracking down on Americans trying to find alternate foreign sources for drugs they can't afford to buy legally here.

The new drug my father's oncologist was prescribing for him was well known to me (for legal reasons, I will omit its name and the manufacturer's name), for it had a fearsome reputation from decades earlier. How expensive could this drug be, I wondered, when all the research and development had been done 40 years ago, at a fraction of the modern costs? A hell of a lot, was the answer. I still don't know why. But in my father's case, it was about $47,000 a year, with the potential to triple, based on his clinical response, to $141,000 a year. At this rate, in seven years, he could conceivably have spent a million dollars. Although he had profited from decades of employment in North America, he had not profited well enough to pay for that, and he was realistic enough about his medical future to resist becoming "spent out"—the current jargon for those who have anted up all in pursuit of staying alive—leaving him and my mother financially ruined (at which point, ironically, they would have been eligible for free drugs).

Like millions of frustrated others, I turned to the Internet, hoping to find some way of acquiring what my father needed. There was a whole cadre of us out there, I learned, seeking drugs for ill parents, or spouses, or children. There were those looking, and those giving—including the survivors of the deceased, who were willing to pass along the remnants of no-longer-needed prescriptions.

This was new to me, this drug-recycling, and sadder perhaps than the need to go outside the US to find affordable medications. The idea that in the United State of America, the richest and most powerful country on earth, its citizens--and not just the poor--are being reduced to stockpiling old, left-over prescriptions in order to pass them on to others who cannot afford to pay the outrageous prices drug companies charge for them, almost made me cry--and scream in rage at the same time.

I know what this means. It means going through the drawers and the medicine chest and the bedside table of a deceased relative after the funeral, and then checking the wastebaskets for what might have been thrown away and the closets and pockets and nooks-and-crannies where medicine may have been left and forgotten in the last days. It means knowing that someone's life may be saved by your doing this, yes, but it also means understanding that someone else may die who doesn't have to if you don't.

Think about that: people are conceivably dying in America because bereaved survivors either don't know of the need or can't bring themselves in their grief to separate a loved one's drugs into what is useful and needed and what is not. In other words, someone is dying because someone else isn't picking through the trash of one who has passed. Like vultures, we have been reduced to feeding off the leavings of the dead. I'm having a hard time getting my head around that.

Upon my father's retirement in 1991, he automatically became covered by Medicare and chose to purchase supplemental AARP hospitalization insurance. He decided against the supplemental prescription-drug insurance because, as he later told me, he could not conceive of any drug costing enough to justify paying $2,400 a year for it. For me, one of the more painful aspects of our predicament was the fact that my father, a son of the Depression and of World War II, prided himself on always being prepared for the bleakest prospects the future might deliver. But not even his darkest imaginings could prepare him for the breathtaking ascent in the price of drugs—costing Americans $213.4 billion in 2003—which he regarded as a personal failure of his preparedness skills.

Because more than a third of Medicare patients have no prescription-drug benefits, Congress enacted the Medicare drug bill last December, at an estimated cost of $400 billion over the next decade. In the weeks following its passage, it became a matter of morbid curiosity to me to assess whether or not the new law would have solved my father's problems. If he had survived, here is what he might have looked forward to: After paying a $420 annual premium, plus a $250 annual deductible, the government would have covered 75 percent of his prescription costs up to $2,250; he would then have been responsible for all payments up to $5,100, at which time the government's catastrophic aid would have kicked in, paying 95 percent of his drug expenses. So I estimate that he would have been responsible for $6,115 of his $47,000 cancer drug. Would he have paid that much? I can't say for sure. Locked into a fixed income that was in decline along with the stock market, he might have decided against it. (emphasis added by me)

She's probably talking about a pension plan, but that is what the next generation can look forward to if the Pubs go through with their plans to privatize Social Security--people will live or die, literally, based on how well their retirement stock portfolio is doing--if they have one.

