[Congressional Record Volume 163, Number 203 (Wednesday, December 13, 2017)]
[Senate]
[Pages S8013-S8016]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WALL STREET AND WORKERS' WAGES
Mr. BROWN. Mr. President, this month, this body has spent much of its
time pushing a tax bill that rewards corporations that ship jobs
overseas while doing nothing for hard-working families. It has spent
time cutting taxes on the wealthiest people in the country--cutting
taxes for corporations that ship jobs overseas and giving them more
incentives to do it by the way they have actually constructed the bill
and rewarding their largest billionaire contributors. At the same time,
they have ignored the Children's Health Insurance Program.
Letters are going out to families. There are 200,000 children in my
State who are enrolled in the Children's Health Insurance Program.
Parents in many States are getting letters from
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the government that read: Sorry, your insurance is going away. Because
of the inaction of this body--of Senators and House Members who have
insurance provided for by taxpayers--we are not doing our jobs. We get
insurance paid for by taxpayers while 200,000 children in Ohio and
60,000, 70,000, 80,000, 90,000, 100,000 families are going to lose
theirs. That is it.
We are giving tax cuts to the richest people in the country and tax
breaks to corporations that ship jobs overseas instead of fixing the
healthcare law, instead of doing the Children's Health Insurance
Program--instead of doing infrastructure, instead of doing the things
that we should be doing. Forget about what we are not doing to serve
the public; the priorities reflected in this tax bill are completely
backward, which has become pretty standard in this Congress.
Time and again, our economy, our leaders, our politics reward Wall
Street, not just instead of workers; we reward Wall Street at the
expense of workers. The people of Ohio and people around the country
are working harder than ever and working longer than ever, but they
have less and less to show for it.
Imagine this: 44 percent of Americans who have an emergency--that
would be four out of nine Americans--cannot afford that emergency
expense of $400. Four out of every nine Americans cannot come up with
$400 to pay for an emergency, but Wall Street is doing just fine. It is
getting richer. So what do we do? We give more tax cuts and more tax
breaks to corporations that outsource jobs, and we give more help in
the Banking, Housing, and Urban Affairs Committee for some of the most
profitable banks in America. Yet we can't do anything for workers, and
we can't do anything for families.
The wealth held on Wall Street has gone up. Corporate profits have
gone up. CEO salaries have gone up. CEO salaries are 271 times greater
than workers' pay. For a worker who makes $20,000--I almost can't even
do the math--it is 271 times that. Imagine that. For every $1 a worker
makes in the country, the average CEO makes $271. How much do they
need? Do you know what the answer to that is? Let's give tax cuts to
the people making $271 and maybe a few crumbs for the workers making
$1. Is that fair?
Over the next few months, I am going to lay out the case for how Wall
Street undermines American workers and lay out some of the changes that
we need to make in this country to grow our middle class and make hard
work pay off. Each installment of this series, which we are calling
Wall Street's War on Workers, will be posted on my medium page. You can
follow along at www.medium.com/@SenatorBrown.
Today, I want to talk about workers' paychecks. It is pretty simple.
It is really simple. Wall Street doesn't want you to get a raise. It
doesn't sound plausible. You heard that right. Wall Street doesn't want
you to get a raise. Let me explain. Wall Street tries to convince us
that when the stock market does well, the economy does well and vice
versa.
Well, look around. Visit the town where I grew up, Mansfield. Visit
Chillicothe, visit Dover, New Philly, visit Lima, Middletown or
Hamilton. Visit a community in my State that was once a proud
industrial town that has been hit by globalization. Talk to the
workers.
Stock prices are still going up. Yes, they are, and the President of
the United States likes to take credit for that as if that is the only
story. Talk to workers who haven't had a meaningful raise in years.
Talk to workers who have seen their retirement cut. Talk to workers who
have watched their healthcare premiums rise. Talk to workers who have
seen the cost of childcare and saving for their kids' college and
paying off their student loans go up and up and up. That is what
happened.
