Boycott Family Dollar. Makes Walmart look good on employee compensation

The security cameras that were all over the store didn’t catch a thing when a robber stepped behind the counter and pointed a gun at the manager’s head, that’s because they were fake. The manager had just taken over the store after 8 years with the company. She’d lived in the neighborhood most of her life and knew most of the customers. On her second day in charge, the back wall of the store had collapsed, and water had poured in. Three weeks later, they were only coming around to get estimates on repairs.

In the time she’d been promoted to manager, the Chief Operating Officer of Family Dollar had both appeared on “Undercover Boss” and left the company to “pursue other interests.” He probably had a hard time living with his conscience, realizing that the company exploits workers and is part of what’s wrong with America today. Sure, showing up on “Undercover Boss” and playing Santa Claus is great- but, bailing out a few people doesn’t mean the rest of the company’s employees won’t hate you for your stunt.

The robber fired a shot in the store. Luckily, no one got hurt. The new manager wanted to quit, but jobs are hard to find. She has 2 kids and a disabled baby daddy. The robber has continued on a spree, hitting several other dollar stores. The police think they are close to finding him. Family Dollar put a security guard in the store for about a week- and added real video surveillance cameras and panic buttons throughout the store.

But, here is the crazy part. The “manager” wasn’t being paid as a manager yet.  After 8 years with the company, most as an “assistant manager”- she was still getting paid a whopping $9 an hour. The manager’s job, which pays a whopping $800 a week, wasn’t hers yet- she was an “acting manager.” And I always thought actors were paid better than their real-life counterparts.

My advice was to tell them that if she’s not being paid as a manager, she’s not responsible to do the duties of one. Their response was to cut her hours back to 30 a week and that she “no longer had a store.”

A little poking around online finds that Family Dollar has settled lawsuits galore, for violations of the Fair Labor Standards Act, and that their expectations of “managers” amount to being slave labor that must work 60 hours plus to make things work via their allotted budgets. Meaning management is lucky to make around $13-$14 an hour. This is a company that’s traded on the New York Stock Exchange.

Who invests in companies that engage in corrupt and illegal labor practices? Where are the investigations by state attorneys general into a company that’s been sued and lost in several states over its crappy practices? For all the people that talk about unions being the demise of American manufacturing- it’s these kinds of management practices that gave unions their moral high ground to organize.

And the store that had the shot fired- used to qualify as one of the “high-risk” stores eligible for higher manager pay, but they took away that status too- just weeks after the robbery.

One other well documented despicable practice of this “business” is that when employees leave the company they aren’t entitled to cash in their earned vacation time. As a condition for hiring, you are forced to sign that right away.

Family Dollar stores don’t deserve to be in business with business practices like this. Boycott Family Dollar.

16 years of education, and not a single memorable worksheet

Tonight, Dayton has the opportunity to hear one of those “experts” come in and tell us the secret to education. This one is a “Sir” as in knighted by the queen, as an “educationalist.”

Sir Kenneth Robinson will be giving a free talk at the UD Rec Plex gym at 7:30 pm. But, you can watch these two videos and get a good idea of what he’ll say.



Sir Ken’s specialty is talking about the teaching of creativity. The arts- the non-mass production of education. To bring passion back into learning and the educational process. And while I agree that creativity is one of the most undervalued skills in education these days- and, possibly in life, the problems of our education system may well be mostly moot compared to research about talking to your child before age 5, as pointed out in an opinion piece in today’s NYT:

the key to early learning is talking — specifically, a child’s exposure to language spoken by parents and caretakers from birth to age 3, the more the better. It turns out, evidence is showing, that the much-ridiculed stream of parent-to-child baby talk — Feel Teddy’s nose! It’s so soft! Cars make noise — look, there’s a yellow one! Baby feels hungry? Now Mommy is opening the refrigerator! — is very, very important. (So put those smartphones away!)…

All parents gave their children directives like “Put away your toy!” or “Don’t eat that!” But interaction was more likely to stop there for parents on welfare, while as a family’s income and educational levels rose, those interactions were more likely to be just the beginning.

The disparity was staggering. Children whose families were on welfare heard about 600 words per hour. Working-class children heard 1,200 words per hour, and children from professional families heard 2,100 words. By age 3, a poor child would have heard 30 million fewer words in his home environment than a child from a professional family. And the disparity mattered: the greater the number of words children heard from their parents or caregivers before they were 3, the higher their IQ and the better they did in school. TV talk not only didn’t help, it was detrimental.

via The Power of Talking to Your Baby – NYTimes.com.

What kind of change could we make in Dayton Public Schools performance by rewarding neighborhoods that set up neighborhood reading sessions for pre-k kids every day? A community that reads together may create the kind of learning community that can start to overcome the obstacles of poverty that have proven to decrease student performance.