If he had been a middle-income senior with modest drug costs, he would probably have fared no better and might have ended up paying more in annual premiums than his drugs cost. If his expenditures had fallen into the "doughnut hole," between $2,250 and $5,100, he would have found little relief. Ironically, his worst-case scenario under the new plan would have been a complete reversal of what had been the best-case scenario, i.e., a retiree who still enjoys employer-paid health coverage. Such people were once the lucky few; but under the new legislation, all 3.8 million of them stand to lose that coverage entirely. And those whose new Medicare drug bene-fits will be provided via privately run programs could find themselves denied expen- sive drugs, say, ones that cost $47,000.

So who will fare well? Doctors and hospitals will get a boost, because a scheduled cut in their Medicare payments has been eliminated. The insurance companies will receive new subsidies designed to encourage them to cover seniors and the disabled. But the really big winners will be the drug companies, who are estimated to see a 9 percent increase in sales, or $13 billion in additional profits per year.

Hard as it may be to believe, that estimate is low--I've seen some reasonably reliable reports that project as much as twice that. The final numbers, according to one study, may depend on how many families choose bankruptcy over death--and how many of the dying choose 'death with dignity' over turning their loved ones into paupers in order to enlarge the already obscene profits of drug corporations.

It's a long article I can only excerpt, but I urge you to read the rest of the story of what this woman went through trying to find the drug that would keep her father alive. It's a sobering account of the fight we will all one day face if the drug corporations aren't brought to heel. Along the way, she debunks the 'R&D' argument drug corporations use to justify their prices (predictably, they spend more than twice as much on marketing as they do on research--$45Billion to less than $20Billion for R&D) and describes the hoops the FDA made her jump through in order to satisfy the Corporations that her 'need' was genuine. It's a terrifying picture of what happens when govt is 'friendly' with Big Business--they work together to give the rest of us the shaft.

I will leave you with this:

We had already tried this—back in the beginning—following the advice of one of my father's doctors, who suggested that we need not be "entirely truthful" as to his financial situation on the application. So we lied, but only a little, and were rejected. Now, a year later, we would try again, and I was prepared to be utterly ruthless this time. It did not feel like stealing because, in all honesty, I didn't feel bad about milking a company so willing to do the same to us.

---

In response to the high prices, a few states and municipalities are beginning to flex their bargain-hunting muscles too. Springfield, Massachusetts, is reimporting drugs from Canada for its city employees. Burlington, Vermont, plans to follow. Boston announced it will do so for 7,000 employees and retirees, saving an estimated $1 million a year. New Hampshire plans to reimport for its prison population and Medicaid patients. Initially, the U.S. government seemed to take this trend in stride. But last December, when Illinois announced its plan to save $91 million by reimportation, Governor Blagojevich was warned by the feds that such a move would be illegal. "Our law is very specific," said a government spokesperson. "It's not 'will not.' It's 'cannot.'" And drug companies are also being aggressive: GlaxoSmithKline warned Canadian pharmacies to stop selling to Americans or their supplies would be shut down.

In the wake of this anarchy, a few in Congress are re-examining a bill sponsored by Rep. Gil Gutknecht of Minnesota that would allow reimportation from FDA-approved facilities in 25 industrialized countries and employ technology to prevent counterfeiting. But if the pharmaceutical industry gets its way, such legislation will die—turning an increasing number of sick and desperate Americans into outlaws, or forcing them into early graves.

Meanwhile, my contact information floats in cyberspace, and I continue to get requests from the others out there with first names only who are looking for the same drug my father once used. I am more than happy to tell them what I know, how to work the system, how to break the law. "Thanks so much!" one contact responded. "(And thank goodness for email and the wonderful network of caring people such as you.) This is terrific information! Until the FDA comes to its senses, it seems that those overseas are truly our friends."

Bush Overtime Rules Start Today

Governing by Imperial Decree has its advantages: if people don't like it, there's not much they can do except bitch. You can't go to your elected representative because s/he doesn't have anything to say about it--Imperial Decrees aren't subject to legislative approval. They aren't even subject to legislative input. Imperial Decrees are top-down, 'We dictate, you obey' orders, and Bush loves them. What little he's done as president has been done with Imperial Decrees like this one.

In essence, the hundreds of pages of new rules redefine the criteria for which administrative, professional and managerial workers qualify for overtime, among them nurses, chefs, pharmacists, funeral directors, claims adjusters and restaurant managers.

