It wasn’t too long ago that the media discovered the “financial literacy” educational program that McDonald’s makes available to its workers. It purports to show its minimum wage employees how they can put $100 per month away in savings. Assuming, of course, that the employee has two jobs and pays $20 per month for health care. And doesn’t buy groceries or clothes. Seriously, these were the assumptions that made the $100 savings possible. The reality, of course, is that taxpayers, not fast food companies, help pay for these workers via food stamps and other public assistance programs. In the third quarter of 2013, McDonald’s earned $1.5 billion in profits. That’s up from last year. Stockholders are happy.
A signpost of the times appeared recently when reports surfaced that employees of a Walmart store in Ohio are holding a holiday food drive for less fortunate Walmart employees. The notoriously low paying retailer is one of the world’s wealthiest companies, but leaves it up to poverty-level employees to help out their coworkers who can’t afford a holiday meal. $17 billion in profits last year. Again, lots of employees turn to government assistance. Shareholders are happy.
I found a very interesting and convincing report of how Walmart could increase employee salaries by 50% without losing any stock market value. That would take a load off public assistance.
Here in the Seattle area, we have the largest aerospace company in the world and second largest defense contractor – Boeing. It earned $81.7 billion in 2012. Washington state just offered Boeing the biggest state tax giveaway in history – $8.7 billion spread over the years between now and 2040. It may not be enough, however. This massively profitable company getting a free ride from the state also needs to cut benefits for its machinists. The machinists union didn’t ask for anything. Boeing came to them with a proposal to reduce the pension plan, raise medical costs, and double the time it takes for an employee to reach the top of the pay scale (from 10 to 20 years). Boeing says this would save the company $2 billion over eight years.
This isn’t a company that pays its workers poverty-level wages like the two mentioned above. McDonald’s and Walmart are easy targets, but these Boeing workers would still be making good salaries after the cuts. Yet I see the same forces in play with Boeing. The company would gladly make its employees take a hit in exchange for an incremental profit boost when it’s already raking in record-breaking revenues.
It doesn’t have to be that way.
I work for a company that asks employees to tighten their belts a bit when times are bad, and conversely gives more to workers when times are good. All 5,000 of us are in it together. Walmart and Boeing don’t work that way. For them, humans are treated the same as material resources and squeezed whether profits are up or down. “Remorseless” is a good word for it.