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Posts Tagged ‘NBA’

Blame Workers at Your Own Peril

In Current Events, Economics on July 4, 2011 at 04:25

Photo courtesy of Moral Low Ground at http://morallowground.com/tag/wisconsin-protests/

If you are an owner of a business, a CEO, upper management or a Congressperson, congratulations. Otherwise, with a few exceptions, you are a worker. Whenever a worker is blamed for being lazy or greedy or the cause of the economic downturn, they are blaming you. You are being blamed for the faulty management of the economy by greedy people who don’t give a damn what happens to you and will scapegoat you for their atrocious decisions. The fallout for their mismanagement of production, loans, credit, distribution and over-reaching will land on you. And the media and far too much of the American populous buys into the blame laid on the workers.

If a worker has a bad performance record or does something immoral or illegal on the job, the worker gets fired; if corporate owners or CEOs have bad performance records or do something illegal or immoral on the job, the worker gets fired. This holds true for the history of capitalism in the United States. Even though you had nothing to do with the decisions that bankrupted your firm, you will take the hit. Even in the NBA, workers take the blame for poor management decisions.

What is happening in the NBA is what has been happening to workers in all industries for at least three decades. The owners of the thirty NBA franchises are asking for their players, the workers, to take a pay cut. The owners believe the last bargaining agreement gave too much to the players, and that is why they are losing money.

According to the NBA commissioner Bug Selig, 22 of 30 teams lost money during the last NBA season. However, the data the owners use to “prove” that they are losing money is questionable. For the moment, let’s say that despite making over 4.3 billion this last season, that teams have lost over $300 million as the commissioner claims. Why have they lost this money? They claim it’s due to the contracts they pay the players. However, the owners agreed to pay these contracts.

What player wouldn’t take the extra money if it were offered them? “Sorry Mr. James (LeBron). We suddenly realized that we overpaid you by 40%, and we want $5.8 million of that $14.5 million contract back.” Good luck with that. Are movie producers going to ask big stars to give money back after their movie flops? “Sorry Mr. Hanks, you have to give back that $5 million we paid you for the movie. As for that percentage of the profits we promised you? There is no profit. The NBA owners agreed to the outrageous contracts and salaries for the players and if they can’t make a profit, it’s not the fault of the players.

In other industries the workers have it far worse. At least most of the NBA players have made millions doing something they like, and even if they do take a 40% pay cut, the average salary to throw a ball around a gym will be $2.88 million. That’s not bad at all. But workers in other industries are losing benefits, hours and jobs, much of it due to rotten management decisions.

In 2007, the U.S. auto industry was about to collapse and many people were blaming the workers’ pay and pensions for this. (Watch the Video) But the workers were not designing the cars that didn’t sell, and Toyota was doing well opening plants in the U.S. What was the difference? One can make a an argument that worker’s compensation is a huge challenge for U.S. automakers. However, it’s not current compensation that is cause of the financial trouble.

Part of the problem is that the compensation to retired workers at the big three automakers raises the average cost of compensation to oft quoted $70 and hour rate. But that includes ALL compensation to ALL workers, current and retired. Foreign companies now operating in the U.S. don’t have that pool of retired workers U.S. manufacturers promised to take care of.  In addition, the big three agreed to these contracts when there was little competition from abroad. Current workers are not to blame for management’s lack of foresight.
And do we really want to “race to bottom” as Bob Herbert of the New York Times put it, and punish those that worked 20 plus years making automobiles when the big three were really big?

Do we want to sink all boats when it means that what would come next is the lowering of everyone’s salaries or even the dream of many Republicans, including Michelle Bachmann, an end to the minimum wage?

“Life before minimum wage” is a great book project for a full time journalist like Naomi Klein to take up, but if you want a glimpse of it, read The Shame of the Cities for starters. If you want poverty statistics to be even worse and more money for billionaires, please, let’s get rid of the minimum wage. It’s already NOT a living wage. Without a minimum wage, we would have a killing wage.

Another big cost for the automakers, and other companies, is health care. Obama and the Democratic Congress made a weak stab at reducing these costs and we will see how it turns out in a couple of years when the Affordable Health Care for America Act comes into affect (2014). But the workers have nothing to do with the rising health care costs. They don’t manage HMOs or insurance companies and don’t control costs of the care that is included in their contracts. This is true for all workers, not just those in the auto industry.