Senator John Edwards, the Democratic vice-presidential candidate, devoted his political party's weekly radio address on Saturday to assailing the new rules, making clear that the Democrats view them as an issue to exploit when many Americans are worried about the economy and stagnating wages.

"Why would anyone want to take overtime pay away from as many as six million Americans at a time when they need that money the most?" Mr. Edwards said. "And why would anyone support this new rule which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year?"

That follows attacks by Senator John Kerry, the Democratic presidential nominee, who said last month, "The new overtime regulations represent a shameful assault on the paychecks of hard-working Americans at a time when they are already putting in more hours, paying more for everyday costs and saving less than ever before."

To turn up the volume on the issue, the A.F.L.-C.I.O. says it will hold a news conference today and will distribute several million fliers saying Mr. Bush has given its corporate friends a gift that will cut the paychecks of millions of Americans.

The administration asserts that the new regulations are needed to replace vague, outmoded rules that have spurred many lawsuits as employers and employees tussle over which workers are exempt and which are not. The administration argues that the overtime rules are clearer, will be easier to enforce and will reduce expensive litigation that hurts business and the economy.

"We view this as a step in the right direction for bringing clarity and certainty to this area of the law so there can be greater compliance," said Alfred Robinson, director of the Labor Department's wage and hour division. "And that's good for employers and employees. I'd rather focus on that than the spin and the politics."

So making the rules 'clearer' required cutting the pay of employees?

Critics of the new rules say they are another example of the Bush administration's taking regulatory steps that please businesses, which have lobbied for years to revamp the overtime regulations.

The Economic Policy Institute, a liberal research group, has issued a report, which many Democrats have relied on, concluding that the rules will exempt about six million workers from overtime coverage. Among those, the institute said, are 1.4 million low-level salaried supervisors, 130,000 chefs and sous-chefs and 900,000 workers with graduate or college degrees who will now be considered professional employees.

The administration has accused the institute and the A.F.L.-C.I.O. of engaging in a partisan campaign of misinformation on the issue.

Senator Tom Harkin, an Iowa Democrat who has failed in repeated attempts to win passage of a bill to roll back the rules, said he would introduce new legislation to try again.

"This strikes right at the heart of a fundamental labor right," Mr. Harkin said. "These vague regulations will hurt rather than help Americans with their overtime pay, while the administration's public posture is all smiles and happy talk."

Somebody must have missed a memo because I can't imagine why Karl didn't make sure this was announced Friday. On a Monday, people might actually be paying attention and that's bad for Bush. It's always bad for Bush when people pay attention.

The new rules set forth criteria, like what responsibilities supervisors have and whether they have the power to hire and fire, to determine who is eligible.

The rules largely exempt workers earning more than $100,000 from overtime pay, although those with union contracts calling for overtime will continue to be eligible.

Three former Labor Department officials under President Bill Clinton and the first President Bush concluded in a report that the regulations would hurt American workers. The A.F.L.-C.I.O. financed their study, but the three authors, led by John Fraser, former director of the wage and hour division, insisted that they were independent.

Mr. Fraser called the rules "a very big deal." Their report said that but for a provision involving very low-paid supervisors, every change the Labor Department made had expanded the reach and scope of rules that exempted workers from overtime coverage.

(emphasis added by me)

Every one but one, huh? Golly, I guess when you 'clarify the rules', you have to give employers even more power to abuse and underpay their employees, huh?

Just for the record: The rules could have been clarified in favor of employees just as easily. Answering the charge of unfairness by touting clarification is apples and oranges--one has nothing to do with the other, which almost certainly means that 'clarification' is pure spin that bears no relation to the real reason the rules were written they way they were.

A Daring Approach to Lowering Employee Health Care Costs: Do It Right

Here's something you don't see every day--and may never see again: in response to the prodding of a dedicated and persuasive doctor--and their own terror that their workers might join a union *gasp*--a coal company in Wyoming has developed a health care system that is concentrated more on effectiveness than efficiency--and it's working. Sound implausible? Read on.

Maverick Health Plan Ups Quality to Cut Cost
Wyoming mining firms save by getting workers top care from the start, rewarding providers.