But, thinking back over my own education- there is one indisputable fact: I remember about half a dozen teachers/professors profoundly- Susan Forde, Steven Young, Larry Geiger, David DiCarlo, Dr. Cleary, Dr. Jacobs- but I don’t remember a single worksheet, standardized test, or even textbook.

Great teachers, who stir up emotions, who challenge you to think, to come up with answers that aren’t fill in the blank, or memorization exercises, are the ones who made the difference.

Our new “Common Core” still suggests that one-size fits all, and that people need to know certain things- instead of how to solve uncertain problems.

Life isn’t as easy as fill in the blank. There are always many different solutions to every problem. That’s why I’m interested in hearing Sir Kenneth tonight- to see if he can make me think about things just a little differently. I hope I see you there.

Who’s the criminal part 2: IMR or CareSource?

I lost a few good friends when I wrote the post, “Who’s the criminal? SCLC, Montgomery County or CareSource?

It wasn’t something you publicly say when the payroll taxes of CareSource are the only thing keeping the City coffers filled then or now.

Once again, the government is pursuing the little guys instead of the big ones. Remember in the early 80’s when we had the Savings and Loan scandal- that the bankers went to jail, but since 2009 not a single banker has gone to jail over the collapse of the global economy? Last time it was the FBI going after Raleigh Trammell (whom I saw at the non-candidates forum Wednesday night) now, it’s the people who run Richard Allen Academy for $860k:

Who’s the criminal? SCLC, Montgomery County, Caresource? – See more at: http://esrati.com/whos-the-criminal-sclc-montgomery-county-caresource/4325/#sthash.mUIjPHz0.dpuf
Who’s the criminal? SCLC, Montgomery County, Caresource? – See more at: http://esrati.com/whos-the-criminal-sclc-montgomery-county-caresource/4325/#sthash.mUIjPHz0.dpuf
Who’s the criminal? SCLC, Montgomery County, Caresource? – See more at: http://esrati.com/whos-the-criminal-sclc-montgomery-county-caresource/4325/#sthash.mUIjPHz0.dpuf

The Ohio auditor’s office on Thursday again issued findings for recovery involving Dayton’s Richard Allen Academy charter schools, saying their management company, Institute of Management and Resources Inc., owes taxpayers nearly $860,000.

“It doesn’t appear that much has changed at the Richard Allen schools,” Ohio Auditor Dave Yost said in a statement. “Once again, mismanagement of public dollars was found. Ohio’s taxpayers and our children deserve better.”

The new findings include $730,000 that auditors said was overpaid to IMR during the fiscal year ending June 30, 2011. Additionally, there was nearly $130,000 in school funds that either found their way into IMR accounts or were IMR expenses improperly paid by the schools, said Bob Hinkle, chief deputy auditor.

via Charter schools criticize audit that claims state is owed… | www.daytondailynews.com.

And I ask again, CareSource doesn’t have any business other than taking Federal funds directed to help the poor and distributing them. For that, they pay their CEO Pam Morris over $3 million a year. Her pay is set by the people that get the money that she distributes- the Hospitals. They are also “non-profits” yet pay, in the case of Premier Health Partners- a whole bunch of executives 7 figures, including a few who make $4 million a year.

Do you see a pattern here? It’s time the federal government and local governments, be prohibited from doing business with companies that pay their CEOs millions per year in these times where we are calling for austerity. There is zero valid reason to earn over a million a year other than to rub your money in the faces of the less fortunate- and to continue to play the stock markets like a slot machine. Too many people in this country are living at or below the poverty level- losing their homes, struggling for health care- while the Federal Government has bailed the bankers out.

Now, IMR isn’t totally off the hook. While the Richard Allen Schools are at the top of school performance charts in Dayton- which is unlike a majority of the charters, they recently told their employees that the organization wouldn’t be able to pay their health insurance premiums for the next three months and then announced that payroll would no longer be done through direct deposit, but that they would have to pick up their checks.

The US government is the largest purchaser of goods and services in this country. If Congress really wanted to cut spending, or stimulate the growth of small business which is the real driver of employment in this country, stop arguing about raising taxes on the rich- just stop doing business with them.

Looking for tax revenue in all the wrong places: Kasich

The changes to taxes and distribution under the Kasich administration has had devastating effect on local governments. Most are scrambling to replace revenue that used to come from the “local government fund” and the windfalls of the inheritance tax used to prop up some communities that wouldn’t exist had it not been for wealthy residents kicking the bucket and consequently kicking in millions to the general fund:

That unpredictability has been most palpable in Elizabeth Twp. The Miami County township received $16.1 million in 1999 and $20.7 million in 2002 in estate tax revenues, both linked to the estate of Yellow Pages magnate John W. Berry.

That immense revenue is in stark contrast to other years – 2003, 2006 and 2009, for example – in which Elizabeth Twp. received no estate tax revenue.

via Communities find losing estate tax money painful.

