We hear a lot of talk about job creation, and bringing jobs back to America. We hear nothing about the kind of jobs we need the most: jobs that provide decent wages.
While productivity has grown by more than 80% over the last 30 years, wages have effectively been flat for 80% of Americans. So, although we’re making stuff faster and more efficiently, the benefits of that hard work have not trickled into the pockets of the people who do it.
First, companies are coming back to the United States because wages here are dropping, in real terms. At the same time, lower-wage corporate nirvanas such as China are no longer as cheap an alternative as they once were, partly because the sea of people who worked for next to nothing for so long have had enough and are rising up in protest.
The US is becoming the place to outsource low paying jobs to.
Second, most of the jobs coming back are not high-wage, union jobs with full healthcare and pensions. In fact, with concerted efforts by Republican governors in the Midwest to eviscerate union rights, times have never been better for corporate leaders seeking to lower labor costs. With labor costs in the U.S. dropping relative to those in the Third World, the president’s offer of tax incentives to other companies that in-source is unnecessary. As Citizens for Tax Justice points out, using a 2007 Bush administration study, corporations based in the United States already have plenty of tax incentive to locate here because “the United States takes a below-average share of corporate income in taxes compared to other developed countries.”
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If you add those people to the people who have full-time work at or just above the minimum wage, at least 1 in 5 Americans — 30 million people — does not have a decent job. Which explains why, according to the Census Bureau, 46 million people — or about 15% of Americans — live in poverty, the highest percentage since 1993.
This is a nasty reality that politicians shy far, far away from, when they talk about jobs. Many of us (I’m one of that 15 percent) are relying on part time jobs, or low paying jobs that result in us not having enough to live on. This means more people relying on the shrinking safety net, and the kindness of family and friends.
We need the kind of jobs that will rebuild the middle class.
Florida Gov. Rick Scott and the Republican-controlled legislature are moving fast to privatize all 29 prison facilities in 18 counties in southern Florida.
Last year, the GOP prison privatization proposal was ruled unconstitutional because it was wrapped into a budget proposal, a violation of Florida laws that requires policy changes be in separate laws. Tallahassee Judge Jackie Fulford ruled that the lawmakers rushed the process.
The privatizers aren’t making the same mistake this time. Not only are they proposing to privatize the prisons but they are changing the law to be able to privatize any service as fast, as easily and as secretly as possible. Under the latest proposals, an agency would not have to report its privatization of a program or service until after the contract is signed. And they also would eliminate a current legal requirement to do a cost-benefit analysis before privatizing any government function.
In other words, don’t let the public know what you’re doing and don’t bother to find out the costs.
Scott, former CEO of hospital giant Columbia/HCA, came into office on a mission to privatize Florida government. Scott left HCA as the company was being investigated for the “biggest Medicare fraud case in U.S. history.” Columbia/HCA ultimately paid a record $1.7 billion in fines, penalties and damages.
Scott has already proposed privatizing the state’s Medicaid system, state parkcampgrounds, the state’s three remaining public mental hospitals, three centers for the developmentally disabled and six veterans’ homes.
The two largest prison companies, Corrections Corporation of America (CCA) and GEO Group (formerly Wackenhut), are poised to strike, in what Judith Greene, director of Justice Strategies calls, “an unprecedented” expansion of the use of private prisons that no other state has undertaken.
GEO has been a consistent force within Florida politics. GEO Group alone gave more than $400,000 to the party in the past election cycle. Geo Group‘s lobbyist, Brian Ballard, hosted Scott at his Tallahassee home to watch the Super Bowl. GEO Group and CCA donated nearly $1 million toward the Scott’s inauguration celebrations.
The state of the Main Street Blog is strong! This week we cheered President Obama’s announcement of a special unit to investigate financial crimes, headed up by New York’s foreclosure fraud crusader Eric Schneiderman. However, we expressed our reservations about whether the unit will have the funding, staffing, and independence necessary to hold banks accountable for predatory practices – like those experienced by our Pittsburgh member Alissa Kowal.
Meanwhile, despite the President’s announcement, a settlement deal is still underway. California’s Kamala Harris resisted the weak settlement, joining fellow “Justice Democrats” – Attorneys General Schneiderman, Martha Coakley, Beau Biden, and Catherine Cortez Masto. We explained why $25 billion sounds like a lot of money, until you compare it to an amount that’s actually needed to help underwater homeowners.
We compared this Justice League to the efforts of Florida Attorney General Pam Bondi – sorry, did we say efforts? We meant to say negligence and abdication of responsibility – on the foreclosure issue. GOP Presidential candidate Mitt Romney praised Bondi for her work on foreclosures in Florida, which Seth called “laughably backwards.”
Speaking of backwards, why should teachers have to work without pay while oil drillers get a break? We kept tabs on the education catastrophe in the Chester Upland School District in Pennsylvania. A judge ordered the state to release enough money for the district to keep running through late February, and Governor Corbett gave some obligatory lip service, but that’s not enough. We urged – and still urge! – our members to contact Governor Corbett to tell him to fully fund public education in Pennsylvania.