By Vicki Kemper, LA Times Staff Writer

GILLETTE, Wyo. — In the open-pit mines of the Powder River Basin, trucks and shovels the size of buildings work around the clock in a computer-choreographed ballet to move the coal that generates one-third of America's electricity. It's a grueling, hard-nosed business, with little room for dreamers.

Yet in this unlikely environment, retired surgeon David Crowder launched a small revolution about a year ago that could stand some conventional healthcare wisdom on its head.

His prescription for skyrocketing health insurance costs: Instead of focusing primarily on belt-tightening and gate-keeping, give employees the highest-quality medical treatment right from the start — and reward providers for doing a superior job.

A droll, self-taught consultant operating in a world of MBAs, policy experts and national human-resources firms, Crowder, 59, says his approach can deliver better care at lower prices for employers and employees alike. What's more, he believes that giving hospitals and doctors a financial incentive to get more effective as well as more efficient can help stem the rising tide of Americans priced out of health insurance.

So far, his strategy appears to be working for the two mining companies — Foundation Coal West Inc. (until recently a subsidiary of RAG American Coal Holding Inc.) and Powder River Coal Co. — that hired him to lower their health insurance costs and keep workers satisfied enough that they would not join a labor union.

Crowder's focus on quality as a means to achieve savings is not entirely new. About 150 large corporations that make up the Leapfrog Group, for example, have been working almost four years to establish a system of objective standards and rewards that would improve the quality and affordability of healthcare.

But what Crowder and the coal companies are doing goes beyond such efforts, health policy experts say.

"How unique is this?" asks Len Nichols, vice president of the private, nonpartisan Center for Studying Health System Change. "Pretty darn."

It's a multilayered approach. Crowder and the mines give doctors and hospitals incentives to release information about their performance. Then they use the information to objectively identify the highest-quality healthcare providers. Following that, they give workers a financial incentive to use those providers. "This is critical," Nichols says.

"That's clearly 21st century, and most of the country is still in the 20th, if not the 19th," says Nichols, who met Crowder this year at a health-policy conference in Washington, D.C.

---

Granted, the program is barely a year old and relatively small, covering 1,700 Wyoming miners who work for Foundation Coal and Powder River Coal, their 4,600 family members and about 600 retired miners and spouses in Utah, Indiana, Illinois and Pennsylvania.

Still, Nichols and others believe it has valuable lessons to offer as insurance costs put coverage out of the reach of increasing numbers of Americans and their employers.

The number of uninsured Americans has risen steadily to 43.6 million, while the proportion of Americans younger than 65 who have employer-provided health insurance has slipped from 67% in 2001 to 63% last year, according to a new report by the Center for Studying Health System Change.

Last year, American employers saw their health insurance costs per worker increase by about 10%. And that was after they tried to control spending by reducing benefits and requiring employees to share more of the costs.

Crowder's clients tried the same things before bringing him on board. Foundation reduced its payment for employees' healthcare premiums and bills from 100% to 80%. Later, it raised the family deductible on its basic health insurance plan, increased co-payments for prescription drugs and began promoting a catastrophic plan with a $6,000 family deductible.

Health costs climbed anyway. Last year, before Foundation Coal hired Crowder to work on a monthly retainer of $4,300 and fully implemented his strategy, the company's per-employee health benefits costs rose 31% — to $10,749.

This year, things have begun to turn around. Foundation has not pushed new increases in workers' costs or trimmed its benefits, which are well above the national average.

It has increased the share it pays for miners and their families if they use hospitals designated as "centers of excellence," yet its per-worker costs have inched down 2.5%.

Meanwhile, costs continue to rise nationwide by nearly 10% annually.

Powder River Coal declined to give details on its experience, but Crowder says it is following the same strategy as Foundation Coal and seeing similar results.

(emphasis added by me)

Startling, isn't it? Advocates of real health care reform--not the ones whose idea of 'reform' is lowering costs without regard to its effect on workers' health but the ones who can see further than the ends of their noses--have been saying for years that 'effective' health care is cheaper than 'efficient' health care, which often sacrifices health by refusing to intervene early enough or heavy enough. The HMO system took over from the old on-demand system largely because a few huge non-profit HMO's (notably one in Oregon) demonstrated that early intervention and focused treatment was a lot more cost-effective than emergency treatment at a late stage when intervention modalities had to be extreme (and extremely expensive) as well as scattershot.