Shifting tax burdens is never easy, and almost always, someone gets hurt more than others. In general, taxes are able to be classified as progressive- as in the tax increases on those that have more- or regressive, as the tax affects those with less more. Sales tax is considered a regressive tax by most accounts- and due to the digital divide, it has become even more regressive- many internet shoppers don’t pay a sales tax when buying from companies that don’t have operations out of Ohio (Amazon being a prime example). Now, our governor wants to “lower the sales tax” but increasing the number of things it is applied to. I remember being shocked when I moved to Georgia as a teen and finding that groceries carried a sales tax- something Ohio deems an essential and excludes.

Kasich wants to lower the state sales tax rate by half a percentage point, lower local sales tax rates by varying amounts and expand eligible goods and services to generate about $3 million over three years. Revenues from sales tax and higher taxes on oil and gas extracted from Ohio soil would fuel across-the-board income tax cuts.

via Changes to Kasich tax plan.

In my business, advertising, the only thing I charge sales tax on is the printing of business cards, letterheads and envelopes. Anything that’s considered advertising- is exempt. It has always seemed a little odd to me. However, with Kasich’s sweeping sales tax expansion, all we’re doing is shifting taxes around to be collected under a different vehicle. Instead of one kind of tax, we’re going to another. Sales tax depends on businesses to self-report and collect, whereas other taxes are collected by the government. Tracking tax liability in all cases requires monitoring and collecting and with these sweeping changes, many businesses will have added expense, complexity and be subject to fines (haircuts are pretty much a necessity, much like food and medical care, yet will no longer be excluded. When Joe Hairdresser doesn’t file properly, the state can send an estimated tax bill that would far exceed the real liability, never mind how much hair is cut on a cash basis).

Of course, since our governor is a former Wall Street banker, a very needed tax isn’t being considered- the Wall Street transaction tax. This video explaining the “Robin Hood tax” as they are calling it in the UK makes it very clear where there is room for a new tax that would have benefits of slowing down a wild Wall Street’s programmed trading and volatility that has hurt us all:

Yes, I understand this isn’t a tax that Governor Kasich can levy, but it would be a start to protecting public pensions, investments and ordinary citizens’ retirements from the fake economy created by churning fiat paper that is so weakly linked to actual company performance. Kasich has no problem taxing casino revenue- but, our country hasn’t addressed the biggest casino of them all- Wall Street. Here is a brief bit about what the transaction tax would do from the New York Times:

On this side of the Atlantic, there is a ghostly silence on a transaction tax in respectable political quarters. But that might change. This month, Senator Tom Harkin, Democrat of Iowa, and Representative Peter DeFazio, Democrat of Oregon, plan to reintroduce their bill calling for just such a tax.

A transaction tax could raise a huge amount of money and cause less pain than many alternatives. It could offset the need for cuts to the social safety net or tax increases that damage consumer demand. How huge a sum? Mr. Harkin and Mr. DeFazio got an estimate from the bipartisan Joint Committee on Taxation, which scores tax plans. It’s a hearty one: $352 billion over 10 years.

The money would come from a tiny levy. The bill calls for a three-basis-point charge on most trades. A basis point is one-hundredth of a percentage point. So it amounts to 3 cents on every $100 traded.

And the bill contains some exemptions intended to make the tax more politically palatable. The first sales of stocks (initial public offerings) and bonds are exempted, so that the markets’ capital-raising function isn’t harmed. Initial investments and withdrawals from tax-protected accounts, like retirement or education funds, also have a measure of protection.

via Time to Revive the Financial Transaction Tax – NYTimes.com.

With the growing economic divide in the United States the last thing we need to increase is a regressive tax like the sales tax while leaving other areas like Wall Street virtually exempt from taxation- where even the revenue generated is taxed at a lower rate.

The one big question I have about the new Ohio sales tax reduction is: Will the counties and RTA all get a windfall from their sales tax overrides (Montgomery County and RTA currently collect an extra 1% on sales taxes) that will now extend to more goods and services? I’ve missed the details on this part- if so, local governments will probably fall in line to support it, just out of pure necessity thanks to Kasich’s other tax cuts that have devastated their financial base.

School funding in Ohio needs to address the digital divide

If you are reading this, more than likely you have internet access. In fact, you probably take it for granted. Not so in many of the homes with doors I knock on to campaign for the Dayton City Commission. Using Google to look things up, or email to communicate is as foreign to them as airplanes were to the caveman. While Dayton Public Schools was considering a “bring your technology to school” program to allow kids to bring netbooks, tablets, laptops and e-readers to school, the elephant in the room was that some kids are lucky to have shoes to wear to school.

Governor Kasich just pulled yet another fast one in his new school funding plan. He made sure to provide a way to send public money to private schools (of course, only when those schools weren’t doing their jobs) but he didn’t take the much needed step to make sure every student has equal access to the technology (and increasingly- teach-knowlegly) that is essential to doing anything remotely resembling a job in today’s society.

