(2 pm. – promoted by ek hornbeck)

Middle class suffers while billionaire dodges taxes and builds a spaceship that doesn’t fly with tax dollars

Graphic by Alex Karpati and Mark Szeltner Based on three separate surveys of 1,202 individuals in 2009, 2010, 2011

In August 2009, researchers from Rutgers began following a nationally representative sample of unemployed Americans who lost their jobs during the recession of 2008.   See the little stick figure guy standing on top?  He represents up to 700,000 Americans who have recovered from the recession according to data compiled over three years by the John Heldrich Center for Workforce Development at Rutgers, The State University of New Jersey.   The poor smucks at the bottom who are either “devastated” or “totally wrecked” represent up to 3,600,000 American workers. The survey explains in detailed demographics just who these little stick people are, and why they fit into their respective categories. While the bottom categories are aptly named, they might both be rolled into one category; “Totally Screwed.”

Let’s take a look at the “Totally Unscrewed.”

Source: Commerce Department’s Bureau of Economic Analysis

According to statistics from the U.S. Department of Commerce, corporations have not only “made it back” from the recession but have surpassed their level of profits prior to the downturn. Not only have profits increased, but also productivity has increased.  According to a report by The Atlantic, American productivity has increased by 6.5 percent since the start of the 2008 recession. One might think that with unemployment near 9% that total worker output would decrease as well. One might also ponder that since profits are up, the economy should recover at a quicker pace, but then one would be wrong. Something is screwy.

So, who is doing the screwing?

Corporations are catching most of the blame on the streets of occupied cities in America, as well as in the homes of American workers.

Some of the most horrifying accounts of worker abuse come from the warehouses of Amazon.com

A Chicago Tribune investigative report, Inside Amazon’s Warehouse, documents conditions that are reminiscent of Dickensian England.

“Workers said they were forced to endure brutal heat inside the sprawling warehouse and were pushed to work at a pace many could not sustain.  Employees were frequently reprimanded regarding their productivity and threatened with termination, workers said. The consequences of not meeting work expectations were regularly on display, as employees lost their jobs and got escorted out of the warehouse. Such sights encouraged some workers to conceal pain and push through injury lest they get fired as well, workers said.”

At least Amazon thoughtfully arranged for ambulances to be parked outside of the sweltering workplace in Lehigh Valley, Pennsylvania to haul those overcome by the heat to the hospital. Those too ill to return were replaced by new job applicants.  Federal regulators were alerted by an emergency room doctor who treated Amazon workers for heat related problems. The Occupational Safety and Health Administration (OSHA) received other complaints from Amazon workers.

“On July 25, a security guard at the Amazon warehouse called OSHA and said the temperature exceeded 110 degrees. The guard reported seeing two pregnant women taken to nurses and that Amazon would not open garage doors to help air circulation.”

According to the Tribune, the workers are hired by a temporary agency with promises of being promoted to permanent status. Temporary workers are preferred by Amazon to reduce cost by limiting benefits, worker’s compensation, and unemployment benefits. The report states that few are selected for permanent status.

As the success of a company is credited to its CEO, so must be any blame.  Jeff Bezos, Amazon CEO, is paid peanuts in salary and does not register on the CEO salary radar so often scanned by the 99%. According to The San Francisco Chronicle, Bezos is paid $81,440 per year and is not rewarded with any stock-based compensation. So, one might ask what motive does this CEO have for working his people so hard that he must station ambulances outside of the workplace.  

Bezos owns 41 percent of the company he founded in his garage and is a member of Forbes billionaire’s club with over $19 billion in net worth. Of that $19 billion, $81,400 is annual salary and is probably taxed as income at around 25%. If this is the case, he is taxed zero on his stock unless he sells it or receives a dividend, and then he must fork over 15% to Uncle Sam. Since Amazon.com does not pay dividends, Bezos either sells stock for income or relies on other ventures.

One such Bezos venture, Blue Origin LLC, is hardly a cash-cow. This company is developing a spaceship to replace the Space Shuttle, but since a test flight resulted in the craft crashing and burning, it is doubtful that Blue Origin is as successful as Amazon in its return on investment. The financial loss should not hurt Bezos since the American taxpayer pays for a large part of the funding for the project. According to the Wall Street Journal, “NASA in recent years has doled out hundreds of millions in seed money-including more than $25 million earmarked for Blue Origin-to promote development of various private rockets and spacecraft.”

Apparently, Bezos is not as shy about receiving tax money as he is about paying taxes. It is not just personal federal taxes Bezos appears to avoid. According to The Bay Citizen, a non-profit, non partisan news organization, Amazon has spent $3 million in California toward putting an initiative on the June 2012 ballot to overturn a new Internet sales tax law, which reportedly will bring $200 million a year to state. Amazon’s Internet sales tax position enraged many in California where “Billions of dollars in state budget cuts have already eliminated adult day care and in home support services for the elderly and disabled, and have forced both the University of California and California State University systems to raise tuition.”  

Community groups, Wal-Mart, and other big box retailers launched a boycott of Amazon following the world’s largest internet retailer’s attempt to force a repeal of the law. According to The Huffington Post,

“Over the past few years, a number of states have proposed or passed internet sales tax legislation, often termed by the media as ‘Amazon laws.’ The result has been that Amazon has either closed operations, severed affiliate relationships, or not built promised distribution centers, in those states, putting hundreds of people out of work.”

The good news is that those workers will not be collapsing from heat exhaustion in the bowels of an Amazon warehouse. The bad news is that they may now be categorized as “Devastated” or “Totally Wrecked” (a.k.a. Totally Screwed).

To be fair, Bezos should be admired for joining America’s tech savvy entrepreneurs like Bill Gates and Steve Jobs who have created amazing innovations in their garages. He should also be reminded that his garage and driveway were connected to a public street paid for by American citizens. That street is connected to public highways that ship his wares to his customers. Our tax paid armed forces and police should give him peace of mind that he is secure in whatever home $81,400 can buy, but evidently not. According to the San Francisco Chronicle, Amazon paid $1.6 million last year for his personal security detail. Could it be that he fears his own workers?

So, this Christmas, remember this. The sweat of a worker earning a pittance per hour in some Amazon hellhole may stain the Kindle you are considering.

Merry Christmas, Mr. Bezos.  Screw you!