It's a story told so often that we know the ending well before the last chapter. Company suffers losses, bankruptcy looms, and workers sacrifice their rights to collective bargaining, and lose their pension and benefits to save their jobs while company executives not only keep their benefits and pensions, but also receive generous bonuses.
It's a national embarrassment that the same executives who steer a company to the brink of collapse are given preferential treatment with the remaining assets. What's alarming is that current law actually favors this type of activity.
The Bankruptcy Code ranks creditors that have a financial claim against the company in bankruptcy proceedings. The ranking assigned by the Code determines which entity has priority to get paid first from the company's remaining assets. Workers who have pensions with investments in company stock are ranked as shareholders and are, in fact, among the last to be paid.
It's become standard operating procedure for companies to use bankruptcy or the threat of bankruptcy to shake down its employees.
Take, for example, the Tribune Company, a media giant that has been mired in bankruptcy proceedings since December 2008. Tribune paid management bonuses during this period totaling $46.5 million while salary and benefit freezes were mandated for the workers who hadn't already been laid off.
Workers for auto parts supplier Visteon also suffered a similar fate. Their company, which filed for bankruptcy in May 2009, was allowed to reward management with bonuses up to $35 million, including up to $6 million for senior executives, while closing plants and terminating retiree health benefits. Now Visteon is trying to terminate pension plans.
We are accustomed to hearing this story over and over again. It is time we changed the ending.
After having focused on the problem of jobs lost overseas through the bankruptcy process over the past few years, I began wondering how eager executives would be to pursue Chapter 11 if they couldn't use it to bust unions and if they could derive no personal reward from it.
I took up this idea with some House and Senate colleagues and we drafted a bill to bring some common sense to corporate bankruptcies. To me, common sense means that if workers are expected to take a hit, then CEOs better expect to share the pain.
What may seem like common sense to you and me isn't how the business world has been operating, so our bill takes steps to level the playing field for CEOs and their employees as their companies enter Chapter 11 bankruptcy. Specifically, our bill takes the following actions.
• Makes it tougher to reject collective bargaining agreements.
• Prevents companies from preserving management retiree health benefits while reducing everyone else's.
• Allows workers to assert claims for losses in certain defined contribution plans when such losses result from employer fraud or breach of fiduciary duty.
• Establishes a new priority administrative expense for workers' severance pay.
• Clarifies that back pay awarded via WARN Act damages are entitled to the same priority as back pay for other legal violations.
It seems inconceivable, but during the worst economic downturn since the Great Depression, the number of millionaires actually increased 16% over the past year. While I am not one to begrudge someone else's financial success, I do not suffer kindly those who cheat people out of their hard-earned wages, pensions, and health care in pursuit of a bigger bonus.
This measure is urgently needed to protect the jobs, benefits and retirement plans that provide for many working class families. These reforms will provide transparency to the bankruptcy process and change the Code so that executives must accept the same cuts in wages, benefits and pensions that they ask of workers.
It's time to level the playing field and eliminate the abuse our bankruptcy laws so we can have a better ending, not the same old story.
Reaganomics and the redistribution of wealth it created killed the America Dream, it brought about true MOURNING IN AMERICA. If the '80's taxes cuts had had a two year sunset clause to reboot the financial system it would have spurred investment without the massive loss of revenue to our now bankrupt gov't . Instead it was more tax cuts. It is the difference between a martini and a gallon of vodka that leaves you, not with a hangover, but alcohol poisoning.
When the stock market hit bottom last year it was Obamas fault now that it is possible it will hit 12,000 this year that must be because of BUSH! Just pretend the last eight years did not happen, vote the Republicans back into office and they promise more of the same.
I want to know what the hell is in that tea these people are drinking and is it illegal, 'cause I want sum!
And if wages are not rising then how can Democrats claim there is a labor shortage? I bet you didn't know that Obama and the Democrats still claim there is a labor shortage in the US. They do. And this month is the next auction for American jobs to foreigners. Where I work we never hire Americans, we never even get to see American resumes (they filter them out using a third party company and that makes it all legal).
So next time you hear any Democrat talk about jobs just remember they still think we need to import more foreign labor into the US because there is a labor shortage.