Kasich proposed several new programs outside the school-funding formula, including $300 million in one-time grants for innovations that lead to cost-reductions.

The voucher program would provide $8.5 million in fiscal year 2014 and $17 million in fiscal year 2015 from a separate fund and would not be deducted from school districts. Students in households below 200 percent of federal poverty level — a family of four making $46,100 or less in 2012 — would be eligible.

Students entering kindergarten would be eligible in the first year and the program would expand to first grade and kindergarten in 2014-15. Vouchers would also be offered to students in schools that fail to pass third-graders who read at grade level.

The vouchers would be paid from a separate fund and would not be deducted from school districts.

Currently, Ohio offers private school vouchers to students attending chronically low-performing schools through the EdChoice program. EdChoice vouchers cover $4,250 for elementary and middle school students and $5,000 for high school students, a portion of what public schools receive per student.

via KASICH: MORE FUNDS WITHOUT ANY CUTS.

If the Governor really wants to see “Achievement Everywhere” it’s time to address this basic fundamental of a modern education- access to the internet and a device to take advantage of it are essential. And, while we’re at it, we also need to realize that what we consider “high-speed internet” is still woefully slow, even where people do have U-verse or FIOS, we are still virtual snails compared to what the people of South Korea are using. And when it comes to rural Ohio- where the only “high speed” option is typically a data capped cell phone connection, we’re still in the stone age.

The value of universally accessible high speed internet to Ohio’s students with devices capable of providing a rich internet experience is as essential, if not more important than teachers with Masters degrees or even current textbooks. We live in a day when those of us with an internet connection can teach ourselves anything from multiplication to string theory physics by utilizing Massive Open Online Courses (MOOC) taught by the leading thinkers in almost any subject. Grant the ability of every Ohio student to access these, and maybe we will find that “school funding” in the traditional sense wasn’t the real issue at all. The lawsuit demanding equal funding was caused by the inequity of taxes between rich and poor districts- which is also the difference between rich and poor homes. If we make sure the poor homes have equal access to the global repository of knowledge, we may start seeing a leveling of the educational playing field.

And before any of you start talking about how the poor kids’ parents will sell off their kids’ computers for crack, when these computers are bought in the same quantities as textbooks, we’ll have huge cost savings via purchasing power, the computers will be trackable, and lastly, they will save us potentially billions in paper, mailings, and textbook purchases very quickly. As a side benefit, you and I may actually see a huge drop in the cost of Internet access and an increase in speeds as Ohio spans the digital divide and moves into modern times.

 

Ohio Minimum Wage Chump Change Raise vs. the Maximum Pay Jackpot

Ohio raised the minimum wage 15¢ an hour to a whopping $7.85 per hour for 2013.

Making minimum wage gives you annual earnings of $16,328 — a $340 increase.

Tipped employees will receive a minimum wage of $3.93 plus tips. Employees younger than 16 must be paid no less than the federal minimum wage, which remains $7.25, unchanged since 2009.

Wow.

A local “business leader” weighs in with his opinion:

“Raising the minimum wage to this high of a level sounds like another good intention, but it can have bad results,” said Greg McAfee, founder and owner of Kettering-based McAfee Heating & Air. “Many companies can’t afford to pay $7.85 to an employee who, because of lack of experience or training, may only be worth $6 per hour.

“I know there are some trying to support families on minimum wages, but I am not for our government mandating what any employer should pay or make, for that matter,” McAfee said.

New workers in the heating, ventilation and air-conditioning industry often see starting wages of $9 to $10 an hour, McAfee added.

Michael Saltsman, a research fellow with the Washington, D.C.-based Employment Policies Institute, warns that minimum wage increases “redistribute” income among low-wage families, with businesses often raising prices, cutting workers’ hours or doing a combination of both.

Low-income families end up worse off, Saltsman said. And businesses making only “a couple of cents on the dollar” profit margin — independent or small grocers, full- or limited-service restaurants and some retailers — will be harmed, he said.

“Essentially, you have some gaining at the expense of others,” he said.

via Minimum wage in Ohio rises to $7.85 an hour.

As a small business owner, I can tell you that the most expensive part of hiring anyone is the first 3-6 months, where you are training and evaluating performance. Getting people up to speed- even if it’s “flipping burgers” ends up costing more like $15 an hour, with the supervisor, the mistakes, and of course the time spent filling out all the government forms and getting them into your payroll. If the government really wanted to help small businesses with hiring low-skill people and getting them up to speed- they would give small businesses a payroll credit for the first three months for anyone who stays longer than 9 months total.

However, in the same day’s paper, there is an article about the skyrocketing costs of medicine being purchased by the Pentagon.

Department of Defense drug spending has ballooned by more than 123 percent since 2002, from $3 billion to $6.8 billion in 2011, according to Tricare officials. That outpaces by nearly double the overall pharmaceutical sales in the United States, which grew about 67 percent over that time, according to annual reports from IMS Health, which tracks sales for drug companies.

via Pentagon drug budget soaring.

