Reports from the Economic Front

a blog by Marty Hart-Landsberg

Monthly Archives: September 2010

Health Insurance Outrage

On Sept. 16, the U.S. Census Bureau released a report titled Income, Poverty, and Health Insurance Coverage in the United States: 2009.  Its findings on health insurance coverage deserve far more attention than they have received.

Before highlighting the report’s key findings, it is important to be clear about definitions.  According to the Census Bureau:

Private health insurance is a plan provided through an employer or a union or purchased by an individual from a private company.  Government health insurance includes such federal programs as Medicare, Medicaid, and military health care; the Children’s Health Insurance Program (CHIP); and individual state health plans. 

People were considered “insured” if they were covered by any type of health insurance for part or all of the previous calendar year. They were considered “uninsured” if, for the entire year, they were not covered by any type of health insurance.

Get that?  To be uninsured, a person had to be without any insurance for the entire year.

OK, here are the highlights

  • The number of people with health insurance fell from 255.1 million in 2008 to 253.6 million in 2009.  This is the first year (since the Census Bureau began collecting comparable health insurance data in 1987) that the number of people with health insurance actually decreased.  The percentage of people without health care coverage rose from 15.4 percent in 2008 to 16.7 percent in 2009.  To repeat—16.7 percent of the population went without health coverage for the entire year. 
  • The number of people covered by private health insurance fell from 201.0 million in 2008 to 194.5 million in 2009. The percentage of people covered by private insurance (63.9 percent) is the lowest since 1987. 
  • The number of people covered by employment-based health insurance fell from 176.3 million to 169.7 million.  The percentage of people covered by employment-based insurance (55.8 percent) is the lowest since 1987.
  • In contrast, the number of people covered by government health insurance rose from 87.4 million to 93.2 million.  The percentage of people covered by government health insurance programs (30.6 percent) is the highest since 1987.
  • The number of people with Medicaid coverage increased from 42.6 million to 47.8 million.  The percentage of people covered by Medicaid (15.7 percent) is the highest since 1987.

So, the heart of the problem is that the rise in public health insurance coverage could not make up for the decline in private coverage.  And the main reason for the decline in private coverage, which fell by 6.5 million, is that employment based coverage fell by 6.6 million.  

What a great health care system we have. 

You can read the full Census Bureau report here.

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Work Until You Drop

There is increasing talk among politicians about the desirability of raising the social security retirement age. 
 
The “normal retirement age,” which is the age when you can collect full retirement benefits, was set at 65 in 1940.  It remained that way until 1983, when Congress decided to raise it in two month increments beginning with people born in 1938.  People born after 1959 now have a normal retirement age of 67.  
 
With false claims of social security insolvency being thrown around, pressure is building to raise the age again, perhaps to 70 years. 
 
What would that mean for working people?
 
Hye Jin Rho of the Center for Economic and Policy Research has done an interesting study looking into the employment situation of older workers.  He combined data on worker occupations/demographics from the 2009 Current Population Survey with 2010 data from the Occupational Information Network (OIN) database which classifies jobs according to their occupational requirements. 

Rho, following other researchers, uses the OIN to highlight jobs that can be considered to be “physically demanding” or have “difficult working conditions.”  Physically demanding jobs include those that require “dynamic strength, explosive strength, static strength, trunk strength, bending or twisting, kneeling or crouching, quick reaction time, or gross body equilibrium” or more general sustained physical activity such as “handling and moving objects, or demand workers to spend significant time standing, walking and running, or making repetitive motions.”

Difficult working conditions are those that involve “cramped workspace, labor outdoors (exposed to the weather or covered) or indoors in not environment-controlled conditions, or exposure to abnormal temperatures, contaminants, hazardous conditions, hazardous equipment, or distracting or uncomfortable noise.”

Rho found that of the 18.8 million workers who are 58 or older (in 2009), over 45.3 percent have physically demanding jobs and/or difficult working conditions.  The older the worker cohort, the higher the percentage.  For example, for those 58-61 years of age the percentage is 44.5.  For those 66-69 years of age the percentage is 45.8.
 
