ThinkProgress Logo

Economy

Minnesota To Grant Care Workers The Right To Join A Union

On Monday, a bill squeaked through the Minnesota House of Representatives that would allow in-home child care and personal care workers in the state to unionize. By a margin of two votes, the state House of Representatives sent the bill to Gov. Mark Dayton (D), who is expected to sign it.

SEIU and AFSCME, the state’s largest unions, now have four years to organize those workers:

The 12,500 child care workers in Minnesota who look after children in the state’s Child Care Assistance Program, known as C-CAP for short, must vote on whether or not to join the union by 2017. At least 50 percent of the state’s providers will need to join in order of the union to be established.

Those who do not provide care to C-CAP families will not need to vote and will not be affected.

If care workers vote to unionize, the union will be able to negotiate the size of reimbursements from clients who use subsidies and members will be able to file grievances. The bill doesn’t give them the right to strike.

These positions are part of a booming industry. Personal care jobs are expected to grow by 70 percent over the next decade, much faster than the average. Child care positions are expected to jump by 20 percent. Yet the pay in both areas is low. Median annual wages are about $19,600 for personal care aides and $19,300 for child care workers.

How To Close The Loopholes That Made Apple’s Tax-Dodging Completely Legal

Apple CEO Tim Cook testified Tuesday before the Senate Permanent Subcommittee on Investigations, following that panel’s report that Apple has avoided tens of billions of dollars in U.S. tax liability through complex, lawful multinational structures. Cook was the latest head of a major technology company to face Senate scrutiny for its corporate tax behavior, after the same panel summoned Microsoft and Hewlett-Packard executives in September 2012.

Just as his competitors did before the same Senate panel last fall, Cook defended his company’s tax strategies as both legal and in his shareholders’ interests. Cook’s endorsement of corporate tax reform was more specific than the broad support Microsoft executive Bill Sample offered last year. But his support for lowered rates, closed loopholes, and doctrinaire reforms is unlikely to take the heat off the eye-popping tax behavior that inspired the hearing.

The panel’s investigation found, with Apple’s cooperation, that the company’s three Ireland-based subsidiaries “have no tax jurisdiction at all,” as The Guardian explains, allowing it to shelter tens of billions in sales from not just U.S. but all taxation.

The complex arrangement includes three subsidiaries, based ostensibly in Ireland, which appear not to be designated as tax resident anywhere, the committee said. A source on the committee called them “iCompanies – I for imaginary, invisible”.

The commitee said that the arrangement, described by one senator as “the epitome” of tax-avoidance schemes, allowed Apple to pay only very small amounts of tax on much of its overseas profits, thanks to the Irish companies that exist “nowhere” for tax purposes. […]

One of those Irish affiliates, Apple Sales International (ASI), reported sales income of $74bn over four years but paid hardly any tax. In 2011 ASI had pre-tax earnings of $22bn but paid just $10m in tax, a rate of 0.05%.

Citizens for Tax Justice says Apple is holding fully $102 billion in untaxed offshore cash. The Financial Times notes Apple is careful to maintain appearances, however. It’s reported tax rate of 25.2 percent for 2012 “is an accounting entry and has no effect on the actual amount of taxes paid,” which amount to more like a 15 percent effective tax rate.

Throughout the hearing, both senators and witnesses repeatedly acknowledged that Cook and his fellow executives are indeed operating within the law. The dispute is over how policymakers should respond to a corporate tax code so riddled with loopholes and bad incentives that Apple and other multinationals behave in this way. As corporations have manipulated the flaws in that tax code and payroll taxes have increased, working people have replaced companies as a primary source of tax revenue:

One response to the flawed corporate code, supported by many businesses, would be to offer a tax holiday on repatriated profits currently sheltered overseas. Congress tried such a holiday before, and it was a massive failure. Cook’s rejection of this approach was heartening, but the rote ‘simplification’ of the system he repeatedly endorsed amounts to what’s known as a territorial approach, whereby loopholes are closed and the tax code is rewritten such that companies pay U.S. taxes on U.S. revenues.

For all their simplicity, such territorial systems encourage an international race to the bottom on corporate taxation, as Europe has discovered. Last week, Bloomberg’s Jesse Drucker detailed the perverse corporate tax outcomes created by European policymakers who talk about making it harder to dodge taxes but whose policies actually make it easier.

