by Tula Connell, Aug 7, 2008

Great economic news out this week—if you’re an excessively paid CEO. Seems some corporations are “quietly converting their pension plans into resources to finance their executives’ retirement benefits and pay.” This from The Wall Street Journal (subscription required):

In recent years, companies from Intel Corp. to CenturyTel Inc. collectively have moved hundreds of millions of dollars of obligations for executive benefits into rank-and-file pension plans. This lets companies capture tax breaks intended for pensions of regular workers and use them to pay for executives’ supplemental benefits and compensation.

(The AFL-CIO Executive Council had something to say about this odious practice. Get the statement here.)

For the rest of us who work for a living, the news isn’t so comforting.

Days after the nation’s unemployment rate worsened to 5.7 percent, the worst level since after the Sept. 11 attacks, the Labor Department reported today that new applications filed for unemployment insurance rose to 455,000 for the week ending Aug. 2. That’s the worst level of claims since late March 2002. 

Employers cut jobs every month so far this year, cutting 463,000 jobs. 

There’s more to this job loss than the current mix of mortgage crisis and high oil and food costs. In an assessment of the 2000 employment cycle, the Economic Policy Institute (EPI) noted several disturbing long-term trends regarding U.S. job growth. 

• It took longer to regain pre-recession employment levels: Nearly four years passed before the number of jobs in the economy returned to the level reached prior to the recession of 2001. By comparison, after the recession of the early 1990s, it took just over two-and-a-half years to regain peak level employment.
• Employment growth remained sluggish: Over the entire business cycle of the 2000s, job growth averaged only 0.6 percent per year—well below what was needed to keep up with labor force growth. By comparison, over the business cycle of the 1990s, annual job growth averaged 1.8 percent.

The picture isn’t much brighter for those who do remain employed. Robert Reich succinctly sums up the big picture problem:

The heart of the matter isn’t the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess, but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon, but it has finally caught up with the pocketbooks of average people.  

[snip] The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They’ve gone largely to the top. 

And the top includes Big Oil. Last week, Exxon Mobil reported a record-breaking $11.68 billion profit—with a pile of that cash going directly to Sen. John McCain’s campaign.

See, while McCain now is finally figuring out that the economy is the issue that most concerns working Americans, the reality behind his rhetoric is that his heart and pocketbook are with the CEOs at top, squirreling away pensions at the expense of workers.

In fact, two high-ranking McCain campaign officials, one of whom is also one of McCain’s more prolific bundlers, were both were paid lobbyists for Hess Oil for roughly three years, according to disclosure forms. According to TPM: 

The two lobbyists are Wayne Berman, McCain’s national finance co-chairman, and John Green, who’s been the McCain campaign’s chief Congressional liaison since March. Both men worked for a firm called Ogilvy Government Relations. The firm has been paid $800,000 by Hess from 2005 up to the present, including $720,000 during the period that both of the two lobbied for the company, the forms say. 

Sen. Barack Obama has a clear record in support of working family jobs and wages. Unlike McCain who opposed raises in the federal minimum wage, Obama consistently supported boosting it. Obama supports project labor agreements. And while McCain would continue Bush’s tax breaks for the wealthy, working families would get a bigger tax cut under an Obama presidency.

There’s a lot of bad economic news. But this November, we can do something to turn around the economic disaster built up under the Bush administration.

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Paid for by the AFL-CIO Committee on Political Education Political Contributions Committee, www.aflcio.org, and not authorized by any candidate or candidate’s committee.

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