Good business folks used to nurture ventures for the long haul, paying decent wages for secure jobs, offering products and services customers valued, and paying taxes that sustained communities. Their companies were built to last. Too often, today’s corporate kingpins are instead focused on short-term gains – to the detriment of workers, customers and communities. Such companies are “built to loot,” as Chuck Collins of the Institute for Policy Studies says.
Verizon is an example of such looting, according to two unions in Year 2 of bargaining with the company.
The nation’s second-largest telecom company, Verizon has management demanding givebacks from workers while reporting healthy profits and lavishing big pay packages on CEOs
The company wants $1 billion in concessions on wages, pensions and other benefits from employees (costing affected workers thousands of dollars each), and they’re planning another $1-billion boost in income from new requirements that consumers pay to upgrade phones.
Workers and customers aren’t the only ones affected. Taxpayers are exploited, too.
Collins and colleague Scott Klinger write, “Between 2008 and 2011, Verizon reported $19.8 billion in U.S. profits and yet claimed an IRS refund on its federal taxes of $758 million. This amounts to an effective tax rate of negative 3.8 percent.”
The $100 billion corporation also reveals its priorities. It’s off-shored jobs by the thousands, but pays CEO Lowell McAdam so much money that he makes more in one day than a Verizon technician earns in a year. McAdam’s predecessor, long-time CEO Ivan Seidenberg, retired last August, and the company paid him $26 million for just eight months of service that year, a 45-percent increase over a year of work in 2010. Seidenberg was the highest paid telecom CEO in 2011. McAdam was the second-highest paid that year, getting $23 million.
The Communications Workers of America (CWA) says, “The company has made billions in profits. They gave their CEO a 200-percent raise. The feds and state governments gave them massive tax breaks. For Verizon’s top brass, no amount of profit, no bonus, no salary will ever be enough,” CWA continued. “And while they squeeze customers to line their own pockets, they downsize their workforce, outsource to cheap – often overseas – labor, and slash employees’ health care and retirement plans to fill their pockets even further.”
The CWA and the International Brotherhood of Electrical Workers (IBEW) have struggled with the telecom behemoth for more than a year over a new contract for its 45,000 unionized workers. Verizon refuses to budge from its demands for takeaways. A two-week strike last August pushed Verizon back to bargaining table after the company walked out, but there’s been little movement since.
Verizon – which provides local phone service to a quarter of the nation and wireless service to about 100 million Americans – last year reported sales of more than $106 billion and ranked #16 on the Fortune 500 list.
In May more than, 1,000 demonstrators assembled in Alabama, where Verizon held its annual meeting. The rally was one of dozens in California, Florida, Nebraska, New Hampshire, New York, Virginia and Washington state. Last month, thousands of supporters took part in a National Day of Action and members of Verizon’s board of directors faced protests from coast to coast as union members urged the executives to take responsibility. This month, workers are expected to leaflet at Verizon Wireless stores.
Collins added, “This fight has been about economic justice from the beginning. Some 45,000 CWA and IBEW members spent two weeks on the picket line to force this $100 billion company to bargain fairly, not continue to demand givebacks of $1 billion a year.”
Another perspective on Verizon priorities: Corporate execs reportedly get half their hefty bonuses for simply performing better than one-third of the company’s competitors, says the Institute for Policy Studies.
C. William Jones, a former managing director of corporate planning at NYNEX (which became Verizon), commented, “In school, that would be a D or an F. You certainly wouldn’t get a pat on the head for it. That’s like Joe Girardi and Bobby Valentine receiving bonuses if the Yankees and Red Sox finish below second place and don’t make the playoffs.”
Bill Knight is a freelance writer. The opinions expressed are not necessarily those of Western Illinois University or Tri States Public Radio.