'Prevention' was an idea whose time had come, and the HMO system took over the American health care industry. Experienced HMO providers, however, warned at the time that Health Maintenance depended on providing services that were, by their very nature, not conducive to huge profits: early intervention meant using simpler and less expensive treatment modalities with low profit margins. A couple of for-profit HMO's of that pioneering time had done well but only because they had down-shifted their definition of what 'doing well' meant--they went back to the primordial benchmark from the less greedy pre-Reagan days and defined a 7-10% return as an acceptable profit margin.

As the new batch of strictly-for-as-much-profit-as-they-could-squeeze-out-of-cutting-services HMO's took control, those warnings weren't just ignored, they were actively undermined when HMO 'entrepreneurs' made outrageous promises to their investors of 20-30% profit margins and sky-high dividends. The only way they could hope to redeem even a fraction of those promises was to ruthlessly cut needed services in the name of 'efficiency' while at the same time extorting or defrauding health insurance providers, especially Medicare and Medicaid, by upping hidden charges and raising prices. It's no accident that at the same time HMO's began taking over hospitals, those hospitals started charging $50 for 20 cents worth of aspirin, or that emergency care stats rose alarmingly due both to the number of uninsured who had to use emergency rooms as their primary care provider and the number of insured whose condition was allowed to worsen to the point of breakdown because their HMO had refused to pay for tests that would have picked up their ailment earlier or refused to pay for earlier treatment because their 'intervention guidelines' were focused on late treatments like surgery.

Essentially, what Crowder has done with the two coal companies is return to the original methods the early HMO's proved were successful: do it right to start with. Intervene early, offer the best possible care, reward providers for keeping your employees healthy rather than for refusing them treatment. One doesn't dare to assume in the Bush Age, when everything from war to disease is defined by its potential to generate corporate profits, that the message of this success story will penetrate the wall of greed that has built up around health in this country, but one can always hope that some sliver of it might affect decision-making at some point. Dreams don't cost anything, after all. Yet....

Private Health Insurers Balk at Bush Privatization

The soft underbelly of Junior's blazing desire to kill Medicare (which he derisively labeled 'socialized medecine' in his younger days) by privatizing it has always been his assumption that private insurers wanted all of Medicare's business. In point of fact, they don't--they want to cherry-pick the profitable Medicare population and let the unprofitable one go fry. This week, they let him know how unhappy they are.

Insurers Object to New Provision in Medicare Law
By ROBERT PEAR

Published: NYT, August 22, 2004

WASHINGTON, Aug. 20 - A major obstacle to the success of the new Medicare law has emerged in recent weeks: private insurers have told the Bush administration that they will not expand their role in Medicare if they have to serve large multistate regions, as the White House wants.

Congress sharply increased payments to private health plans last year in the hope that they would serve many more Medicare beneficiaries.

But the Blue Cross and Blue Shield plans, the backbone of the nation's private health insurance system, and other insurers said it was not feasible for them to establish networks of doctors and hospitals spanning large regions like New England or the Midwest.

They want the government to designate 50 regions, one for each state. That is the preference stated emphatically, in separate letters to the Bush administration, by the Blue Cross and Blue Shield Association and by America's Health Insurance Plans, the chief lobby for the health insurance industry.

A White House document describing President Bush's ideas for overhauling Medicare in March 2003 proposed "large multistate regions,'' and it included a map showing 10 sample regions.

Large regions will force health plans to serve rural areas that they have historically shunned, administration officials say. Under this logic, if a health plan wanted lucrative Medicare business in Chicago and its suburbs, it would have to serve rural Illinois and Iowa and perhaps Nebraska as well.

But Alissa Fox, policy director for the Blue Cross and Blue Shield Association, said, "The only way to assure vibrant competition and expand choices for beneficiaries is to establish 50 state-based regions.''

