Wade Rathke: Chief Organizer Blog » Financial Justice

Stealing from Poor Workers

jstuart — Wed, 02 Sep 2009 15:33:12 +0000

Baltimore Ruth Milkman of UCLA and Nik Theodore of University of Illinois, Chicago are top researchers and obviously savvy enough to put out their study, Broken Promises, Unprotected Workers, as an exclusive to Steve Greenhouse at the Times to get maximum attention to their summary of surveys from over 4000 workers in 2008 which indicates that wage theft from workers is simply routine. I wish this was a surprise, but of course it is not. The whole report is probably timed to Labor Day. Hopefully, Russell Sage Foundation which financed the report will say something more than “low wage workers are hard to find,” which was such a preposterous comment that I found myself laughing in the pre-dawn while I read the highlights.

The bullet points though are riveting:

“… a typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay.”
“Only 8 percent of those who suffered serious injuries on the job filed for compensation to pay for medical care and missed days at work stemming from those injuries.”
“…26 percent of the workers had been paid less than the minimum wage the week before being surveyed…”
“… one in seven had worked off the clock the previous week.”
“…76 percent of those who had worked overtime the week before were not paid their proper overtime…”
“Of workers who receive tips, 12 percent said their employer had stolen some of the tips.”
“One in five workers reported having lodged a complaint about wages to their employer or trying to form a union in the previous year…”
“…43 percent of them said they had experienced some form of illegal retaliation, like firing or suspension….”

So, even with just the headlines and without reading the unreleased report, the “news” is clear: low wage workers are robbed when well and when hurt by being paid less than the minimum wage, wrong overtime, and off the clock, but they are not passive and a significant minority are willing to stand up and do something, but almost half are brutalized on the job by intimidation tactics and slap down retaliations.

The DOL Secretary says she’s hiring 200 more Wage and Hour inspectors, but clearly that is inadequate after years of neglect, and there has been no reform of labor laws yet, so pretty much today is another day in the working life and the unwritten law for many businesses is that this just means it is another good day to steal from their own workers without much of a fear in the world that justice will be done.

America, what a country!

Last night at a Citizen Wealth event at SEIU 1199 in Baltimore a wage inspector for the State of Maryland asked me what did I know about innovative programs in other states being undertaken to enforce labor laws. I had to answer essentially, “nothing, brother,” you are one of the few and not the many. Today’s highlights on this report indicate that he is even more alone that I feared.

Ballot Stuffing at Bank of America

wade — Wed, 29 Apr 2009 17:03:00 +0000

New Orleans Ken Lewis, the CEO and Chairman of Bank America has somehow joined Vikram Pandit of Citi as about the only old bulls of banking still left sitting after the implosion within the financial services industry. It is almost unbelievable that they are still there. Pandit has shed and shuffled board members, including bringing in the former head of Time-Warner to flak catch for him. In biting off Merrill Lynch and absorbing John Thain and his “issues” at the same time, Lewis finally had a lot of the mess catch up with him, but is still trying to dance step his way out of real accountability.

SEIU and others have correctly called for him to step down so that a new day can begin at Bank of America. It seems inevitable that Lewis must go and now seems a good time for it.
Unfortunately, as Charlotte Observer reporter Christina Rexrode observers in a skillfully garnered quote, there is no such thing as shareholder “democracy,” and the “ballot stuffing” may prevail in the votes being counted now on the question of Lewis’ ouster. These pieces of her story tell the story better than any other that I have seen:

Key vote at BofA stirs up hostility

Angry shareholders want Lewis ousted this week, but the rules make it unlikely he will be removed.

By Christina Rexrode
CharlotteObserver.com

April 26, 2009

Three major proxy advisory firms — Glass Lewis & Co., RiskMetrics Group and Egan-Jones Proxy Services — have told shareholders to vote against re-electing Lewis. Along with PROXY Governance Inc., they also oppose the re-election of lead director Temple Sloan. Connecticut’s state treasurer, the Illinois State Board of Investment, the State Teachers Retirement System of Ohio, the Virginia Retirement System and TIAA-CREF all plan to vote against Lewis.

“You’ve had this awful plummet in share price, and, in the middle of that, a lackluster acquisition of Merrill Lynch,” said William Atwood, director of the Illinois fund. “And if you’re not going to make changes now, in what circumstances would you make changes?”

But of those investors, even the largest — TIAA-CREF — holds only 0.56 percent of the bank’s 6.4 billion shares. The rest hold far less.

