Minimum Wage Hits Wall Street
By lucas@endneoliberalism On 25 Jun, 2013 At 01:22 PM | Categorized As Neoliberal Alert, raising the minimum wage | With 0 Comments

Consumer spending is down again. With 50% of Americans living below the poverty rate, corporations are reporting losses due to a significant decrease in first quarter revenue. Having kept the same conditions that created the 2008 recession, any growth perceived by the One Percent after the bailout can quickly vaporize.

Abercrombie reported a first-quarter loss of $7.2 million, with revenue down by $82.4 million. CEO Mike Jeffries got paid $41.8 million last year while the annual salary at minimum wage of $7.25/hour is $15,080. Having sent production to sweatshops in Bangladesh, many Abercrombie’s workers work in minimum wage jobs and belong to 50% of Americans who live below the poverty rate. That’s a lot of people not shopping for fancy clothes.

America’s mass poverty is a bigger problem than not being able to buy teenage clothes and cd’s. People can’t afford an education, rent, or nutricious food. The American Dream is long gone. Droped dead. Sailed out. The average salary for a Abercrombie & Fitch store manager is $36,231, and that’s as good as it gets for most Americans. Today, 90% of Americans earn less than 1950 minimum wage standard.

The majority of minimum wage workers are adults; 63 percent of them are are adults age 20 or over. Parents who work 3 jobs cannot afford rent at minimum wage because the shortest workweek to afford rent is 55 hours. In 19 states, one must work weekly anywhere between 71 and 88 hours, and in other 17 states one must work over 88 hours per week to afford a 2-bedroom apartment (End Neoliberalism. $2.99).

High School graduates cannot pay for their University education and since corporations moved all jobs abroad, students graduate with tens of thousands of dollars in debt in an economy without jobs. The number of college students receiving food stamps doubled to 360,000 and the total student debt reached an all time high of $1 trillion in 2012 (End Neoliberalism. $2.99).

It gets worse for the younger generations. Kids as young as 16 years old are quitting whatever general understanding government program was left after the corporations and the One Percent stopped paying their taxes, and these kids end up in minimum wage jobs at places like Abercombie (or worst) to help support their family’s rent and groceries. An Abercombie & Fitch shirt is probably way off the radar even for the kids who work at these stores, and America’s poverty crisis will have far worse effects on the One Percent if economic and human resources continue to degrade.

Raising the minimum wage is one area where the government has to intervene to save the US economy from collapsing again. Progressive taxes and regulations will also prevent profitable businesses from sending jobs overseas, and help establish an economic equilibrium that enables businesses to invest in sustainable production at home. Multinational corporations should invest in localization and take advantage of the many advancements in green methods of production and technologies explained in Occupy The Market, How Green Entrepreneurship Makes Multinational Corporations and Their Governments Obsolete (E-book $2.99); unfortunately, the current legal and economic structure continues to provide incentives to businesses that send jobs away and loot the economy.

After the bailout, the government (The Obama Administration with its incapacity for Change and the GOP with an extremist Neoliberal opposition) kept the same economic conditions that led to the financial crisis of 2008, which was of such catastrophic proportions that it led to printing trillions of dollars in bailout money for rebooting the global economy. In Tax & Regulate The One Percent, I explain that two years after having an international public bailout, The One Percent made more money than before 2007 levels while continuing to pay low taxes and sending jobs away. Some of these highly profitable corporations even paid negative tax rates, meaning that they made more money from taxpayers after having counted all their money.

“Total corporate profits were a record $1.97 trillion in the third quarter of 2011, an all-time high since the end of World War II 15 CEO pay now exceeds per-recession levels, going from a median of $8.4 million in 2007 to $9 million in 201016, and $9.6 million in 2017″. End Neoliberalism, Tax & Regulate The One Percent

“Corporations are not creating jobs exactly because it is more profitable, even when already profitable, to move jobs away. The examples are endless but GE and Microsoft are some of the biggest companies that laid off thousands of workers while incurring tremendous profits. G.E reported a net income of $11 billion in 2009 and cut 18,000 jobs. More than half of the company’s workforce is now located outside of the United States. To add insult to injury, General Electric sucked a tax benefit of $3.2 billion from the government’s tit in 201032. Andrea Orr reports that Microsoft, which was ranked one of the 10 most profitable companies in the United States with an income of $14 billion laid off 5,000 workers over a period of 18 months. IBM, which grew profits by 18% cut 10,000 jobs. Verizon Communications cut 8,000 jobs on a 14% jump in profits… 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.” End Neoliberalism, Tax & Regulate The One Percent

“Pepco Holdings paid -57.6% on pretax profits of $882 million, General Electric -45.4% on pretax profits of $10 billion, Paccar -30.5% on $365 million, and PG&E -21.2% on $.9 billion pre-tax profits. Six other profitable corporations received subsidies of more than 10% of their profits. The biggest 5 oil companies made a total of $135 billion in profits in 2011 and received $4 billion in subsidies plus another $20 billion in tax preferences (deductions, credits, and grants)” End Neoliberalism, Tax & Regulate The One Percent

Furthermore, the executives and investors who run these government subsidized companies continue to pay the same low tax rates under the Bush era, costing the government budget more than $1 trillion, according to the Congressional Budget Office.

This system simply cannot sustain itself for too long because it loots monetary reserves, factories, and valuable human resources. What was once a promise of Change – a promise to return to post-Roosevelt’s prosperous era – became Obama’s Unhappy Deal.

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End Neoliberalism, Tax & Regulate The One Percent

Occupy The Market, How Green Entrepreneurship Makes Multinational Corporations and Their Governments Obsolete (E-book $2.99)

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Picture credit: Findec CC BY 2.0

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