COVID-19: We need a Peoples’ Bailout, Not a Corporate Bailout
By Erica Smiley, Executive Director, Jobs With Justice | Twitter: @SmileyJWJ
In many ways, the coronavirus marks a unique and unprecedented crisis in United States history. And at the same time, to address the economic fallout, our government is poised to use the very same bailout strategies for giant corporations that it employed in the last major financial crisis. But in 2008, when somewhere between $634 billion to $16 trillion in taxpayer dollars were handed to Wall Street banks and auto companies, taxpayers didn’t get anything concrete in return. This bailout must be different. In exchange for our investment, taxpayers — particularly those most impacted by the current crisis such as the medical providers, the families of those who died, the workers without sick leave who were sent home with no pay — should become active owners of the companies that receive our money through a set of representatives accountable only to us. Our collective contribution to such companies should come with a seat on the board and other decision-making bodies of the industry where standards are set.
Let’s be clear — these corporations exist in the first place because of our money and our labor. Since 1979, worker productivity has consistently risen while average worker wages have not. Where did that money go — the product of all our productivity, rewarded proportionately less and less in our paychecks? It went to corporate profits, which have also soared. Indeed, most of the gains from the economic recovery that followed the last bailout went, disproportionately, to the economic elite. Adjusting for inflation, incomes of the richest 1 percent rose between 2009 and 2012/2013 — while incomes for the remaining 99 percent of Americans actually fell during that period. Bear in mind that 60 profitable Fortune 500 companies paid $0 in taxes in 2018. The list includes mega-corporations like Amazon, Delta Airlines, Duke Energy, General Motors, Eli Lilly, and Prudential Financial. That means that in addition to our work lining their pockets, we’re also covering their tab during tax season. And then some companies, such as General Motors in 2008, have the audacity to “triple dip” into our wallets after they mess up by asking for “economic stimulus” — aka bailouts from taxpayers. So don’t you think we should get something in return?
The idea of public representatives and workers having seats on corporate boards isn’t particularly new or radical. Laws in Germany, for instance, require companies to include worker-elected representatives on supervisory boards, and in some cases workers elect half of corporate governance bodies. Similar laws for worker co-determination of corporate governance are in place, to some extent, in countries including France, Spain, Denmark, Slovenia and Sweden. Senator Tammy Baldwin (D-WI) has introduced legislation to require workers elect one-third of boards at publicly traded companies, and Elizabeth Warren made “worker co-determination” a centerpiece of her presidential campaign’s economic agenda. And the increasingly popular notion of a “triple bottom line” for business argues for balancing profit interests with the interests of people and the planet, an idea many have argued points to board governance roles for workers as well as community and environmental representatives.
Of course, we expect state-owned corporations to have community representatives on their boards. Shouldn’t companies that taxpayers bailout — which, honestly, if we’re looking at the math we could argue we, the public, now own — at the very least include public representatives in their governance? At the height of the 2008 bail-out of the auto industry, taxpayers had a 60.8% ownership stake in GM. And what did we get for it? The Obama Administration was able to enforce some new efficiency standards and the government backed GM warranties for consumers. Then they government sold their shares back to GM (and others) with little to no accountability, emboldening GM to threaten cuts to employee healthcare in 2019 negotiations with the United Auto Workers. We gave them our money. We should have gotten some long-term accountability and real decision-making power in return.
Shouldn’t companies that taxpayers bailout — which, honestly, if we’re looking at the math we could argue we, the public, now own — at the very least include public representatives in their governance?
During major disasters, while most of us are so urgently focused on meeting our basic needs, the architects of global capitalism see these events as opportunities to re-organize the economy in their favor. Hard to believe? Note the congressional testimony of Department of Health and Human Services Secretary, Alex Azar — a former executive of Eli Lily Pharmaceuticals — in response to an influx of funding for the coronavirus. He testified that, yes, increased tax dollars would go to private pharmaceutical companies to develop a vaccine but, no, he could not guarantee that the vaccine would be affordable for most people. Is this the path we’re going to keep traveling — giving public resources to already-wealthy private corporations without any clear public benefit, let alone real influence over the company’s potentially problematic operations?
Coronavirus is a public health crisis preying on and exacerbated by a crisis of economic inequality. We know that the people hit hardest by this pandemic and its economic aftermath are those among us who are underpaid underinsured. While we should be pulling our collective resources to help bailout the restaurant workers and hotel housekeepers and others who are losing their jobs and their livelihood, if we’re going to give public money to bailout mega-corporations in this crisis, we should get something for our money — a seat at the table, and a role in corporate governance to change the way our nation does business going forward. That’s not too much to ask for. I mean, we did pay more than our fair share.