If the administration insists on multistate regions, Ms. Fox said, "it will be virtually impossible for most private plans to be ready for 2006,'' when drug benefits and new insurance options are supposed to become available. The level of financial risk increases with the size of a region, she said, so insurers will need more capital and larger reserves to operate in a multistate region.

Diana C. Dennett, executive vice president of America's Health Insurance Plans, said her group also "strongly supports establishment of 50 regions.''

Private plans will be discouraged from participating in Medicare if they have to get insurance licenses and sign contracts with doctors and hospitals in nearby states where they have never done business, Ms. Dennett said.

"In many rural areas,'' she said, "providers are unwilling to contract with Medicare managed care plans,'' even at the rates paid by the traditional fee-for-service Medicare program.

Several private plans are available to Medicare beneficiaries in the Boston area, for example. But, health policy experts say, those plans do not have contracts with doctors and hospitals in remote parts of New England.

The new Medicare law envisions a huge role for private plans, starting in 2006. If beneficiaries stay in traditional Medicare, they can get subsidized drug coverage by buying private insurance policies that cover prescription drugs and nothing else. Alternatively, they can join a preferred provider organization or a health maintenance organization that covers drugs along with doctors' services and hospital care.

The government must decide by Jan. 1 how to define the regions. Insurers say the configuration of regions will have a major effect on whether they participate.

Given that the health care industry (if you include pharmaceutical companies) is Junior's second biggest contributor after energy and that they're making a blatant attempt to blackmail the Bush Administration in an election year, I'm taking bets on how long it will be before the rule is changed to sell rural areas down the river and give the industry what it wants. But I gotta tell yah, anything over a month is a sucker bet, and anything over a week or two is going to have long odds. Your call. (I was going to bet that the rule change change would be announced on a Friday afternoon, but at this point that's a gimme.)

Bush Edict Lets Banks Off the Hook

Endangering Community Development

Published: NYT, August 21, 2004

The Bush administration, which has already hobbled programs that provide housing subsidies for the poor, is undermining the Community Reinvestment Act, the most successful community revitalization program in the nation's history. The act requires banks to lend, invest and provide banking services to poor communities. So far, it has made more than $1.5 trillion available, much of it to developers and nonprofit groups that build affordable housing for the elderly and disabled people, as well as to medical clinics and other projects that would never get built if they were left to the private sector.

Thoughtful critics in the banking community have a point when they argue that the program needs updating and simplification, so that investments are targeted more effectively and banks have less difficulty complying with the act. But two of the federal agencies that oversee the banking industry have proposed a drastic change that could allow more than a thousand banks to back away from their community development obligations, leaving consumers in many states with worse banking services, and the communities themselves devoid of badly needed development projects.

The proposals are aimed at reducing the regulation of smaller banks, which have always thought that the return on community investments is too small and that the administrative costs of complying with the act are too high. The current law requires large banks to be evaluated on what is commonly known as the "three-part test": how they lend, invest and provide services in their communities. Small banks - those with assets of $250 million or less - are evaluated on a less stringent basis. But under new rules promulgated by the Office of Thrift Supervision, which oversees savings and loan associations, those more relaxed standards would apply to S.& L.'s with assets up to $1 billion.

The Federal Deposit Insurance Corporation, which oversees thousands of banks, is proposing the same adjustment. The government should update the regulations to make it simpler for banks to comply. Nobody likes red tape. But the Bush administration has a way of presenting a major policy change as a minor effort to tidy up cumbersome rules. Banks should not be allowed to jettison community reinvestment responsibilities - which occupy a tiny fraction of banking assets - in the quest for profit. If these new regulations are allowed to stand, the loss of C.R.A.-driven investments could be significant in some states, like Alabama, Florida, Idaho and New Hampshire. Communities could eventually find themselves back in the dark ages of redlining and financial isolation.

United 'Likely' to Cancel Pensions

By James F. Peltz, LA Times Staff Writer


United Airlines, moving closer to a cost-cutting change feared by employees and retirees, said it probably would cancel its pension plans in hopes that the move would help the carrier emerge from bankruptcy proceedings.

"This is not good news," said Redondo Beach resident John Givens, 58, a former United reservations director and union official who retired last year.