Autoworkers also didn’t order the SUVs that the American public stopped buying after the rise in gas prices around 2007. But the workers take the blame when the CEOs of these companies make bad decisions and then fly private jets to ask for bailouts.

In 2007, the year before bailout negotiations, the CEOs of GM and Chrysler were paid $14.4 million and $21.7 million consecutively, not counting other forms of compensation such as stock and bonuses. (link) According to the article and sources there in, the head of Ford was paid $1 and money based on performance. And all three big three CEOs did promise to take $1 on the books after getting a bailout from us. At least these companies have been losing money, and one obvious and easy place to look for savings is payroll.

Companies that laid off the most workers since the latest recession gave out the biggest bonuses:

“A new report concludes that chief executives of the 50 firms that have laid off the most workers since the onset of the economic crisis in 2008 took home 42 percent more pay in 2009 than their peers at other large U.S. companies…Each of the 50 companies examined in the report laid off at least 3,000 workers between November 2008 and April 2010…Those CEOs include HP’s Hurd, who slashed 6,400 jobs in 2009 — a year when his compensation amounted to $24.2 million.” (link)

The message is clear: to get a large bonus, you must layoff the most workers. In fact, CEO pay now is greater than before the recession. I guess they aren’t responsible for the downturn in the economy. It’s the workers’ fault.

The latest scapegoat is the public sector workers, specifically teachers. A USA today article misleadingly states that public sector workers in 41 states make more money than private sector workers. In a very limited sense, that is true. However, when you compare all salaries of public workers, many having at least a bachelor’s degree, to workers of all kinds, including low-wage workers in companies such as Wal-Mart and McDonalds and other large department stores and fast food chains, it is not a legitimate comparison. Of course those with more invested into education, on average, will make more money, on average.
If you compare levels of education, public sector workers with equal education and experience make less than their private sector peers.

The Center for Economic and Policy Research compared compensation for public and private sector workers, and unlike the faulty USA today study, factored in age and education.  They found that while the lowest paid workers in New England, public to private, Janitors in a state office say, and a Wal-Mart worker, the public sector worker makes slightly more. And it’s not exurbanite. Janitors at Harvard, for example, can’t afford to live in the Boston area and work at the prestigious university.

Moreover, if you look at professionals working in New England with four or more years of university, public to private, the public sector workers take a “wage penalty” of 13%. That means that they earn 13% less than their counterparts in the private sector with the same experience and education. So much for overpaying the public sector workers.

Then why the attack on public sector workers? First, it scores points with the under and uneducated base of the Republican party while also scoring points with the free marketeers who see the public sector interfering with their profits. The lower wages are for everyone, the better they feel. These two groups dominate the Republican Party where much of this attack on the public sector comes from.

Take Wisconsin Governor Scott Walker, please. Governor Walker wants public sector workers to give up their collective bargaining rights under the guise of state deficits. But the right to collectively bargain has nothing to do with deficits. Wisconsin was even looking at a surplus before Walker gave a round of corporate tax cuts to his friends. And once Walker was able to give those tax breaks to corporations, he had to get the money somewhere. So he went after the enemies of the Republicans, the workers, specifically those in the public sector.

Obviously, it is an attempt the bust the unions during a time of crisis while taking down a major supporter of the Democrats. And while unions, the membership and their supporters are putting their efforts into the push back against union busting, CEOs and the elite are garnering more compensation for themselves and paying less in taxes.
There is a two-fold genius in this Republican lead attack on workers in the United States. First, if Republicans and other free marketeers can get workers bickering with each other, then they are easier to manipulate. With workers divided, the corporate elite and their lackeys in Congress can easily defeat their opposition. Second, if you can bust or weaken the unions then a major barrier to total corporate control will be less of a factor.

So, keep calling Republican workers fascists and haters and keep attacking liberal workers over abortion and for being socialist and see where that gets you. You are playing right into the hands of the bourgeoisie. Or, you can go after the Corporodems and the Koch brother’s drones and others who are attacking workers. How about supporting workers against cuts to hard-earned pay and benefits instead? Abortion and god and climate change and gay marriage and Islamophobia are only distractions from the class warfare the wealthy are waging against all U.S. citizens.

Watch Noam Chomsky go after the Corporodems, Obama and others.

Join U.S. Uncut

Peace,
Tex Shelters

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