Perhaps not surprisingly, the lower the income level, the higher the percentage of older workers with physically demanding jobs and/or difficult working conditions.  Almost 65 percent of workers 58 or older in the bottom income quintile have physically demanding jobs and/or difficult working conditions. 
 
Social security is not in crisis—yet, we have political and business leaders advocating an extension of the normal retirement age that can only be described as punitive.   Many workers will be unable to work long enough, given the nature of their jobs, to actually draw their full retirement benefits—but I guess that is the point for those out to destroy social security. 

What an indictment of our system–we produce incredible wealth and yet those with power are unwilling to allow workers a well-earned retirement.   

The Lost Decade

Recently released census data offers a disturbing picture of current economic and social conditions.  For example, the inflation-adjusted income of the median household declined 4.8 percent between 2000 and 2009.

Most of that decline took place between 2007-2009, when median household income fell 4.2 percent. Household income normally takes a big hit during recessions.  But, as the Wall Street Journal explains,

there is a difference this time: In the prior three recessions, incomes fell after years of upswing, then resumed growing once the downturn ended. The decline this time comes on top of a long period in which incomes stagnated even through the recovery of 2003 to 2007.

It is worth restating this point—inflation adjusted median household income was falling even when the economy was growing. 

What we are facing is a lost decade. How have people been coping?  The recession has been particularly hard on younger workers and many have been forced to move in with their parents.  Again, according to the Wall Street Journal,

The number of 25-to-34-year-olds living with their parents rose 8.4% to 5.5 million in 2010 from 2008. Within that age group, 42.8% fell below the poverty threshold.

In fact, people of all ages are merging households:  The number of multifamily households rose 11.6 percent from 2008 to 2010, while the total number of households rose only 0.6 percent.

Perhaps one of the more dramatic statistics to emerge from census data is the extent of child poverty.  The percentage of children under six living in poverty rose from 21.3 percent in 2008 to 23.8 percent in 2009.  In other words, approximately one out of every four children under the age of six in this country is living in poverty—and that is according to a definition of poverty that is far from adequate.

The overall percentage of Americans living in poverty rose from 13.2 percent in 2008 to 14.3 percent in 2009—that is the highest rate since 1994.  We are talking about 44 million people or one in seven. Highlighting the continuing importance of racial and ethnic differences, while the poverty rate for non-Hispanic whites was 9.4 percent, it was 25.8 percent for blacks and 25.3 percent for Hispanics. The rate for Asians remained at 12.5 percent.

In case you were wondering, the 2009 poverty line for a single adult was $10,830 in pretax cash income; for a family of four it was $22,050.

Sadly, but not surprisingly, as the New York Times reports:

There are strong signs that the high poverty numbers have continued into 2010 and are probably still rising, some experts said, as the recovery sputters and unemployment remains near 10 percent. . . . One indirect sign of continuing hardship is the rise in food stamp recipients, who now include nearly one in seven adults and an even greater share of the nation’s children. While other factors as well as declining incomes have driven the rise, by mid-2010 the number of recipients had reached 41.3 million, compared with 39 million at the beginning of the year.  Food banks, too, report swelling demand.

Quite a mess.

American Way Of War Quiz

Military Spending is clearly the “elephant in the living room” in discussions regarding government spending and deficits.  Most of those screaming for deficit reduction seem oddly unconcerned about our military budget.  Even many supporters of active government spending appear reluctant to take on the military.  

Perhaps these people think that with our new foreign policy, military spending will be reigned in so there is no need to take on such a powerful institution.  Well, if that is their thinking, they are in for a big disappointment.  Spending on the military continues to grow and in line with government policy.

If you don’t believe it, I recommend taking the 11 question American Way of War Quiz.  In what follows I list only the first three questions and answers.  I strongly recommend going here and taking the entire quiz.  But make sure you are sitting down while reading the answers.

The American Way of War Quiz
This Was the War Month That Was (Believe It or Not)
By Tom Engelhardt and Nick Turse

Yes, it would be funny if it weren’t so grim.  After all, when it comes to squandering money and resources in strange and distant places (or even here at home), you can count on the practitioners of American-style war to be wildly over the top.