Another disadvantage for opponents is the issue of shares held by brokers. If an individual holds shares through a brokerage and doesn’t tell the broker how to vote, then voting power generally transfers to the broker 10 days before the shareholder meeting. Brokers almost always vote in the company’s favor.

“Many people consider that legalized ballot stuffing,” said Davis, the corporate governance expert. (The SEC is accepting comments on whether this rule should be amended. Go to www.sec.gov/rules/sro/nyse.shtml and look for the proposal about Rule 452.)

CtW Investment Group, representing a coalition of unions with Bank of America pension investments, estimates the broker vote will make up 22 percent of shares cast. That means Lewis and other directors need only about 36 percent of all remaining shares voted to win re-election.

“I see a very big shareholder vote against (Lewis),” said Michael Garland, CtW’s director of value strategies. “But I think it’s likely he will get (the necessary) 50 percent plus 1 with the broker vote.”

Jon Finger, of the Houston-based investment firm spending $75,000 on a campaign to shake up the board, said Lewis is more likely to win re-election than Sloan.

“Some institutional investors,” he said, “may be concerned about maintaining stability at the company.”

Unlike a political election, Bank of America knows the results of the voting so far. Investors can change their votes up until the meeting. Abstentions do not count either way. That means if there are 100 shares, and 70 are not voted, a director needs 16 votes to be elected.

The bank isn’t disclosing interim results. “We won’t speculate on the results or what we would do if any vote goes against us,” said spokesman Scott Silvestri.

Corporate-governance experts say the bank is likely trying to bargain with institutional investors who have cast their votes against it.

“They can twist and cajole,” Reda said. “They can say, ‘OK, Lewis will agree to leave the company at the end of the year if you change your vote.’ And one minute before the shareholder meeting starts, somebody can fax in a change to their vote and swing the election.”

The shareholder groups and the company would probably prefer to work out their differences behind closed doors, Reda added. The public fighting “tarnishes the bank’s reputation, and as a shareholder what do you want that for?”

If Lewis loses his seat on the board, he would still be CEO. But experts agree that he’d almost certainly resign that post, or risk shareholder outrage.

Even if Lewis and his directors win re-election, it doesn’t mean they’re in the clear. Shareholders still sound a pretty loud message if they garner significant, but not majority, opposition against a director.

“I could be wrong, but I think all the directors will be re-elected,” said Ray Groth, co-founder of Duke University’s Directors’ Education Institute. “But if one gets even 30 to 40 percent against him, they’re going to sit up and say, ‘Boy, maybe we need a few fresh faces on the board.’”

Bank analyst Dick Bove says there’s “no likelihood” that dissident shareholders will win Wednesday’s vote because they haven’t mounted a big enough campaign. Chris Cernich, a research analyst at PROXY Governance, agreed that shareholders’ odds are slim.

“To be honest, the likelihood of winning when you’ve got so many shares and such broad shareholdings — it’s going to be difficult to unseat anybody,” Cernich said. Staff writers Rick Rothacker and Kerry Hall contributed.

Wages of Work and Welfare

wade — Mon, 27 Apr 2009 14:46:30 +0000

New Orleans Newspapers over the weekend from London to Washington and New York are full of stories about the increasing wages of the top dogs in the financial industries on Wall Street and the City of London. The estimates range from 10% to 25% hikes. Meanwhile we continue to struggle to figure out the most accurate and pragmatic rates for the minimum wages for workers in New Westminster, British Columbia, and Ottawa, Ontario. Where’s the justice here?
The bankers and their running buddies are merely trying to get around the new (and worrisomely, perhaps, temporary curtailments of bonuses), so are jacking up their pay envelopes within mere days and months after some of them were hang dogging around Washington and elsewhere, as if they had learned something from all of the greed and excess of the last several decades. A friend overheard, King Milling, a top officer and director of Whitney National Bank here in New Orleans, talking in a social setting about returning the TARP money, because there was no way he was going to be able to live on “only $500,000 a year.” Laugh, laugh. How quickly they try sneaking around and rewarding themselves at what is now often the public trough.
Such stories cast a cloud over conversations we are having across Canada and the USA with our allies and researcher friends about how to set the fairest living wage standard in major communities in Canada where these campaigns have not been as ubiquitous as the states. Should the wage be for an individual or be “family-based,” including childcare and other costs? Is $15 CN per hour the right wage in Ottawa? How much higher or lower in BC?
At ACORN International we sweat the loonies between $30K and $35K per year, while we read about our pockets being picked by folks who are driving the ships into the icebergs without a clue. Our friend at Whitney was having his chuckles within days of last week’s announcement that the bank lost over $11M during the first quarter.
Justice is coming!