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Archive for the ‘Recessions’ Category

This story was written by Katie Rose Quandt and originally published on BillMoyers.com.

Front-line workers at our nation’s big banks — tellers, loan interviewers and customer service representatives — are required by their employers to exploit customers, according to a revealing report out today from the Center for Popular Democracy (CPD). Big banks have internal systems of penalties and rewards that entice employees to push subprime loans and credit cards on customers who would be better off without them.

CPD’s report outlines several illegal predatory practices big banks have been caught employing, usually via their front-line workers:

Blatantly discriminatory lending:
In 2011 and 2012, Bank of America and Wells Fargo paid out settlements for charging higher rates and fees to tens of thousands of African American and Hispanic borrowers than to similarly qualified white customers. Minority customers were also more likely to be steered into (more expensive, riskier) subprime mortgages.
Manipulating payment processing to maximize overdraft charges:
When a savings account balance drops too low, the bank charges a hefty overdraft fee on each subsequent purchase. Both Bank of America and US Bank paid settlements for intentionally processing customers’ largest debit card payments first, regardless of chronological order, in order to hit $0 faster and maximize overdraft fees. US Bank was also accused of allowing debit card purchases on zero-balance accounts to go through (and incur overdraft fees), instead of denying the charges upfront.
Forcing sale of unneeded products:
Wells Fargo, JP Morgan Chase and Citigroup were accused of forcing customers to purchase overpriced property insurance.
Manipulative sales quotas:
Lawsuits show Wells Fargo and Bank of America created incentive programs for employees with the interests of the company — not the customer — in mind. Wells Fargo’s sales quotas encouraged bank workers to steer prime-eligible customers to subprime loans, while falsifying other clients’ income information without their knowledge. Bank of America’s “Hustle” program rewarded quantity over quality, encouraging workers to skip processes and checks intended to protect the borrower.

Instead of cutting back on the risky, unethical practices that led to the Great Recession, the CPD report asserts that big banks have not learned from their mistakes. Bank workers report higher levels of sales pressure in 2013 than in 2008, and most do not have the job security or seniority to simply refuse to hawk credit cards or steer customers into risky financial situations. While the financial sector is turning near-record profits, the average bank teller made just $12.25 an hour in 2013 (a real-dollar decrease from 2007), causing 31 percent of tellers’ families to rely on public assistance. What’s more, 85 percent of these underpaid front-line bank employees are women, and one-third are people of color. Most are in no position to risk losing their job or having their pay docked for stepping out of line.

Several anonymous big bank employees went into detail about how their employers incentivize sales:

An HSBC employee reported that when workers fell short of sales goals, the difference was taken out of their paychecks.
A teller at a major bank said she is expected to sell three new checking, savings, or debit card accounts every day. If she falls short, she gets written up.
Customer service representatives at one major bank’s call-center said everyone is expected to make at least 40 percent of the sales of the top seller. Credit card sales count for extra, encouraging callers to push credit cards on customers who would be better served with checking or savings accounts.
A call-center worker said she offers a credit card to every customer, regardless of whether it would be beneficial. She explained: “If you aren’t offering, you can get marked down — the managers and Quality Analysts listen to your call, and can tell if you aren’t offering.”

“We’re not servicing their needs,” said one front-line worker. “What they want, what they need, isn’t important to us. Selling them a product is … Some of our customers just have their savings, many are just retirees.”

As the report concludes, “Our nation’s big banks are committed to a model that jeopardizes our communities and prevents bank employees from having a voice in their workplace.”

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Elizabeth Warren says to Republicans, “It’s time to put up or shut up. I have a message for my Republican colleagues, stop talking about helping the middle class, and start doing it.” Then she lists a number of things the Republicans that control congress can do to help the middle class, none of which the Republicans intend to do. Basically, she’s accurately saying the Republicans are lying about their desire to help the middle class, which is totally true.

Of course, plenty of Democrats secretly and not so secretly side with the Republicans on these issues, most notable among them is Wall Street Senator Ron Wyden, who is pushing the largest income redistribution scam in history from the 99 to the 1 percent. It’s called the Trans Pacific Partnership, and Wyden is one of the strongest supporters of the 1 percent in their war against the middle class.

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“A network of Republican lawmakers and their rightwing corporate funders are battling behind closed doors to block minimum wage increases in cities across the US, in a step-by-step counter-attack that could cut back the incomes of millions of Americans despite an economic upswing.

According to strategic details obtained by the Guardian, the American Legislative Exchange Council (ALEC) – along with its localized sister organization, ACCE – is trying to prevent elected city representatives from raising the minimum wage to levels above those set by their states. The group has launched an aggressive dual-track mission that combines legislation and litigation in what Alec calls a “new battleground” over worker compensation.”

Why would rich people want to stop poor people from earning more money? The answer is simple.

The financial markets are Ponzi schemes. More and more money has to be pumped into the financial markets, or the values of corporate shares that are traded on those markets will crumble into nothingness. For example, if shares of Weyerhauser climb to $50 per share, yet profits go down, more sellers will enter the market than buyers, and the value of the shares go down. However, the process is also true if profits stay the same from one quarter to the next. In which case, there might be exactly as many buyers as sellers of Weyerhauser shares if other stock prices are rising.