Oh, those madcap Pentagon bureaucrats and the zany horde of generals and admirals who go with them!  Give them credit: no one on Earth knows how to throw a war like they do — and they never go home.

In fact, when it comes to linking “profligate” to “war,” with all the lies, manipulations, and cost overruns that give it that proverbial pizzazz, Americans should stand tall.  We are absolutely #1!

Hence, the very first TomDispatch American Way of War Quiz.  Admittedly, it covers only the last four weeks of war news you wouldn’t believe if it weren’t in the papers, but we could have done this for any month since October 2001.

Now’s your chance to pit your wits (and your ability to suspend disbelief) against the best the Pentagon has to offer — and we’re talking about all seventeen-and-a-half miles of corridors in that five-sided, five-story edifice that has triple the square footage of the Empire State Building.  To weigh your skills on the TomDispatch Scales of War™, take the 11-question pop quiz below, checking your answers against ours (with accompanying explanations), and see if you deserve to be a four-star general, a gun-totin’ mercenary, or a mere private.

1. With President Obama’s Afghan surge of 30,000 U.S. troops complete, an administration review of war policy due in December, and fears rising that new war commander General David Petraeus might then ask for more troops, what did the general do last week?

a. He informed the White House that he now had too many troops for reasonable operations in Afghanistan and proposed that a drawdown begin immediately.

b. He assured the White House that he was satisfied with the massive surge in troops (civilian employees, contractors, and CIA personnel) and would proceed as planned.

c. He asked for more troops now.

Correct answer: c.  General Petraeus has already reportedly requested an extra mini-surge of 2,000 more troops from NATO, and probably from U.S. reserves as well, including more trainers for the Afghan military.  In interviews as August ended, he was still insisting that he had “the structures, people, concepts, and resources required to carry out a comprehensive civil-military counterinsurgency campaign.” But that was the summer silly season.  This is September, a time for cooler heads and larger demands.

2. With President Obama’s announced July 2011 drawdown of U.S. troops in Afghanistan in mind, the Pentagon has already:

a. Begun organizing an orderly early 2011 withdrawal of troops from combat outposts and forward operating bases to larger facilities to facilitate the president’s plan.

b. Launched a new U.S. base-building binge in Afghanistan, including contracts for three $100 million facilities not to be completed, no less completely occupied, until late 2011.

c. Announced plans to shut down Kandahar Air Base’s covered boardwalk, including a TGI Friday’s, a Kentucky Fried Chicken, and a Mamma Mia’s Pizzeria, and cancelled the opening of a Nathan’s Famous Hot Dogs as part of its preparations for an American drawdown.

Correct answer: b.  According to Walter Pincus of the Washington Post, construction is slated to begin on at least three $100 million air base projects — “a $100 million area at Shindand Air Base for Special Operations helicopters and unmanned intelligence and surveillance aircraft”; another $100 million to expand the airfield at Camp Dwyer, a Marine base in Helmand Province, also to support Special Operations forces; and a final $100 million for expanded air facilities at Mazar-e Sharif in northern Afghanistan.  None of these projects are to be completed until well after July 2011. “[R]equests for $1.3 billion in additional fiscal 2011 funds for multiyear construction of military facilities in Afghanistan are pending before Congress.”   And fear not, there are no indications that the fast-food joints at Kandahar are going anywhere.

3. The U.S. military has more generals and admirals than:

a. Al-Qaeda members in Yemen.

b. Al-Qaeda members in Afghanistan.

c. Al-Qaeda members in Pakistan.

d. Al-Qaeda members in all three countries.

Correct answer: a, b, c, and d.  According to CIA Director Leon Panetta, there are 50 to 100 al-Qaeda operatives in Afghanistan, possibly less.  Best estimates suggest that there are perhaps “several hundred” al-Qaeda members in poverty-stricken, desertifying, strife-torn Yemen.  There are also an estimated “several hundred” members and leaders of the original al-Qaeda in the Pakistani borderlands.  The high-end total for al-Qaeda members in the three countries, then, would be 800, though the actual figure could be significantly smaller. According to Ginger Thompson and Thom Shanker of the New York Times, the U.S. military has 963 generals and admirals, approximately 100 more than on September 11, 2001.  (The average salary for a general, by the way, is $180,000, which means that the cost of these “stars,” not including pensions, health-care plans, and perks, is approximately $170 million a year.)  The U.S. military has 40 four-star generals and admirals at the moment, which may represent more star-power than there are al-Qaeda operatives in Afghanistan.  Secretary of Defense Robert Gates has suggested that, as a belt-tightening measure, he might cut the top-heavy U.S. military by 50 positions — that is, by half the increase since 9/11.