Also in the states, we heard from our Member Coordinator Michelle Kavanaugh in New Mexico, where the poverty rate is an unacceptable 18 percent – that’s 450,000 New Mexicans living below the poverty line. One solution, Sen. Peter Wirth’s Senate Bill 9, would close corporate loopholes while lowering the tax rate for all New Mexico business. If Gov. Martinez is serious when she says “shared sacrifice,” why wouldn’t she support it? If want to help us push for SB 9, call the New Mexico State Capitol Switchboard at 1-888-717-0911.
Last week, a federal judge ordered that the state of Pennsylvania release $3.2 million to fund the cash-strapped Chester Upland School District.
For the students, as well as the unionized teachers who worked for free for several weeks after the district ran out of money in early January, the trouble is far from over. That money will keep those schools running only until February 23, and the school board has sued the state for funding to take district through the end of the school year. Columnist Phil Heron rightly called it “a reprieve; not a pardon.”
It’s also increasingly clear that Chester Upland, which relies on state aid for 70 percent of its funding, might not be the last Pennsylvania school district to go bankrupt this year.
City Controller Alan Butkovitz told new schools chief Thomas Knudsen in a letter Wednesday that he would including a warning to bond-rating agencies in his annual independent audit report unless the district offers plans to close a massive projected budget deficit by the end of June.
“The Harrisburg School District, the York City School District, Allentown School District, the Reading School District and on the west coast there’s a district called Sto-Rox and another called Duquesne which are, if not totally out of money at this point, are on the verge of being totally out of money,” Gottlieb said. “Duquesne has been in straits for many, many years now.”
The problems stem from a decision made by Republican Governor Tom Corbett to slash nearly $900 million in state education funding last year. Despite the outcry for additional revenue, Corbett has been unwilling to take small steps to recoup funds; he has particularly stubborn in charging fees to oil drilling companies.
Corbett, responding to public pressure, finally joined legislative leaders on Monday to discuss the Chester Upland situation. After a 90 minutes conversation he told the press: “It will be up to everyone to work together to find an acceptable, long-term solution to this problem. A solution that will make sure this problem is not repeated in the future.”
Corbett unveils his next state budget in two weeks. He needs to make sure to give school districts enough funding to give students an education that prepares them for the future. What we’re seeing in Chester Upland and elsewhere is the result of a cut, slash, and defund policy that hurts kids, hurts teachers, and ultimately hurts the state.
Despite the announcement at the State of the Union of a task force to investigate predatory lending and other sketchy bank practices, the settlement between the state Attorneys General and the five biggest banks is still on the table. Yes, we were successful in stalling the settlement, but that doesn’t discount the fact a deal is still being worked out, and that a draft has been submitted to the states AG’s for approval.
The deal calls for only $25 billion in assistance, which as we’ve said is a great deal of money until you compare it with U.S. homeowners $700 billion in negative equity. Despite the fanfare, that amount would only help a small percentage of affected homeowners – many Working America members among them.
Calif. Atty. Gen. Kamala D. Harris’ office has called a proposed $25-billion settlement with the nation’s mortgage industry “inadequate.”
“We’ve reviewed the details of the latest settlement proposal from the banks, and we believe it is inadequate for California,” Shum Preston, a spokesman for Harris, said in a statement. “Our state has been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners and meaningful enforcement that ensures accountability. At this point, this deal does not suffice for California.”
Kamala Harris, along with Attorneys General Schneiderman (New York), Coakley (Massachusetts), Biden (Delaware), and Cortez Masto (Nevada), have been leading the charge against a weak settlement for months. Harris’ statement is a big deal because California, in addition to being a big state with a great deal of resources, has one of the highest foreclosure rates in the country. We agree with Harris – agreeing to this pittance of a settlement would be an abdication of her duties as California’s chief law enforcer.
If you want a great example of abdicating your duty as law enforcer, take a gander at Florida’s Republican Attorney General Pam Bondi. Bondi, a frequent Fox News guest and ally of the exceedingly unpopular Rick Scott, is also skeptical of a settlement, but not for the same reasons we are. She’s worried about the Big Banks being treated unfairly:
[With] a settlement taking shape last year, Bondi broke ranks with her counterparts and rejected it. That’s because the settlement would have mandated principal reduction—a measure that could help keep more homeowners out of foreclosure, but that would force banks and lenders to take a bigger hit on their balance sheets. “It seems like she’s balancing the interest of businesses with the interest of Floridians when it comes to principal reduction,” state Rep. Darren Soto (D-Orlando) told the Sentinel. “When you’re the AG, you have one interest: Floridians. You’re supposed to be the consumer advocate, first and foremost.”
When you follow the money, you can see one possible reason why Bondi is interested in a slap-on-the-wrist settlement: she’s received campaign contributions from executives and employees of ProVest and Lender Processing Services – two big foreclosure mills.
We’re cheering this move by Kamala Harris, as well as the efforts of her fellow “Justice Democrats” Eric Schneiderman, Martha Coakley, Beau Biden, and Catherine Cortez Masto. Our members have acutely felt the pains of mass foreclosures in their neighborhoods, communities, and families. These AG’s shouldn’t stop fighting until we get a full investigation of foreclosure fraud; something with a strong budget, adequate staff, and the authority to go after the people accountable for kicking millions of Americans out of their home.