For most Americans, the idea that a stock market rally means more
money in their pocket is laughable. That is why, when the President--
even today, when he was talking about this tax cut, he was promising
that we are doing all these tax cuts for middle-class Americans. Well,
if you want to give tax cuts to middle-class Americans, give tax cuts
to middle-class Americans. Don't cut taxes on corporations, cutting
them 43 percent--that is what the bill does--if they would let us read
it. The last time I read it, that is what it said. They cut the
corporate tax rate by 43 percent. They say that money will trickle
down, you will get a raise, there will be more jobs. It has never
really worked that way. It didn't work in North Carolina that way. It
hasn't worked in Ohio that way. It simply doesn't happen.
The President stands there and says: We are going to give the best
tax cuts for Christmas you ever saw. He brags about the stock market
going up. One of the reasons two-thirds of Americans don't much like
this President is because they heard him brag about the stock market
and how great that is, but there is nothing in their own pockets when
he does that. The money is not trickling down. Workers aren't seeing a
$4,000 raise. Nobody really believes that.
The White House made up some phony study that said all this money is
going to workers' pockets. It never works that way. It didn't work that
way when President Bush--in 2001, 2003, President Bush did a big tax
cut bill. Let me give you one statistic about that tax cut bill in 2001
and 2003, those two bills. In that tax cut bill, 27 percent of the
benefits went to the richest 1 percent--27 percent.
The pages are pretty good in math because they are still taking math
class--27 percent of the benefits of that tax bill went to the richest
1 percent. That sounds pretty outrageous, because the richest 1 percent
didn't really need it. Now, in this tax bill, 62 percent of the
benefits in this tax bill go to the richest 1 percent--62 percent of
the benefits in this tax bill go to the 1 percent. Why is that? Well,
one reason is that a number of Members of Congress have said this. When
they go across the street to Republican headquarters to make their
fundraising calls, their contributors say: Don't call me back for
campaign money until you give me and my friends a tax cut.
Get that. Don't call me for campaign money until you go back across
the street and give me and my rich friends a tax cut. How corrupt is
that? How awful is that? How unfeeling is that? How counterproductive
is that for our economy?
The data backs that up. Workers' share of income has fallen over the
last four decades. Wage inequality has risen, especially at the largest
companies. Some may argue that workers who have retirement accounts
share in the benefits when the stock market does well. Only 50 percent
of private sector workers have these types of accounts at all, and they
use them to make long-term investments for their retirement. The short-
term profits that drive so much of corporate decision making have
little effect on accounts workers will not touch for several decades.
Just because workers have retirement accounts doesn't mean they are
able to save. In fact, 70 percent of Americans have less than $1,000 in
retirement savings.
Remember I said four out of nine or 44 percent of Americans couldn't
come up with $400 in emergency spending for a trip to the dentist or
$400 to fix a car? Four out of nine Americans couldn't come up with
that. Well, it is even worse because 70 percent of Americans have less
than $1,000 in retirement savings. Do you know why they have less than
$1,000 in retirement savings? Because their wages haven't gone up for a
decade or so.
The fact is, a paycheck is how most workers pay their bills every
month and put food on the table each night. Wall Street has a lot to
say about how much should be in that paycheck.
Remember, at the beginning of this speech, I stated that Wall Street
doesn't want you to get a raise. Some of my colleagues--particularly
those who get a lot of money from Wall Street and think Wall Street
should run the country even more than they do--but when I said Wall
Street doesn't want people to have a raise, here is how that works.
Last month, Bank of America downgraded Chipotle's stock because an
analyst decided the company employees were working too many hours and
getting paid too much. Wall Street downgraded their stock because the
analyst said their workers were making too much.
Do you remember what happened when American Airlines gave their
employees a raise? They were punished in
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the stock exchange. They were getting paid too much. The banks decided
that Chipotle employees worked too many hours and earned too much
money. The stock declined by 3 percent. It didn't matter that they were
profitable, employees were happy. It didn't matter that their employees
were productive. It didn't matter that they were a good company. Their
stock price went down because the analyst said they were paying their
workers too much. Some of you have been to Chipotle. I am guessing
their workers are not making $100,000 a year. I guess they are making
$10, $12 an hour.
I went to my high school reunion a couple of years ago. I sat across
from a woman who worked at a major national bank, a well-known bank. I
don't need to cite the name. When I worked at my family farm growing
up, I used to put my $120-every-2-week paycheck in that bank. It has
been sold several times and is now part of a major Wall Street bank.