Are you an American? If so, how did you get a job at a business that "never hires Americans"?
The middle class (household income between $35,000 and $75,000 in real 2007 dollars) shrunk from 1970 to 2007 (from just over 40% of households to just over 30% of households). So did the lower class (household income below $35,000). The upper class (household income over $75,000) rose from less than 20% of households to over 30%.
"Congressman" and it would just about get us all to the same conclusion. As a matter of fact, if you replaced "CEO" with "Government" and it's intrusion on individual private companies and property, we may actually be able to have a legitimate discussion about what is causing most of the job losses in America we're seeing today. Government policies and regulations intrude upon, prohibit and then prevent actual "free markets". Then politicians turn around and blame the market that government actually controls. NAFTA, GATT, continual over-regulation, and out of control spending by the government has caused most of these problems in the first place. Government doesn't make anything. It doesn't create products, goods, services, jobs, wealth, or tax revenue. All it does is drain the resources of those that produce. It's really a "parasitic" type of rhetoric to blame the host for what the pathogen is destroying.
Congressman Conyers was elected to his job. He is there to represent the people of his district. It's unfortunate that there are so few like him, because most of them get elected to represent people but instead do the bidding of unelected CEOs via the army of corporate lobbyists.
You might wish to live in a world with no representative government, totally dominated by the will of the greediest and the most successful at hording the biggest share of resources for themselves, but what that will give you is a society not fit for human beings, but for corporate profits.
We've had thirty years of "trickle down" Reaganomics, so we know what that world will be like. Infrastructure - education, health care, transportation, justice systems, and the like - will start to fail. The middle class will gradually vanish. We'll be left with vast numbers of poor - probably 99% of the population - with the remaining population fabulously wealthy beyond the dreams of any Midas, but unable to leave their gated communities for fear of what waits them out there.
If you really don't wish to have representative government, why don't you travel for a bit, and see what places in the world are like without it? If you don't like paying your share of the cost of living in a first world country, why don't you go live in a third world country and come to grips with what you are asking the rest of us
But he goes home and does that to those same men, now at a company, and we defend his right to do it with every letter of the law.
How is that not schizo?
I don't want a job, I just want the check.
Last time I checked 'Hollywoodtypes,"(love the neo-con adjectives) often create production companies that employ hundreds if not thosands of people. I don't often read of "Hollywoodtypes" awarding themselves huge bonuses for failure while throwing their labor force on the scrap heap.
Would you say the samething about "sportstypes?"
Do they make too much money?
EngChina.
Do the "sports types" make to much money? Who decide what too much money is? Personally, I think they should make whatever the can.
The CEOs at the successful companies employ hundreds, thousands, and even tens of thousands nation and world wide. That eliminates one of your argument. In effect, you have argued against yourself.
Should the government set your wage (assuming you work in the private sector)? I say no. I say the government should get out of business.
Under Bush and Obama we have moved more towards communism. We bailed out Wall Street and we bailed out GM and we refuse to do anything about communist China.
Now if we let the banks fail and let GM fail that would have sent a very different message. And if we called communist China what it really is, a slave state, and ended all trade with them that would send a message. And if we ended the immunity that shareholders of corporations enjoy then that would send a message. And if we ended the use of our military as "world police" that would send a message. There are more changes I would like but that would a great start. I think it would get us back to basics, Back to respecting real work.
But I suspect we will continue down the road to corporate communism. Down the same road as communist China. That seems to be our future.
WE also need the League of Women voters to run the debates.
I think they are closer to PROVIDING welfare.
Rank-and-file workers who counted on those pensions for a comfortable retirement run through what little economic cushion they had faster and end up on welfare, food stamps and Medicaid/Medicare sooner without those pensions. Who pays then? Taxpayers. And the longer those people live, the greater the burden on taxpayers.
Why shouldn't employers be responsible for ensuring their workers don't end up on the dole? After all, employers are the ones who directly profited from the labor of these people, not taxpayers. And it's not as if these workers can get back 20 or 30 years of their working life and go build a pension/retirement cushion somewhere else.
Mr. Conyers, I see little hope for your bill, given how corporate interests are running this country but if it should pass, it is a step in the right direction for American workers.