[Congressional Record (Bound Edition), Volume 163 (2017), Part 14]
[Senate]
[Pages 19715-19718]
[From the U.S. 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

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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 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

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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 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

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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 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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