The Crime: Honesty

Last month a flight attendant for Compass Airlines (a regional carrier associated with Delta Airlines) was fired because, in an interview on a local Arizona television station, she revealed that her salary, despite a full-time schedule, was so low she had been approved for food stamps.

As Aero-News.net explains:

Kirsten Arianejad (the fired flight attendant–see her picture below) said she had requested anonymity from the reporter from Arizona television station KARE, a request she says he honored, but she soon found herself out of work none the less.  Arianejad told the reporter that applying for government assistance was “a horrible feeling.” She said flight attendants should be paid a “fair wage,” and not have to go on food stamps to feed their families.

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According to Aircrew Buzz.com:

Since late 2009, the Association of Flight Attendants-CWA (AFA)  has represented the flight attendants at Compass Airlines, which conducts regional flying on behalf of Delta Air Lines.  Currently, the AFA is  engaged in contract negotiations with Compass Airlines for their first agreement.  At present, Compass flight attendants are paid at or near the minimum wage with a starting flight attendant annually making between $13,842 ($1,153.50/month) and $15,453 ($1,287.75/month), according to the union. That would make most Compass flight attendants eligible for assistance.

So—get this—we have a system where companies can not only get away with paying their workers incredibly low wages, they can fire those workers if they openly speak about how low the wages are.

Arianejad’s situation is sadly typical.  As AvStop.com notes:

While regional carriers now operate over 50 percent of daily commercial flying, they continue to pay poverty-level wages to flight attendants and other employees. Many flight attendants from various regional carriers find it difficult to provide for themselves and their families. 

I wish Compass flight attendants the best of luck as they try to negotiate their first contract with the airline.   Perhaps they can win an honesty and transparency clause as well as a wage increase.  

A Victory Worth Celebrating

It is always wonderful and important to celebrate a victory—and this one is especially worth celebrating: domestic workers in New York finally succeeded, on August 31, in getting the state to pass a Domestic Workers Bill of Rights.

Of course this victory got very little attention in the mainstream press.  It makes you wonder how many other victories are hidden from view, leaving us discouraged about the possibilities for change. 

It also makes me aware of how little time we actually spend talking about strategies for change.  For example, here is a group of workers that have diverse responsibilities and carry them out largely in isolation from each other.  They speak many different languages.  They are mostly female.  Their work is insecure—they can be fired at will.   They are low paid and unlikely to have significant resources to draw upon if terminated.  Yet, they created an organization that was responsive to their broad interests.  They and their organization launched and sustained a six year campaign.  And they won.

Imagine a world in which other working people could learn about this victory—not just the fact of the outcome—but actually learn about the debates over strategies; the role, training, and experiences of organizers; the ways in which broader alliances were made and pressures placed on elected officials.  And then imagine a world in which working people had the organizational space to come together to discuss the lessons of this struggle in order to sharpen their own efforts at social change. 

What would it take to have such a world?  What kind of media would we need to create?  What kind of changes would we need to make in our organizations?  What kind of class opposition would we face and how might it attempt to undermine our efforts?

Well, enough raising questions—here, thanks to Democracy Now, is an interview with Ai-jen Poo, one of the founders of Domestic Workers United, and Patricia Francois, a nanny and member of the organization.  

JUAN GONZALEZ: New York Governor David Paterson has signed into law a measure establishing a landmark set of working standards for housekeepers, nannies and other domestic workers. With the signing of the Domestic Workers Bill of Rights, New York becomes the first state where domestic workers will be guaranteed overtime pay after a forty-hour workweek, at least one day off per week, and at least three days off with full pay per year.