Sure, the cost of treating so many more disabled vets due to the never ending wars in Iraq and Afghanistan is part of the reason for the increase in costs- but, if we look at what drug company top management is making, it’s a lot more than minimum wage.

They were led by giant Pfizer, with more than $8 billion in sales from the Department of Defense since 2002.

via Pentagon drug budget soaring.

Pfizer CEO Ian Reed has done OK by jacking up sales to the Pentagon which is protecting his company from harm- he tripled his pay in one year:

Pfizer Inc. nearly tripled CEO Ian Read’s compensation in 2011, his first full year as top executive of the world’s largest drugmaker, which has been cutting costs and making other moves to compensate for generic competition hurting sales of top medicines.

Read, 58, received compensation worth a total of $18.12 million in 2011, up from $6.42 million in 2010, according to an Associated Press analysis of a regulatory filing Thursday by the maker of Viagra and cholesterol fighter Lipitor.

via Ian Read, Pfizer CEO, Sees Pay Nearly Triple In First Year On Job.

Who pays his salary? Why, the taxpayers of course, including those making minimum wage. While it’s almost impossible to live on $16,328 a year- it’s really easy to live on $18.2 million. In fact, I’m pretty sure that poor Ian, would have to hire people just to help him spend his money- if he even could find things to buy (other than investments, stocks, bonds etc). Here’s the math:

A salary of $1.82E7 equates to a monthly pay of $1,516,667, weekly pay of $350,000, and an hourly wage of $8,750.00.

via Convert my salary to an equivalent hourly wage | Calculators by CalcXML.

Just as a note, the first calculator I found wouldn’t even take that many zeros in the annual pay field.

Just suppose, the United States government, the largest purchaser of goods and services, all of a sudden stopped buying products from companies that pay their executives more than, say, 40x their average employees’ salary? Either the minimum wage would go up, the company would go broke without being able to sell to Uncle Sam or, we’d actually start seeing some of the real controls in spending that the Republicans in Congress keep calling for (as long as we don’t cut spending to either their local pork projects or with their campaign donors).

It’s time for a maximum wage policy in the United States so that the people at the bottom aren’t subsidizing those at the top who are raping our country’s coffers to pay for their extravagant salaries.

The union of decent human beings

Before Wisconsin Governor Walker tried to make state-sponsored union bashing into sport, and before the labor union movement in the twenties, what just happened in Bangladesh, where 112 people died in a sweat shop making clothes for Wal-Mart used to happen here. Exploitation of human capital for profit is nothing new.

The only question is how long can we force ourselves to look away?

Wal-Mart’s simple answer is to deny they knew about it, then cut off one head of the serpent- and hope it goes away:

Wal-Mart said Monday that the factory, owned by Tazreen Fashions Ltd., had been making clothes for the U.S. retail giant without its knowledge. Tazreen was given a “high risk” safety rating after a May 2011 audit conducted by an “ethical sourcing” assessor for Wal-Mart, according to a document posted on the website of Tazreen’s parent company, the Tuba Group.

Wal-Mart said the factory was no longer authorized to produce merchandise for Wal-Mart but that a supplier subcontracted work to it “in direct violation of our policies.” The retailer said it stopped doing business with the supplier Monday.

“The fact that this occurred is extremely troubling to us, and we will continue to work across the apparel industry to improve fire safety education and training in Bangladesh,” Wal-Mart said in a statement.

via Bangladeshis mourn garment-fire dead, plan protest | www.daytondailynews.com.

But, just blaming Wal-Mart isn’t fair. The computer I’m writing this on, made for the “most valuable” company in the world- Apple, is assembled by people working in sub-standard conditions for sub-standard pay. Both companies are based in the USA- but do very little actual making of the goods they profit from here. Both companies also pay their executives exorbitant salaries and bonuses, based in part, by their ability to stand on the backs of people who are earning a subsistence wage.

It doesn’t have to be this way. It is possible to pay people a living decent wage, provide health care, work in safe conditions and still make money. Need proof? My friend Bridget had this NYT article in her Facebook feed about Costco and its CEO Jim Sinegal- I’ve extracted the relevant parts:

Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco “it’s better to be an employee or a customer than a shareholder.”

Mr. Sinegal begs to differ. He rejects Wall Street’s assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street’s profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense. “This is not altruistic,” he said. “This is good business.”

He also dismisses calls to increase Costco’s product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street’s advice to raise some prices would bring…

IF shareholders mind Mr. Sinegal’s philosophy, it is not obvious: Costco’s stock price has risen more than 10 percent in the last 12 months, while Wal-Mart’s has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.Mr. Dreher said Costco’s share price was so high because so many people love the company. “It’s a cult stock,” he said.

Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco’s workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent…

“When Jim talks to us about setting wages and benefits, he doesn’t want us to be better than everyone else, he wants us to be demonstrably better,” said John Matthews, Costco’s senior vice president for human resources.

With his ferocious attention to detail and price, Mr. Sinegal has made Costco the nation’s leading warehouse retailer, with about half of the market, compared with 40 percent for the No. 2, Sam’s Club. But Sam’s is not a typical runner-up: it is part of the Wal-Mart empire, which, with $288 billion in sales last year, dwarfs Costco….

Despite Costco’s impressive record, Mr. Sinegal’s salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.

“I’ve been very well rewarded,” said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. “I just think that if you’re going to try to run an organization that’s very cost-conscious, then you can’t have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong.” (emphasis added)…

Besides paying considerably more than competitors, for example, Costco contributes generously to its workers’ 401(k) plans, starting with 3 percent of salary the second year and rising to 9 percent after 25 years.

ITS insurance plans absorb most dental expenses, and part-time workers are eligible for health insurance after just six months on the job, compared with two years at Wal-Mart. Eighty-five percent of Costco’s workers have health insurance, compared with less than half at Wal-Mart and Target.

Costco also has not shut out unions, as some of its rivals have. The Teamsters union, for example, represents 14,000 of Costco’s 113,000 employees. “They gave us the best agreement of any retailer in the country,” said Rome Aloise, the union’s chief negotiator with Costco. The contract guarantees employees at least 25 hours of work a week, he said, and requires that at least half of a store’s workers be full time.

via How Costco Became the Anti-Wal-Mart – New York Times.

And while I’m sure Costco is buying inventory made by subsistence workers as well, the expression “charity begins at home” comes to play in that at least Costco workers aren’t on food stamps like most Wal-Mart workers. When we hear about the rise of “entitlements” and the “47% who don’t pay taxes” being bandied about by politicians who pan-handle their way into power by accepting campaign payola from companies like Wal-Mart, why aren’t we asking if there is a better way? Instead of spending $^ billion on winning/losing elections, or subsidizing the payroll of companies like Wal-Mart, why aren’t we looking to build a system that only rewards those who create jobs that wouldn’t embarrass the company when the conditions are revealed (hence Wal-Mart cutting off the company that just incinerated 112 people).

It’s not about tax rates, as Warren Buffett just pointed out (once again) in another letter to the New York Times, it’s not about entitlements, it’s not about “Obama care” it’s about creating a country where “all men are created equal” and given an equal chance to contribute.

Our national pride should be on the line- not based on wars won or lost, or our “democratic process” (which isn’t so democratic when you realize that only with the help of the wealthy can anyone get elected)- but based on the common decency we grant to all.

The ratio model for CEO pay that Jim Sinegal abides by should be the first step in any process to fixing our country’s financial mess. Forget the maximum tax rate of 39%- tax compensation over a 40 to 1 ratio at 90% and see how fast things change. If Wal-Mart paid its employees enough that they didn’t qualify for food stamps and their executives weren’t spending millions buying favorable laws from the pan-handling politicians, as our nation’s largest private employer things would be a lot different.

Maybe even starting with 112 less dead people in a sweatshop.

 

 

How to cut the cost of Medicare and save tax dollars

Medicare is a major financial driver for healthcare in Ohio; the government insurance program for the elderly and disabled younger people paid for 41 percent of all medical services at Ohio hospitals last year, according to the Ohio Hospital Association.

via Hospitals’ Medicare funding cut over readmissions | www.daytondailynews.com.

There is no arguing that America pays more for health care than any other nation, and gets less. In the same breath, you can also hear that independent physicians are going as far as leaving medicine, despite shortages of physicians, because they claim that they can’t make money accepting the reimbursements from both Medicare and private insurers.

Republicans talk about spending cuts all the time. Paul Ryan is under attack for wanting to transform Medicare by turning it over to private insurers (which is exactly what we’ve done in Ohio and specifically with a major business that’s been propping up Dayton- CareSource).

CareSource has been in hyper-growth mode as a manager of Medicare/Medicaid dollars, getting more government money for every citizen that enrolls in their managed care program. They then sit between the government and the health care providers and try to ration and manage tax dollars to provide the “highest quality care” for their clients.

But here’s the rub. All of these private companies that count on government tax dollars for large parts of their income, 41% for hospitals, and 100% for companies like CareSource aren’t subject to any effective cost controls. How do we know this? The CEO of Premier Health Partners, makes $4 million a year, and most of his top staff makes a seven-figure salary. The CEO of CareSource makes $3 million a year. Her salary is set by, get this, a board made up of her customers- the hospitals.

Congressmen often make fun of the proverbial $650 toilet seat or the $700 hammer, but, with Medicare/Medicaid paying 41% of hospitals’ revenue, and 100% of CareSource, why don’t we have wage controls on these government contractors? The same can be said of defense contractors, although the main difference is that no defense contractor is pretending to be a non-profit.