She has worked there 30 years. She has been a teller in that bank for
30 years. She makes $30,000 a year. She has 30 years of service in this
bank and makes $30,000 a year. Do you want me to list what the top
management of that bank makes? Tens of millions of dollars in
compensation, stock options, and stock buybacks, huge dividends because
they own so much of the bank. This woman makes $30,000 a year. What is
right about an economy like that?
The entry level wage at Chipotle is between $9 and $10 an hour. It is
typical for fast food. It is clearly not enough to lift a family of
three out of poverty. So Chipotle wanted to give raises to their
workers, and Wall Street slapped them for doing it. Wall Street's
attacks on workers' wages have not been limited to Chipotle.
I mentioned American Airlines. They announced pay raises for their
pilots and flight attendants earlier this year. Wall Street punished
the company, dropping its stock by 5 percent.
Citibank, one of the Wall Street firms we sometimes talk about, is a
$2 trillion bank--somewhere close to that. I may be wrong about that,
but there are six banks in the country whose assets are over $1
trillion, as high as--I think JPMorgan Chase is higher. Citibank
analysts actually wrote this about American Airlines:
This is frustrating. Labor is being paid first again.
Shareholders get leftovers.
Think of that. So they gave their workers, their pilots--I assume the
Senator from North Carolina and Leigh and all the people at the desk
there--I think that probably you want airline pilots to be paid pretty
well. I think you do. Flight attendants make all the flying we do a
little bit easier. This company wanted to pay them more and Wall Street
says:
This is frustrating. Labor is being paid first again.
Shareholders get leftovers.
Really? Think about this. Companies are more profitable, CEOs are
getting paid more and more, and executive compensation is up, stock
prices are up, and workers are getting paid less. Then, when they want
to pay the flight attendants and the pilots a little more, they
complain because labor is being paid first again. Never mind that the
labor in question simply pushed to get paid the same as their
counterparts at United and Delta. Think about that.
American Airlines decided they should pay their workers who do
roughly the same job the same as United and Delta. They thought that
would be a good thing for competition reasons, for hiring workers, and
maybe even for Wall Street. Wall Street said: No, really, we don't want
that to happen.
I wonder how much that analyst at Citibank is paid. Some of you would
call that class warfare, but I would call it an interesting fact if I
knew what it was, but imagine the nerve of saying that shareholders get
the leftovers. When is the last time Wall Street got the leftovers?
By ``labor,'' what we are talking about is people who create wealth
for the company. It is the workers who create wealth. Management is
important, of course, setting the direction of the company and doing
all that management does in most corporations and does well, but rank-
and-file workers--whether it is the woman who cleans the floor or the
food service people in the basement, or whether it is the data entry
person or whether it is the mid-level management person, whether it is
the sales force, whether it is the CFO, workers create wealth for their
companies, and shouldn't they share in some of that wealth? Don't you
think pilots provide a lot of productivity and wealth to that company?
A JPMorgan analyst described the raises to the American Airlines
pilots a different way. He said it is a ``wealth transfer of nearly $1
billion to its labor groups.'' Think about that.
One of the things that amuses me--except it bothers me more--whenever
we talk about a wage increase, do you know what companies always say?
They say: If we raise the minimum wage for these $7 or $8 or $9
workers, we are going to have to raise prices and lay people off, but
they never say that when a top management employee gets a $1 million
raise. You only have to lay people off and raise the price of the
product if you raise the minimum wage, but if you give somebody a six-
or seven-figure bonus, you don't have to worry, that is not going to
cause anything. That is how phony these arguments are that they make
and frankly how revolting these arguments are.
Wall Street didn't call it a wealth transfer of $1 billion to its
labor group. Wall Street didn't call it a wealth transfer when the CEO
of JPMorgan got a 4-percent raise and was paid--anybody want to guess?
Do any of the pages want to guess? Does any of the staff want to guess?
Their CEO is paid $28 million a year, but that happens to be the same
company where the woman I sat across from at a high school reunion
makes $30,000 a year after 30 years of service. I don't wish him any
ill will, certainly, for the $28 million he makes. The people who work
directly with the public, who have to listen directly to the
complaints, who have to spend money coming to work and wearing nice
clothes because they are a bank teller, making $30,000 a year? What is
fair about that? None of the banks complained about that being a wealth
transfer.