The passage of the bill comes after a six-year organizing campaign by Domestic Workers United, an organization led by immigrant nannies, housekeepers and elderly caregivers. Labor organizers are now hoping other states will enact similar laws to protect domestic workers who for decades have not been covered by federal labor laws, including the National Labor Relations Act and the Fair Labor Standards Act.

We’re joined now by two guests. Ai-jen Poo is the executive director of the National Domestic Workers Alliance. Ten years ago, she helped found Domestic Workers United after meeting a group of Filipina nannies who complained about their working conditions. We’re also joined by Patricia Francois, who has worked for many years as a nanny in New York after moving here from the Caribbean nation of Trinidad.

Welcome to both of you.

AI-JEN POO: Thank you.

PATRICIA FRANCOIS: Thank you.

JUAN GONZALEZ: Ai-jen, the importance of this bill and of the governor signing it, finally?

AI-JEN POO: This bill is really the first time there’s been official recognition of this workforce as a workforce that does vital work and provides a vital service for New York and for this country, and of the injustice of the discrimination that the workforce has faced in the labor law. Having been excluded from almost every major labor law for generations, the workforce has been rendered vulnerable to abuse and exploitation. And so, despite the really important work that the workers do, they’re very vulnerable to abuse. And so, this is the first time that the work is being recognized and the workers are having a minimum standard of protection.

JUAN GONZALEZ: And how—approximately how many domestic workers are there in New York and throughout the nation?

AI-JEN POO: There’s about 200,000 in the metropolitan area in New York and 2.5 million in the United States.

JUAN GONZALEZ: Patricia Francois, tell us—

PATRICIA FRANCOIS: Yeah.

JUAN GONZALEZ: —your story and how you got involved in the movement to establish the bill of rights.

PATRICIA FRANCOIS: I got involved when I found a newsletter in Central Park on a bench, all by himself waiting for me. And I read it. And after reading the contents, you know, it was really significant for me, being an undocumented nanny. And we all do need protection. And as it is, after six-and-a-half years, we finally got this bill, after decades and decades of injustice. And for me, it means the recognition for the work that we do. It means respect, that we never get, and, most of all, to be included in the labor laws, to be protected by the labor laws.

JUAN GONZALEZ: What were some of the conditions that you labored under previously that now would be eliminated?

PATRICIA FRANCOIS: The abuse—physical abuse, the verbal abuse. We now have some protection, that if it do happen, it is in the attorney general hands, where he can assist us and seek justice, because it’s a human right.

JUAN GONZALEZ: Now, you had filed a lawsuit against a previous employer of yours. Could you talk about that?

PATRICIA FRANCOIS: Yeah, because I was physically abused, verbally abused, emotionally abused. But unfortunately, I cannot get into depth on details about the lawsuit. But, yes, I was physically abused by my former boss.

JUAN GONZALEZ: And again, in terms of some of the key provisions of the bill, were there any that were particularly difficult to get the legislature to pass? Because obviously, in Albany, it’s a mixed bag in terms of—

AI-JEN POO: Absolutely.

JUAN GONZALEZ: —the kind of political support you would get for a bill like this.

AI-JEN POO: Absolutely. And when we first started out, we were demanding a living wage of $14 an hour, healthcare, paid vacation, paid sick days, notice of termination. When the workers came together and developed their vision of what it would mean to have respect and recognition on the job, all of those pieces were really important. So this is an ongoing fight. The paid leave, the three days minimum paid leave that we were able to get included in the bill, is a really important beginning. A lot of workers don’t get paid leave at all. So that establishes a bare minimum. And we need to continue organizing for more.

JUAN GONZALEZ: Now, there had been a similar bill passed in California by the legislature there, but Governor Schwarzenegger vetoed it?

AI-JEN POO: That’s correct.

JUAN GONZALEZ: Could you talk about the differences between the bills and what the prospects now might be in California again?

AI-JEN POO: So, the bill in California included overtime pay and a day of rest. And our bill includes protection also from discrimination, from harassment, inclusion in disability laws, inclusion in overtime laws at your regular rate of pay. So there’s more in this bill that covers almost every major issue that other workers are covered by. It also—our bill in New York also mandates that the Department of Labor study the feasibility of collective bargaining in this industry. And we’re hoping that that paves the way for either the establishment of more benefits or the rights to organize for domestic workers.

