Posts tagged ‘Unions’

Wealth And Inequality In America


Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

Debunking The Notion That Inequality Wouldn’t Impact The Economy | Addicting Info


It’s been claimed — incorrectly — that overall activity would neither be increased nor diminished by how evenly or unevenly money is distributed within our national economy. According to that line, we’d get the same amount of commerce regardless of whether we have a larger share of the pie held by the wealthy or by the lower and middle classes. “Money is money,” or so they say.

Except that in reality, lower average propensity to consume (APC) results from significantly increased real income.1 Who has how much matters because people tend to spend different portions of their income at different levels of wealth. Wealth and income distributions make a significant difference to effective demand. We’re not concerned with what people would like to have if they had enough money; we’re concerned with what people will spend with the money they’re getting. If Warren is a wealthy person and John is a poor person and over time Warren attains a higher share of the available money, total spending — effective demand — generated by those two consumers will drop.

If there’s $1,000,000 of total income between the two at time T1 and Warren gets $950,000 while John gets $50,000 and Warren spends 33.33%2 of income to John’s 100% of income, then total spending by these two individuals at time T1 will be:

T1: $316,635 + $50,000 = $366,635.00

When income ratios shift and there’s an inflation-adjusted $1,000,000 of total income at time T2 and Warren gets $975,000 while John gets $25,000, Warren’s spending ratio (APC) will likely have fallen slightly from the previous propensity, but we’ll stick with 33.33% for simplicity and understatement. Meanwhile, John can’t spend as much as before because John’s available funds have dropped. Even if Warren still spends at the same rate — which is unlikely — then total spending would be:

T2: $325,967.50 + $25,000 = $349,967.50

That would be a drop from time T1 to time T2 of $16,667.50 in inflation-adjusted spending. I’ve picked an arbitrary APC for Warren, but herein we’re just showing the rough effect. The dollar values are merely for illustration of the concept. Even if the exact average amount might vary slightly from the $16,667.50 of our illustration, the point remains that there would be a shortfall. With more of the money shifted to those with a lower APC, you get lower consumption which is to say lower effective demand.

Debunking The Notion That Inequality Wouldn’t Impact The Economy | Addicting Info.

Don’t Tell Me That Social Security Is Going Broke


390px; width: 640px”>

MyPeace.TV

Graduate Assistants Speak Out On Union


Posted on February 10, 2012 by Richard A. Levins

 One of the most annoying things about being a professor is the day you realize that your graduate students are smarter and more articulate than you are. At first, it bothers you terribly. Then, as time goes on, you come to accept it more gracefully. At least that’s how it’s been for me.

Perhaps you’ve noticed a few comments on my last posting on unions for graduate research assistants at the University of Minnesota. Some were in favor, some objected, but all were thoughtful and worthy of our attention.

I sent out a call for help in putting together my response. Sara Nelson, a graduate assistant and doctoral student at the University of Minnesota, offered something that I can’t improve upon.  So, I will simply quote verbatim:

“The bargaining unit is defined in Minnesota law – the only way to have a union is to have a union for all teaching and research assistants and graduate instructors.

“It is true that, as grad assistants, our work across the university varies greatly – but we are all grad assistant employees, and we are all affected by terms and conditions of our employment determined at the level of the upper administration (though the specifics of our employment are – and would continue to be with a union – determined at the department level). A union would give us the opportunity to negotiate on equal footing with the administration over these basic terms and conditions; a contract would be able to establish base pay, benefits, and job protections for all workers, but this does not mean a flattening of wages across the bargaining unit – above these minimums, diversity among departments is maintained and the functions of individual departments in setting competitive compensation is not curtailed. The fundamental point is that all graduate assistants across campus have the opportunity to provide their input on an initial contract and to vote on this contract, and grad assistants will not approve a contract that is not beneficial to them.

“Further, regardless of differences in pay and benefits, the union is able to give all graduate assistants democratic control in setting the terms and conditions of their employment, which are enforceable in a legally-binding contract.  Regardless of whether we feel satisfied with the status quo, the fact is that it can be (and has been) changed at the whim of the administration. My biggest concern, personally, is less increasing my compensation (though a cost of living increase every few years would be nice) than gaining this democratic control.