United, a subsidiary of UAL Corp., already has stopped making contributions to its four pension plans. They are $8.3 billion short of what would be needed now to fully fund future retiree obligations, according to the Pension Benefit Guaranty Corp., a federal agency that insures corporate pension plans and stands to inherit United's obligations if the airline scraps its plans.

The pension agency estimates that under federal law it would be liable for $6.4 billion of the four plans' total deficit — leaving a $1.9-billion shortfall for recipients. That would make it the largest pension-plan failure.

In a Bankruptcy Court filing Wednesday, United said that because it was so short of cash, "termination and replacement of United's defined-benefit pension plans likely will be required" if it hopes to raise the new financing it needs to get out of bankruptcy.

"Let there be no mistake: United would like nothing more than to keep the pension plans intact," the filing said. But doing so would require more than $500 million in pension payments over the next two months alone, "and dig an even deeper hole for United."

No final pension decision has been made, the carrier said, adding that it "remains willing to consider any alternative to pension termination."

Once again, although it's management that made the bad decisions, it's damn sure not management that's going to pay for them.

And the beat goes on.

Kerry Links Jobs and Health Care Costs

By Matea Gold, LA Times Staff Writer

DERRY, N.H. — Sen. John F. Kerry assailed President Bush on Thursday for the state of the nation's healthcare, saying that spiraling healthcare costs had slowed the growth of jobs.

To support his charge, the Democratic presidential candidate cited a study he commissioned that found some employers that offered extensive healthcare plans had cut full-time jobs to save insurance costs. With the study, Kerry sought to link two of the campaign's key domestic issues — the job market and healthcare.

"It doesn't take four years to understand that people are getting crunched by the cost of healthcare," he said at a gathering outside a Colonial home in a neighborhood here.

According to the study by Laura D'Andrea Tyson, President Clinton's onetime top economic advisor who now is dean of the London Business School, and UCLA professor Sarah Reber, U.S. industries with the best health benefits reported significant job losses between 2000 and 2002.

Tyson and Reber said rising healthcare premiums caused these employers to scale back their hiring.

"Many have begun hiring more part-time employees and temporary employees, without any benefits, who often don't get health insurance at all," Kerry said during a speech in Boston shortly before his appearance in Derry. "You tell me: Is that the kind of economy we're trying to build? An economy where Americans need to go downward in order to compete?"

Health Care Costs Jobs?

In the never-ending attempt to find even more excuses why Bush's 'recovery' isn't providing more jobs, the NYT locates the blame on rising health care costs. In this case, they may have a point.

By EDUARDO PORTER

Published: NYT, August 19, 2004

A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth.

Government data, industry surveys and interviews with employers big and small indicate that many businesses remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs for companies. Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

In the second quarter, the cost of health benefits rose at a 12-month rate of 8.1 percent - more than three times the inflation rate and the rate of increases in wages and salaries.

"Health care is a major reason why employment growth has been so sluggish," said Sung Won Sohn, the chief economist at Wells Fargo.

Although the economy emerged from recession long ago, posting 11 straight quarters of growth, there are still about a million fewer jobs in the United States than there were at the beginning of 2001, just before the country sank into recession.

A spurt in job growth between March and May raised hopes that employment would emerge from the doldrums. But job growth slowed sharply again in June and came to a virtual standstill last month. In July, businesses added a mere 32,000 jobs, and for the first time this year more businesses let workers go than hired new ones.

Because of the cost of health insurance, "we are making decisions not to hire people," said Steve Hayes, the owner of Custom Electronics in Falmouth, Me., which installs electronic systems like home theaters and communications networks in homes and offices. "Before, we hired based on workload," he added. "Now it's a question of affordability."

Mr. Hayes said his health insurance premiums had risen by 22 percent a year in the last four years. He now pays $4,150 a month in health insurance premiums for his 33 employees, and the workers contribute an equal amount from their own pockets. The company's revenue - less than $5 million annually - has been growing briskly, he said, but outlays for health benefits are growing even faster, eating into the company's profits.