In NY there is currently legislation being discussed to cap non-profit executive pay at $199,999 and it’s already in place in NJ. I remember outrage over 20 years ago when the CEO of the Red Cross was toppled for a salary over $1.5M but can’t find the reference right now. Adjusted for today’s dollars it would dwarf the salary being paid to our local chiefs.

Government contractors over a certain size are even told how much they have to pay each worker in a specific position. A secretary is proscribed to be paid $21.08 an hour in one package I looked at. How come we don’t have maximums required as well? Part of the reason politicians refuse to address this, is that without being able to make over a million a year for running a “non-profit” health-care  operation, many of these emperors without clothes wouldn’t be able to make huge contributions to their campaign funds. According to open secrets, health-care professionals were the 5th largest donors to political campaigns in the 2008 election.

Of course if we eliminated private money from political campaigns we might get the politicians we need instead of the best money can buy.

Access to affordable health care in this country is a farce. Any major illness almost always comes with bankruptcy as a side-effect. Small businesses struggle with insurance costs that climb between 20% and 40% annually, without offering better coverage. It’s a small step, but ending the exorbitant salaries of semi-public employees (those who make 40% of their income from our tax dollars is a good starting point.

Chutzpah alert: as a small business owner, who is also a community activist, I’m publishing this piece at the same time as I’ve requested a meeting with Premier Health Partners President and CEO James Pancoast to discuss the benefits of a real bike-share program in Dayton and the environmental, economic and health benefits to the community. A first class system could be bought and paid for with 75% of his annual income, leaving him a cool million to still keep food on his table and gas in his tank.

I’m betting that he won’t be willing to meet with me, blaming my criticism of the system that makes him a very rich man, with our tax dollars. This is the America we have. Unfortunately, because our leaders apparently don’t read history, they are ignoring what inevitably happens with all republics that allow the gap between the haves and the have nots to get too wide.

 

Has perfecting the weapons of war made war obsolete and terrorism the only option?

Throughout history, with each new war-fighting technology the inventors thought they had created the ultimate deterrent to war. From the catapult, to the machine-gun to mustard gas to nuclear bombs and ICBMs the idea that if you build the ultimate weapon, war as we know it will end, because who would be stupid enough to attack knowing they would be guaranteed to lose and die?

The problem with this entire scenario has been pointed out time and time again, that wars aren’t fought by the people who start them. It wasn’t George W. Bush on the front lines of “Operation Iraqi Freedom” nor was it Congress.

Make that slight change, and we’d stop making war and probably make some real progress in our country.

There are two very different military weapons systems that amaze me as a rational, thinking former paratrooper- and both give me reason to believe war as we know it is obsolete.

The first is the ultimate infantry weapon- the Switchblade man portable drone:

Seeking to reduce civilian casualties and collateral damage, the Pentagon will soon deploy a new generation of drones the size of model planes, packing tiny explosive warheads that can be delivered with pinpoint accuracy….

The new Switchblade drone, by comparison, weighs less than 6 pounds and can take out a sniper on a rooftop without blasting the building to bits. It also enables soldiers in the field to identify and destroy targets much more quickly by eliminating the need to call in a strike from large drones that may be hundreds of miles away.

“This is a precision strike weapon that causes as minimal collateral damage as possible,” said William I. Nichols, who led the Army’s testing effort of the Switchblades at Redstone Arsenal near Huntsville, Ala.

The 2-foot-long Switchblade is so named because its wings fold into the fuselage for transport and spring out after launch. It is designed to fit into a soldier’s rucksack and is fired from a mortar-like tube. Once airborne, it begins sending back live video and GPS coordinates to a hand-held control set clutched by the soldier who launched it.

When soldiers identify and lock on a target, they send a command for the drone to nose-dive into it and detonate on impact. Because of the way it operates, the Switchblade has been dubbed the “kamikaze drone.”

via Pentagon to soon deploy pint-sized but lethal Switchblade drones – Los Angeles Times.

Never again will grunts be pinned down by a sniper who has the high ground, never again will a mortar tube behind a hill or a howitzer miles away be a problem. Pull out one of these compact air forces in your back pack and kill the enemy. There is nowhere to run, nowhere to hide and no need to call in air support.

Of course, further in the article, we see foreshadowing of the next problem: creating a way to defend against enemies with the same weapons:

The Switchblade “is symptomatic of a larger problem that U.S. military and aerospace companies are generating, which is producing various more exotic designs,” said Daryl Kimball, executive director of the Arms Control Assn. “This technology is not always going to be in the sole possession of the U.S. and its allies. We need to think about the rules of the road for when and how these should be used so we can mitigate against unintended consequences.”