Threading the policy needle between race-to-the-bottom territorial policy, tax holiday giveaways, and the current ineffective legal web is quite difficult. But economist Alan Auerbach has one idea, explained in a paper jointly published by the Center for American Progress and the Hamilton Project, that would seem to balance both government and corporate interests. Auerbach suggests that multinational companies pay their taxes only in the countries that use their products, so that moving money across borders doesn’t alter the taxes they owe in any given country. Tim Fernholz of Quartz explains that Auerbach’s idea strips “the ability to move US profits overseas” artificially, as present law has encouraged Apple to do. With a few other tweaks, this could make it more attractive to invest in the U.S.

So far, today’s hearing has not entertained this notion of destination-based taxation on multinational activity. But it’s the sort of Gordian Knot approach to a longstanding, costly policy tangle that might appeal to the head of a company that once made “Think Different” its global slogan.

Congressman Who Gets Millions In Farm Subsidies Denounces Food Stamps As Stealing ‘Other People’s Money’

(Credit: Nashville Public Radio)

Rep. Stephen Fincher (R-TN) agitated against food aid for poor Americans included in the Farm Bill during last week’s House Agricultural Committee debate, accusing the government of stealing “other people’s money.” Funding for the Supplemental Nutrition Assistance Program (SNAP) has already been decimated in both the House and Senate versions of the Farm Bill, cutting off nearly 2 million working families, children, and seniors from food assistance.

Fincher invoked the Bible in his defense of the devastating cuts, quoting, “The one who is unwilling to work shall not eat.”

At a Holiday Inn in Memphis over the weekend, Fincher expanded on his version of the Christian social gospel: “The role of citizens, of Christians, of humanity is to take care of each other, but not for Washington to steal from those in the country and give to others in the country.”

While Fincher interprets food assistance for the needy as “stealing,” he has not similarly condemned the Farm Bill’s massive agricultural subsidies. In fact, he supported a proposal to expand crop insurance by $9 billion over the next 10 years. Fincher has a great personal stake in maintaining these particular government handouts, as the second most heavily subsidized farmer in Congress and one of the largest subsidy recipients in Tennessee history:

USDA data collected in EWG’s 2013 farm subsidy database update — going live tomorrow –shows that Fincher collected a staggering $3.48 million in “our” money from 1999 to 2012. In 2012 alone, the congressman was cut a government check for a $70,000 direct payment. Direct payments are issued automatically, regardless of need, and go predominantly to the largest, most profitable farm operations in the country.

Fincher’s $70,000 farm subsidy haul in 2012 dwarfs the average 2012 SNAP benefit in Tennessee of $1,586.40, and it is nearly double of Tennessee’s median household income. After voting to cut SNAP by more than $20 billion, Fincher joined his colleagues to support a proposal to expand crop insurance subsidies by $9 billion over the next 10 years.

As the Environmental Working Group notes, crop insurance subsidies have no limits on their recipients’ income levels. Therefore, the bulk of the crop insurance is paid out in million-dollar installments to a small group of large farm businesses, while the bottom 80 percent of farmers receive roughly $5,000 a year. SNAP, on the other hand, limits aid to income below 130 percent of the federal poverty line, or $30,000 per year for a family of four.

Workers Explain How Unions Changed Their Lives

Unionization levels have been falling for decades and last year hit a low not seen in a century, with just 11.3 percent of workers represented. That’s the lowest level since 1916. Strikes, one of the greatest sources of power for labor unions, have also become increasingly rare.

That’s bad news for the middle class. In a new video series, the Center for American Progress showcases three stories that demonstrate the important role union membership plays for working families struggling to get by.

La Tonya Johnson was a unionized child care worker in Milwaukee until Wisconsin Gov. Scott Walker (R) cracked down on collective bargaining rights in the state:

With the help of a union, La Tonya says she was “able to afford to pay my mortgage, I wasn’t facing foreclosure, and life was relatively comfortable,” thanks to a guaranteed weekly wage regardless of which children actually showed up to her daycare center each day. After her ability to join a union was repealed, she lost that guarantee, and she descended into poverty. “It feels like I’ve hit rock bottom over night,” she says. “For people who think that having a union or being organized doesn’t have a bottom line effect, I’m here to tell you that it does.”