The increase in health insurance premiums reflects the rising cost of health care, which is being driven by expensive new drugs, many of them heavily advertised to consumers; medical advances including diagnostic tests that require costly new machines; and a reaction to past restrictions in managed care health plans that sought to rein in costs.

Conservative Tax Policy

FITE Newsletter

Conservative policy has long pushed to shift the federal tax burden off wealth and onto income taxes and state and local taxes. The Bush Administration has accelerated this radical shift away from our historically progressive tax system. They have made clear that a second Bush four-year term would mean more of the same, a direction with profound results.

Even though they’ve already raided the Social Security "lock box", assaulted the estate tax and driven the country deeply into debt, conservatives ideologues now seek to eliminate all taxes on wealth, further adding to an already crushing tax burden for those who live by their paycheck.

FITE urges John Edwards to wake up to the fact that the "two Americas" he speaks of is becoming a reality more quickly than he realizes.

This very conservative direction is mainly the result of the Democrats having failed to organize around an alternative set of policies. An effective opposition party would have noted that the Republican thrust runs counter to the more successful times of our democratic past. The ‘spreading of the wealth’ in the post World War II period was critical in developing economic opportunity. The massive subsidizing of mortgages by the Veterans Administration and other federal agencies made home ownership possible for millions of families.

Furthermore, FITE has maintained that our place in the world economy would be jeopardized if our fiscal policy reduces educational opportunities. We would then eliminate so much potential brainpower that we will be unable to effectively compete with developing economic powers such as China and India.

Why have the Democrats not responded? This conservative strategy is hardly new. It’s merely a more robust repeat of the first Reagan Administration policies of the 1980’s. The Democrats have pretended that our fiscal condition results from events instead of very intentional policies of conservative ideologues. Currently, the Democrats have limited their (Kerry’s) effort to rolling back a small part of the income tax reductions for the comfortable (above $200,000). This move would raise few funds, it fails to target the real culprits- the extremely rich- and would amount to a tiny asterisk to the uninterrupted Republican effort.

-Richard Sherman

For more, see here.

3000 Jobs--300,000 Applications

With Deluge, Longshore Jobs Become Long Shots

By Ronald D. White, LA Times Staff Writer


Hundreds of thousands of applications have poured in for 3,000 temporary jobs at the ports of Long Beach and Los Angeles — about 10 times as many submissions as expected — underscoring just how hungry people are for high-paying work in a weak labor market.

The International Longshore and Warehouse Union was so concerned about the crush of applicants that it asked a mediator Tuesday whether the hiring process could be delayed to ensure that everything runs smoothly. The mediator, however, ordered the union and West Coast shipping lines to proceed with their lottery and begin picking the 3,000 new dockworkers Thursday, as planned.

As word spread Tuesday about the flood of applications, some would-be dock hands were discouraged.

"This is almost like going to the horse track and betting on the long shot," said Raymond Sheets, a 47-year-old tree trimmer from San Diego who hopes to improve his lot by landing a job at the harbor.

The 3,000 slots, which are being offered to help handle a record amount of cargo coming through the ports, will pay $20.66 to $28 an hour — substantially higher than the average $8.38-an-hour entry-level wage in Los Angeles County. On Friday, the state reported that California's employers cut a net 17,300 jobs in July, illustrating how cautious many businesses remain when it comes to hiring.

"It's very rare in this economy, particularly for non-college-educated positions," to be so lucrative, said Michael Mische, a principal at WCL Consulting Co. of Long Beach and an adjunct professor of management at the USC Marshall School of Business. "These are highly desirable jobs, with the opportunity of becoming skilled in a vocation" that could lead to better things down the road.

Indeed, it's not clear how long any of the 3,000 jobs might last. But in at least some cases, if workers accumulate enough hours, they may be able to join the union full-time.

To apply, people were supposed to fill out a postcard bearing name, address and telephone number, and get it in the mail by last Friday. The only requirements: Be at least 18 years old, have a driver's license and be legally eligible to work in the U.S.

A Long Beach post office spokesman said Tuesday that a conservative estimate put the number of mailed-in applications at between 220,000 and 250,000. A shipping lines' representative suggested that the tally could climb substantially higher before Thursday's lottery.

(emphasis added by me)