The Switchblade is assembled in Simi Valley by AeroVironment Inc., the Pentagon’s top supplier of small drones, which include the Raven, Wasp and Puma. More than 50 Switchblades will be sent to the war zone in Afghanistan this summer under a $10.1-million contract, which also includes the cost of repairs, spare parts, training and other expenses. Officials would not provide details about where the weapons would be used, how many were ordered and precisely when they would be deployed.

The second system is the gold- and diamond-encrusted F-35. What? It’s not bling? At a cost of $135 million each and a total cost of a trillion and a half dollars for around 2,400 planes rational people have to wonder what else you could do instead of buying weapons of war and investing in avoiding war? The project has doubled in cost, while our enemies that we can fight with these planes have been replaced by people who live in caves or compounds cut off from technology.

The basic premise of war is to take by force what is not yours and control it. The deployment of the nuclear bombs by the U.S. to end WWII broke one part of that equation- in that there was nothing left of Hiroshima or Nagasaki worth controlling after the bombing. A big part of the reason we were willing to use the bomb was because the Japanese had shown a dedication to fight to the death, to even sacrifice their lives as kamikazes to win at all costs. War no longer works when one side doesn’t care if they die or not.

This is why terrorism exists and why better, bigger, faster weapons are obsolete. A terrorist’s goal is to take and control the intangible, he doesn’t want your property or your country, he wants to take residence inside your head and control your thoughts and emotions. We don’t win wars with guns and bombs but with psychology and propaganda. Osama Bin Laden may be dead, but he gave our country new irrational fears that we’ve reacted to in asymmetrical fashion to a radical degree.

With the cost of these wars bankrupting our country and the policies of the people we’ve put in power creating an economic divide, we have become the kind of country that bred the very people we’ve sworn as our enemies. Countries with incredible poverty ruled over by a rich monarchy or a corrupt un-democratically elected government. With every single local government struggling to pave roads and keep street lights on, we have wasted trillions building schools and hospitals in Afghanistan and Iraq.

With the ability to change our government beyond the reach of the common man, with congressional seats costing well over a million dollars apiece and Senate seats way more, we are heading in the same direction as war- the only options left are unconventional and our next “American Revolution” will start much as the first one- by “terrorists.”

Those who don’t learn from history are doomed to repeat it.

Ignore this at your own risk. It’s time to question how we can continue to believe we can buy peace with weapons of war. We don’t need to elect Democrats or Republicans anymore- we need to elect members of the peace party, or we’ll forever be doomed to a world at war.

Pay caps at public housing authorities but not at other poverty targeted programs?

I’ve asked the question many times- how can the CEO of a “non-profit” that gets its entire funding from the federal government to distribute and manage tax dollars targeted to the poor- pay herself $3 million a year?

How do hospitals, which receive a lion’s share of their revenue from Medicare and Medicaid, claim “non-profit” status, get to skip out on property taxes, yet pay top executives $4 million a year?

How do defense contractors, with huge cost overruns on military programs, justify these overruns while paying their top executives seven-figure salaries?

Yet the President of the United States makes only $400,000 and members of Congress take home less than $200,000 a year. Seems like something is seriously wrong with these compensation structures.

Well, the federal government must be paying attention, because they’ve now enacted limits on directors of public housing authorities- a grand step in the right direction toward fiscal accountability in a country where taxpayers are now being assigned an extra tax to pay for street lights (while the same politicians have no problem giving away multimillion dollar facilities to vulture capitalists).

The Department of Housing and Urban Development is instituting a permanent salary cap of $155,000 for top officials at public housing authorities, following reports of oversized compensation packages that included roughly $600,000 for the top official at the Atlanta Housing Authority….

“When Americans across the country are struggling to make ends meet and then they turn around and see public officials making hundreds upon hundreds of thousands of dollars, it just creates public cynicism about the federal government,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan budget watchdog organization. Lack of transparency in government spending allows “hijinks like this to occur,” Ellis added….

Earlier this year HUD announced a $155,500 cap on top executive salaries at larger public housing authorities for the 2012 fiscal year. The new plan would make the new limits permanent and apply them to all forms of compensation paid for with federal money.The new regulations would cap salaries for top officials at $125,926 at housing authorities with between 250 and 1,249 units and at $88,349 for agencies with fewer than 250 units.

via Officials move to limit pay at public housing authorities | oregonlive.com.

I’ve called for limits on pay based on average wages of employees in publicly traded companies to restore sanity to our financial system which is now being manipulated with disastrous results to create short-term stock inflation instead of long-term stability and growth.

I’ve also called for the federal government to stop doing business with companies that can’t justify outlandish pay gaps between payroll and executive perks and pay.

It’s time to put some sanity back into compensation systems so that pay is actually connected to risk and accountability to shareholders and taxpayers.

If you want to make outlandish money, feel free to take your company private and not do business with the government, because we can’t keep subsidizing public housing or the life styles of the rich and plunderous.

It’s now obvious that our government can step in to limit pay, the question is when are we going to do it across the board to restore our country to financial health and fairness?