Susan Kim and Jeremy Pikser, writers in New York, explain that a union has helped them to pursue their passions while maintaining a decent quality of life:

While Susan had misgivings at first, she quickly learned the benefits of joining a union. “It made really clear sense to me when I started seeing more money, when I started qualifying for health insurance… Suddenly I had a pension plan which I’d never had before.” The effects were even starker for Jeremy. He was diagnosed with throat cancer in 2008 and had to undergo an expensive course of treatment, “which would have beyond bankrupted me” without quality health insurance negotiated by the Writers Guild, he says. “It probably did save my life because I probably wouldn’t have been able to get the level of care that I got.”

Beresford Simmons has been driving a New York City taxi for more than 45 years and is a member of the non-traditional union the Taxi Workers Alliance:

The union has seen recent success, winning a 17 percent fare hike and health care coverage. That’s meant a lot to Beresford and his wife. “With unionization from the Taxi Workers Alliance, we could afford to put a roof over our head,” he says. He says he’s a part of the union because “I just don’t want to see the next generation of cab drivers go through the same thing that I’ve been through.”

No State Earns A Top Grade For Promoting Economic Security For Working Families

The federal poverty line, $23,550 for a family of four, is considered the minimum amount a family needs to get by. Yet many families need much more to cover all the costs they face and truly feel economically secure. Most Americans say a family of four needs nearly $60,000 to “get by.”

State policies play a big role in helping families to achieve this sense of economic security. Yet a new scorecard from Wider Opportunities for Women (WOW) has found that most states don’t have a comprehensive policy regime. While some stand out in a few areas, no state has fully addressed all of the needs of working families.

Looking at 85 different policies, including the minimum wage, Earned Income Tax Credit (EITC), family and sick leave, public education spending, savings and retirement support, and support for child care, health care, and housing, the scorecard granted each state a grade on “their potential to improve the economic security of workers, families, and retirees.” No state in the country received an A or B grade – the highest, for Washington, was a B-. Most states received grades between a C+ and a C-, while four got the lowest, a D+. An overview of how each state fared can be found in this map:

The states that fared best are those that have strong policies on the minimum wage and EITC. Many states also improved their grades thanks to policies that promote savings and eliminate asset eligibility tests for social programs. Yet most fared poorly on family leave, paid sick days, flexible work arrangements, and unemployment insurance. Many still rely on the low federal floor set in these areas.

While some states may counter that their budgets are constrained, making it difficult to implement more robust policies, WOW’s report found that the grades were “not strongly related to a state’s median income, budget size or fiscal health.” Therefore, it found, “these factors do not define a state’s ability to improve its residents’ security.”

Many states have been pulling back on these investments, cutting spending on things like public education, child care, and higher ed, often in lieu of raising taxes. This report may provide evidence that there is room to improve policies to support working families.

Low-Wage Workers Strike In Washington, Sixth City In Wave Of Actions

Service workers at four buildings in Washington, D.C., are going on strike Tuesday, putting a human face on a recent report about federally-contracted workers stuck with unlivable wages. Starting at the Ronald Reagan Building and moving through two Smithsonian museums and Union Station, the city’s commuter rail and Amtrak hub, the strikes are the latest in a wave of low-wage worker actions designed to make service sector employment economically sustainable. The local progressive radio station WeAct Radio is maintaining a livestream of the day’s actions here.

The strike follows similar actions by private-sector workers in other major cities. Fast food and retail workers in New York City, St. Louis, Milwaukee, Detroit, and Chicago have walked off the job in recent weeks to demand wage hikes. Like those workers, the men and women striking in the capital Tuesday are struggling to tread water economically, even while working full-time. The difference for these most recent participants in the spreading service worker action is that they are paid, indirectly, by the federal government.

As the policy think tank Demos reported in early May, federal dollars are connected to more low-wage jobs than Walmart and McDonalds combined:

We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. […]

These workers represent a large spectrum of occupations, from workers sewing military uniforms to hospital aides funded by Medicare, security guards with contracts to protect public buildings, and food cart vendors at the National Zoo.

President Obama has proposed hiking the federal minimum hourly wage to $9, from its current $7.25 level. While opponents point to gradual increases from 2008-2010 as sufficient, the reality is the minimum wage still has less buying power than it did in the 1970s.

This public policy failure is also a major component of the gender wage gap that persists today. Working Americans in six major cities are now organizing to combat Congress’ failure to ensure that service work is livable.

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up