Now, in California, the legislature last week just passed a resolution supporting recognition and labor standards, which will pave the way once again for a California Domestic Workers Bill of Rights. And now, with the New York victory, we believe that the chances that that will move quickly through the California legislature are very great, and there’s eight domestic worker organizations that are working very hard in California to make sure that that happens.

JUAN GONZALEZ: Patricia Francois, could you talk a little bit about the real-life conditions that an average nanny in New York faces today? Obviously, many middle-class New Yorkers depend on nannies to be able to continue to work and to provide for their own families. But what are the conditions under which they work today?

PATRICIA FRANCOIS: We work long hours, no overtime pay. My experience, after working six-and-a-half years, never had an increase in salary, as well as no overtime pay. At times, if you work on your vacation, if you don’t stand up for that vacation pay, you will not get it. You know, and it’s hard at times—when you stand up for yourself, that is the time the abuse comes in. You get a verbal abuse. You get threatened with immigration. And it’s wrong. It’s wrong.

And I am thankful that I am a part of Domestic Workers United, because we come out and do real work. We dedicate our lives to the work that we do. You know, we take care of the future generation. We take care of the worldly possessions. We even take care of the elderly. You know, and we get no appreciation whatsoever. Now, I’m not saying all employers are wrong, but it have employers that’s willing to do what is right, some of them already doing what is right. And for those who is not doing right, the Bill of Rights will set a guideline so that employers will be able to follow, and employees will get the justice that they deserve, respect and recognition.

JUAN GONZALEZ: OK. Well, I want to congratulate on the tremendous victory that you’ve achieved after six long years of struggle to get the bill passed.

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Paid For Layoffs

The conventional wisdom is that market dynamics generate socially beneficial outcomes.  It is all a matter of letting private interests freely compete to determine activities, organize resources and distribute rewards. 

Hmmmm—kind of interesting, then, that a study by the Institute for Policy Studies found the following: 

  • Two years into the worst economic crisis since the Great Depression, executive pay — after adjusting for inflation — is still running at double the 1990s CEO pay average, quadruple the 1980s average, and eight times the average executive pay in the mid-20th century.
  • CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average in 2009, 42% more than the CEO pay average at S&P 500 firms as a whole.
  • Combined, these 50 CEOs made $598 million while laying off 531,363 workers — accounting for more than three quarters of the 697,448 announced layoffs at the top 500 firms.  And, 72% of these firms announced their mass layoffs during periods of positive earnings reports.  In fact, these companies enjoyed an average 44% profit increase in 2009.
  • Of the 50 layoff leading companies, only two reported paying corporate income tax in 2009 at the 35 percent statutory rate.
  • Five of the 50 top layoff leaders owe their good fortune directly to major taxpayer bailouts of the financial sector. Of these, American Express CEO Kenneth Chenault took home the highest 2009 pay, $16.8 million, a sum that included a $5 million cash bonus. American Express has laid off 4,000 employees since receiving $3.39 billion in TARP funding.  

For those of you that like lists—here are the ten highest paid CEOs among 2009 layoff leaders:

The highest paid was Fred Hassan of pharmaceutical Schering-Plough, which was bought by Merck. Hassan got nearly $50 million, $33 million of which was a “getaway gift” when his company was acquired. 

Second was Bill Weldon of Johnson & Johnson.  Weldon was paid $25.6 million.

Third was Mark Hurd of Hewlett-Packard, $24 million.

Fourth was Bob Iger of Walt-Disney, $21.6 million.

Fifth was Samuel Pamisano of IBM, $21.2 million.

Sixth was Randall Stephenson of AT&T, $20.2 million.

Seventh was Michael Duke, CEO of Wal-Mart, $19.2 million.

Eighth was Alan Mulally of Ford, $17.9 million.

Ninth was Louis Chenevert of United Tech, $17.9 million.

Tenth was Ivan Seidenberg of Verizon,$17.5 million.

You should read the entire report–lots more interesting facts.  But if you are in a hurry you can watch a four minute overview below or here.