As for Pam Bondi, whether her inaction on the foreclosure crisis really is the result of her campaign contributions or mere negligence, it’s just a reminder of why people are so cynical. Owning a home used to be part of the American promise – this is an area where government needs to help, regardless of party.
A hearty thank you and best wishes to Rep. Gabrielle Giffords, who resigned today in order to focus on her recovery after a devastating assassination attempt.
The following is a guest post from Working America Member Alissa Kowal from Pittsburgh, Pennsylvania
I am so happy to see that in just 10 days, over47,000 people participated in Working America’s campaign to hold big banks accountable for their unethical foreclosure practices.
I am a Working America member, a Pittsburgh native, a single mother of three, and a Duquesne University graduate. I have worked in an array of fields, including interior design, real estate, and architectural sales.
A few years ago, one of the companies I worked for went bankrupt due the housing and construction crisis in America. As challenging as that experience was, it is not the worst encounter I have had with unethical bank practices.
In the spring of 2009, just after the federal program to assist homeowners was established by the Obama Administration, my mortgage company sent me a notice saying that I may qualify for home mortgage remodification. I called my bank, and it took them just ten minutes over the phone before they let me know that I qualified for a modification, and they gave me a lower payment.
After following the modification payment plan, to my surprise I received a foreclosure notice in the mail. The bank informed me that my modified payments did not actually apply to my mortgage. I was then “re-modified” several times, each time at a different amount. I again maintained my payment agreements, yet still continued to receive foreclosure notices. None of the payments that I made went to the balance of my mortgage or the interest that I owed, they were applied to “fees” that the bank added to my account for late and missed payments and my tax escrow account.
After receiving my third foreclosure notice I contacted my State Representative who sent me to Community Action Southwest. They assisted me in dealing with the bank to ensure they followed the remodification guidelines they had been ignoring. I was finally refinanced, with no credit check or financial documents.
I am now stuck with a mortgage that is fifteen years longer than it originally was. The bank took all the modification payments I made and, after applying them to escrow, kept the rest as profit. They decided those months were “missed payments” and added that sum to the original mortgage, increasing it by $25,000. My equity is completely gone and my credit is destroyed.
Per Community Action Southwest, I am one of hundreds of homeowners in my area who have been misled by banks like Wells Fargo and Bank of America. I feel lucky that I have experience in business and real estate, because I knew something ethically was wrong. How many other people went through this and simply had no idea what to do in such a complicated financial situation?
Right now, the Obama administration, the Department of Justice, and the banks are discussing what consequences the banks will have to face because of their exploitation of the American taxpayer, the American homeowner, and the federal modification program. Last night, the President has also announced the creation of a special unit to investigate financial crimes.
We need to ensure that any final agreement includes a thorough investigation into bank practices, and sufficient financial assistance to homeowners struggling due to unfair practices.
Last night’s State of the Union address revolved around themes of fairness and rebuilding America’s middle class. As in any speech of this size, there was a lot to absorb. What we found most interesting was President Barack Obama’s emphasis on not repeating the mistakes that led us to the economic catastrophe of the past few years.
It’s encouraging that President Obama paid special attention to the issue of housing and financial-sector fraud. Tens of thousands of Working America members and union members called for a real investigation into banks and their role in causing the housing crisis, and the President announced the creation of a new task force to investigate fraud in his speech last night.
We will have to watch this task force closely. We can’t have an investigation just for show, one that doesn’t take a comprehensive look at wrongdoing and impose real penalties. What powers will the investigators have, and who are they? The co-chair of the panel is Eric Schneiderman, the New York state Attorney General who has led opposition to a bad deal, which is encouraging. But David Dayen, a close observer, is skeptical of the panel and thinks it may be a way to ease us into an insufficient settlement. As we’ve said before, we can’t accept a deal that lets big banks break the law and abuse consumers without being held responsible.
We’ll also be looking closely at the President’s pledge to help homeowners refinance, which could provide some much-needed assistance to struggling families.
The State of the Union message showed that, in many ways, President Obama is attuned to the economic crisis that’s still ongoing in our country. His insistence on extending the payroll tax cut for working families is important, as is his attention to investing in infrastructure jobs and schools, which creates jobs now and builds economic strength for the future. His proposals on job training and support for companies that “insource” good jobs to America’s communities are encouraging as well.
Our members understand that politics is about priorities. With limited resources, we have to choose whether to keep tax breaks for the very wealthiest and for corporations that outsource jobs, or whether to use those revenues to support programs that seniors, students and families depend on. President Obama showed that, like most Americans, he’d choose the latter. Now it’s up to Congress to decide where they stand.
Giving the response tonight: Indiana’s Gov. Mitch Daniels, the former Bush budget official now overseeing the possible passage of an anti-worker law in his state.
Cordray to House GOP: Consumer protection isn’t just for consumers–it protects honest businesses from unfair competition with ones that break the rules.