“Regarding strikes: strikes are extremely rare (more than 98% of contract negotiations are settled without a strike), and involve a sacrifice for any worker – they are a serious decision that no one takes lightly. Those of us in the social sciences and humanities who may not be funded on external research grants are still required to make progress in order to maintain our positions, and take our work as research and teaching assistants seriously enough not to abandon it except under the most dire of circumstances. A strike requires a 2/3 majority vote, in order to make sure that a super majority of members feel that a strike is absolutely necessary. Further, in the extremely rare case that grad assistants decide they need to strike, no one can be forced to participate in a strike or to discontinue work. The 2/3 majority is designed to ensure that a strike would have strong enough support to succeed.”

I thank Ms. Nelson for her help with this posting. More than that, I thank her and all of you graduate students who are working to find ways that a union can give each and every one of you a stronger voice in administrative decisions. You need it now and, believe me, you will need it much more when you take the next step in your careers.

shareshareshareshareshare

This entry was posted in Economic Policy, Labor Unions and tagged graduate student assistants, graduate student union, Richard Levins, UAW by Richard A. Levins. Bookmark the permalink.

He’s One of the Nation’s Highest-Paid CEOs—and You’ve Never Heard of Him


One of the nation’s highest-paid executives is sitting on a massive pile of stock options and enjoys a private jet wherever he goes. Gary Rivlin on John Hammergren, the 1 percenter you’ve never heard of.

James Reda thought he was beyond surprise when it came to executive pay.


But then Reda, a New York–based compensation consultant who sometimes puts together mega-pay packages on behalf of publicly traded behemoths, learned about John Hammergren, the CEO of the McKesson Corp., a giant medical-supply company in California. Hammergren is the $145 million man, top dog on the latest listing of the country’s highest-paid chief executives.

But so what if he made $145 million in a single year? The lion’s share of that money was the slew of stock options Hammergren cashed out after holding them for years. “That’s what you want,” Reda says. A new CEO gets a fat basket of stock options, and if the company does well, the CEO also prospers. “As long as the original stock-award amounts were reasonable, it makes no difference if it ends up providing a huge payoff,” Reda says.

Then I read him Hammergren’s annual total compensation payouts, taken from the company’s public filings with the Securities and Exchange Commission: $46 million in 2011; $55 million in 2010; $37 million in 2009; another $41 million in 2008. Hammergren hadn’t founded the company. Wall Street analysts covering McKesson can tell you of the disappointments and miscues that have marked his tenure. But his haul in the 13 years he has been running McKesson? More than $500 million, according to data provided by Equilar, an executive-compensation data firm.


John Hammergren, CEO of McKesson Corp., George Nikitin / AP Photo

For a moment, Reda is silent. “$40 million, $50 million a year is excessive, no matter what the yardstick,” he says. The average pay package for a CEO running a top 100 company these days, Reda says, is around $12 million. That includes everything, from salary to stock awards to contributions to a retirement account. Yet last year McKesson contributed more than $13 million just to Hammergren’s pension, according to company documents. Among the other perks he enjoys: a chauffeur to drive his company car, free use of the corporate jet for personal travel, and an extra $17,000 a year to pay for a financial planner because handling all those hundreds of millions is no doubt complicated stuff.

“He doesn’t leave anything on the table, does he?” Reda asks.

***

John Hammergren isn’t necessarily the highest-paid CEO in America. Sure, he topped the list when GMI, a well-regarded research firm, published its 2011 annual CEO survey in December. But that’s because he cashed out $112 million in accumulated stock options in a single year, according to GMI. He ranked 14th on Forbes‘s 2011 executive-pay list and 22nd on its 2010 ranking. And of course there are CEOs like Oracle’s Larry Ellison and Google’s Larry Page. Page has a net worth north of $15 billion, and Ellison is worth more than $30 billion, but then each was a cofounder of the company he runs.

Follow

Get every new post delivered to your Inbox.

Join 661 other followers