Remember that line, a wealth transfer of $1 billion to its labor
group? None of the banks complained about a wealth transfer when Wells
Fargo CEO John Stumpf was allowed to retire with tens of millions of
dollars in compensation after overseeing a massive scandal that caused
the bank's stock to tank.
Do you know what I hear in the Banking Committee from time to time?
These CEOs, if their company has cheated people, their company has made
a huge mistake that caused problems for the company, they often come in
and say: You know, we are sorry--we are kind of sorry--and we are going
to give up our bonus. They say they are going to give up their bonus.
They are already making $8 or $10 or $12 or $15 million. Now they are
going to give up their bonus. How generous of them.
If paying employees is a wealth transfer, as the JPMorgan analyst
said, but CEO bonuses are not a wealth transfer, it raises the
question: Who exactly does Wall Street think the wealth belongs to? Who
does it think is creating the wealth for these companies? Companies
can't be profitable without the workers. Wall Street seems to think the
whole cake belongs to the CEOs and stockholders while workers only
deserve crumbs.
It has not always been like this.
In the past, banks actually invested in businesses and the workers on
Main Street, but the corporate business models have changed. According
to a recent analysis, only 15 percent of Wall Street funds are invested
in businesses, down from the majority of funds several decades ago.
Instead of investing in real businesses, in real towns that create real
jobs and build real communities, they spend billions buying back stock
and handing out CEO bonuses. This change has worked out pretty well for
Wall Street.
Even though Wall Street has 4 percent of all U.S. jobs, it accounts
for 25 percent of all corporate profits. Pretty good, huh? It is not
for that teller who works at the bank in Mansfield, OH, but for the
stockholders and the CEO. As anyone can tell you, it hasn't worked out
that well for most people.
CEOs are evaluated on the quarterly performance of their company's
stock. They are compensated, in large part, with company shares, but
most Americans don't think in terms of 3-month earnings quarters. They
think in terms of school years, they think in terms of 30-year
mortgages, and they think in
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terms of how many years before I retire and how much money do I have to
save to be able to.
Main Street investors and workers only make a profit when a company's
stock market value continues to rise over time. Wall Street and Main
Street's interests no longer match up. That is the problem with our
economy today. Wall Street's interest are not the same as Main Street's
interests. Wall Street does well, Wall Street gets bigger and bigger
compensation, and workers see their wages stagnate. Folks in the
corporate boardroom are not forced to consider what is in the long-term
interest of workers, what is in the long-term interest of small-time
investors, what is in the long-term interest of the communities that
have helped them grow and made them rich. For them, workers are nothing
more than a line item in a budget that ought to be minimized. It is why
they have no problem taking pay out of the pockets of workers--pay that
would otherwise drive innovation and productivity--all to boost short-
term profits for CEOs and speculators.
When you get short-term profits, you are going to get more money in
your bonus, you are going to get more money in your stock buybacks, and
you are going to get more money in your executive compensation. All of
it is set up and all of it is aimed at helping top management and top
stockholders enrich themselves. It is not giving back to the community,
not creating workers' wealth, and not investing in the future. It is
all about short-term profits because that means huge compensation for
the CEOs of America. Nothing in their business model forces these
executives to view the workers making burritos at Chipotle as real
people with real families.
I will go back to that. Chipotle did the right thing, and they gave
raises to their employees. American Airlines did the right thing, and
they gave raises to their employees. But the stock market, Wall Street
crushed them for it, and that is what has to change.
Until the banks and Wall Street respect a hard day's work and
understand that work must have a value for the economy to grow, we will
continue to see the consequences. The gap between Wall Street and Main
Street will keep growing. Workers' wages will decline. Our middle class
will shrink. Wall Street executives and CEOs will get bigger and bigger
bonuses.
We will continue here to give tax cuts to the richest people in the
country, and our economy and our economic growth will continue to lag.
The rich get richer and the middle class shrinks. That is the formula.
The rich get richer and the middle class shrinks. Haven't we had enough
of that? Why should we still be doing that?
I yield the floor.
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