Why hold a static stock when when you can sell and purchase shares that are on the rise? The result of static corporate profits (and profits are the key to whether or not share prices rise), is to send share prices down. Weyerhauser’s stock plummeted from $50 to $1 per share from 1929 to 1933, which is when the Ponzi Scheme known as Wall Street collapsed. I demonstrated this in greater detail in The Rigged Game: Corporate America and a People Betrayed.

This is why ALEC opposes increasing the minimum wage anywhere except for shareholders, CEOs and corporate lobbyists. If corporations need to pay workers higher wages, that will reduce profits and potentially send share prices lower. This is also why the 1 percent wage war against the middle class, corrupt government at all levels with their ill-gotten gains, and have their legislators push legislation to redistribute income from the 99 to the 1 percent. This is also why we have much greater inflation today than the government lets us know about, but that’s another story.

Check out the rest of the story from the Guardian by clicking on the link below.

How a powerful rightwing lobby is plotting to stop minimum wage hikes–the Guardian

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From USA Today

“Business executives and politicians endlessly complain that there is a “shortage” of qualified Americans and that the U.S. must admit more high-skilled guest workers to fill jobs in STEM fields: science, technology, engineering and math. This claim is echoed by everyone from President Obama and Rupert Murdoch to Mark Zuckerberg and Bill Gates.

Yet within the past month, two odd things occurred: the US Census Bureau reported that only one in four STEM degree holders is in a STEM job, and Microsoft announced plans to downsize its workforce by 18,000 jobs. Even so, the United States House of Representatives is considering legislation that, like the Senate immigration bill before it, would increase to unprecedented levels the supply of high-skill guest workers and automatic green cards to foreign STEM students.

As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages.”

In other words, the shortage of US high tech workers is a big lie perpetrated by business leaders, President Obama, Republican Party lawmakers, and many Democratic lawmakers. Keeping wages, salaries and benefit packages low by importing the foreign high tech workers into a market in which only one of four highly qualified US citizens can find a job is nothing short of criminal, but it keeps labor costs down and corporate profits and share prices up. The labor market, in other words, is being manipulated to the benefit of the 1 percent.

Apparently, that’s what the US government is supposed to do. That’s the job of politicians: keep wages, salaries and benefits low by keeping an excess supply of labor flowing into the US job market. Who are these politicians working for? The Koch Brothers and Bill Gates or us? Okay, they work for the rich guys, and to hell with us.

Why would they do this?

According to USA Today, “It is well documented that loopholes enable firms to legally pay H-1Bs below their market value and to continue the widespread age discrimination acknowledged by many in the tech industry.”

That’s why companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine how many more Americans would be frozen out of the middle class if politicians and tech moguls succeed in doubling or tripling the flow of guest workers into STEM occupations.

Click the link below for more on this story from USA Today.

Bill Gates Tech Workers Fantasy–USA Today

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Here are some heartening numbers:

From the Great Depression until 1980, during every recession employers shed jobs, but the economy quickly regained the lost jobs and then added more, and with rising real wages for the bottom 99 percent. Here’s what’s happened since then.

* Real GNP has grown 83 percent over the last thirty-four years, and the top ten percent of income earners have garnered all of the income growth during that time.

* In the last twenty-five years, corporate profits have increased 100 percent in real terms, which means if you factor inflation into the equation.

* 81 percent of US counties have a lower median income than fifteen years ago.

* US workers today produce nearly twice as many goods and services as they did in 1989, but they get paid about the same amount as they did in 1989, when inflation is factored in. In other words, their spending power hasn’t grown in 26 years, although their productivity has doubled.

* The average private sector worker earned less in November 2014 than they did in April 2009, almost six years ago. The average private sector worker earned $10.33 an hour in November 2014, in 1984 inflation adjusted dollars.

Shared prosperity changed with the Reagan Revolution, in which corporate leaders, the US Supreme Court, politicians of both political parties, and Wall Street investment banks attacked the middle class with an eye toward redistributing middle class incomes to themselves and their benefactors.

Organized labor was publicly excoriated, and eviscerated in large measure by shipping jobs overseas via trade treaties, and redistributing the difference between the old higher wages and the new lower wages into the pockets of the rich via higher corporate profits, rising share prices and surging dividends. And, oh yes, we can’t forget those bogus tax cuts for the rich, the rationale of which was grounded in the failed 1920s policy of trickle down economics.

Trickle down gave the rich more money to rig the political and economic war against the middle class through the purchase of political advertisements, pundit opinion shaping, rigged economic studies, and politicians that need to grovel for cash from their affluent masters.

We can get back to shared prosperity, and return to a democracy of all the people, rather than the current system in which well-heeled movers and shakers make all the decisions.

Get out of the house, and get politically active. The time is coming when an unprecedented economic tsunami is headed our way. That’s when we working folks can turn the tide, so get organized now.

And if you’re already active, fight against the Trans Pacific Partnership (TPP), the largest income redistribution scheme in the history of the United States.

Many of the TPP’s provisions will be unconstitutional, but the corporate press, corporate spokespeople and politicians will dutifully not note this, and will certainly tell you otherwise.

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Monsanto corporation is the largest supplier of genetically modified organisms (GMOs) in the United States, and the world. GMOs are a noted poison. Controlling the food supply means controlling supply and demand, which means controlling the prices we pay for food. Rest assured, the folks at the Monsanto corporation will continue to push food prices upward.

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