Campaign News

FOR IMMEDIATE RELEASE: December 3, 2013

Contact: Tony Perlstein, Center for Popular Democracy (917) 647-7751, TPerlstein@populardemocracy.org

REPORT:  NYC GOVERNMENT CAN RAISE $1B ANNUALLY FOR BUDGET AND CREATE $1 BILLION IN MAIN STREET STIMULUS BY USING $350B WALL STREET MARKET POWER

New York does enough business with Wall Street to renegotiate bad deals

On the heels of a mayoral victory won on the issue of inequality, a new report released today by the Center for Popular Democracy shows that New York City could generate an additional billion dollars annually for the city budget and generate a billion dollars in economic stimulus by effectively using its $350 billion per year in financial market power.  The report, “One New York for All of Us: Leveraging New York’s Financial Power to Combat Inequity” shows the city could save as much as $1 billion annually and stimulate the economy by about $1 billion more.

The city’s financial market power comes from the $200.4 billion that the city’s pension funds have invested in Wall Street institutions combined with an additional $150 billion in debt issuance and payments made and received.

“New York City is uniquely positioned to lead the way in holding Wall Street to an appropriate high standard,” said Connie Razza, lead author of the report and Director of Strategic Research Initiatives at the Center for Popular Democracy.  “We spend a ton of money with them, and we should use that clout.  The city and its related authorities have powerful financial leverage and economic power to demand short, medium and long-term changes from Wall Street that will save money for taxpayers, bring in more revenue for essential city services, and move new investments and new jobs into our neighborhoods and small businesses.”

The report kicks off a week of action to draw attention to the ways Wall Street and big corporations continue to siphon resources away from average New Yorkers and point toward solutions that would help reduce inequality and build economic fairness.

“In 2013, New Yorkers voted for a Mayor committed to addressing the vast inequality in our city, and for a strong plurality of progressive City Council members committed to broader prosperity,” said Michael Kink, Executive Director of the Strong Economy for All Coalition. “In 2014, we’ll start to build a New York that works for all of us. This report maps the way – and tells us to begin by changing the way the city does business with Wall Street.”

“This is our moment,” said Camille Rivera, Executive Director of United NY.  “We have the opportunity to make real change in the city and the state, but only if our elected officials know we have their back.”

“One New York for All of Us” highlights concrete solutions to address the imbalance in the city’s relationship with Wall Street. The report details how reforming the city’s relationship with banks could save a minimum of $725 million each year for the city budget, withhold another $300 million in current bank subsidies banks until job-creation commitments are fulfilled, and stimulate the local economy by another $1 billion per year, creating nearly 17,000 jobs.

Key recommendations:

Renegotiate toxic financial deals to save up to $725 million each year. -Use the city’s economic and financial leverage to lower fees and interest rates for new and existing financial services; -Investigate unethical behavior by Wall Street and prosecute fraud to the fullest extent of the law to recover losses; -If Wall Street won’t negotiate in good faith, bring the functions into the city by creating an in-house financial management team and/or a publicly owned city bank.   Save money and create jobs by holding banks to firm commitments to the community in return for $300 million each year in city subsidies for banks.   Write down underwater mortgages to keep 86,000 families in their homes and stimulate the local economy by as much as $1 billion, creating nearly 17,000 jobs.

Key factual findings:

The city and associated entities pay $160 million a year for bad deals with banks. The city, its pension funds, and the MTA pay $563 million in base Wall Street fees each year. New York City and State give banks subsidies worth about $300 million a year, without ensuring that New York City communities will benefit. Because their wages are so low, 39% of bank tellers and their family members rely on at least one public assistance program, at a total government cost of $112 million. During the past 5 years, foreclosures have cost New York City $1.9 billion in expenses and lost revenue.

“Due to the bank-induced mortgage craze and crisis, 20% of New York homeowners owe more on their homes than the homes are worth,” explains New York Communities for Change Executive Director Jonathan Westin. “By adjusting bank-inflated mortgages down to fair market value, we could stimulate the local economy by as much as $1 billion and create 17,000 new jobs. It’s good for homeowners, good for communities, good for the city, and even good for banks – whose risk of defaults would drop dramatically.”

“This report highlights the power that our city has to take a stand to improve income inequality. The Great Recession has not eased for most New Yorkers. We have lost good jobs, and the remaining jobs have actually deteriorated. In banking itself, this is shockingly true,” said Deborah Axt, Make the Road New York’s Co-Executive Director. “Frontline bank workers report less pay, inadequate healthcare, and more work with less staff. A full 32% of surveyed bank workers even report working overtime without pay. It is a tragic moment in New York City history when we learn that the wealthiest and most powerful corporations in our nation, perhaps the world, seem to be committing wage theft.”

ABOUT NEW DAY NEW YORK COALITION

The New Day New York Coalition is a new coalition made up of community groups, faith organizations, labor unions, and veterans of Occupy Wall Street working for years on issues of economic fairness – united to organize a week of actions demonstrating that the vision and policy principles New Yorkers voted for in the past election have popular support and practical pathways forward.

The coalition includes Center for Popular Democracy; United NY; Strong Economy for All Coalition; ALIGN NY; New York Communities for Change; Make the Road NY; Alliance for Quality Education; Coalition for Educational Justice; Walmart Free New York; Coalition for the Homeless; Food and Water Watch; NY Citizen Action; Met Council on Housing; Community Voices Heard; United Federation of Teachers; Professional Staff Congress; Retail, Wholesale and Department Store Union (UFCW); Communication Workers of America Transport Workers Union Local 100; New York State Nurses Association; Service Employees International Union 1199 – United Healthcare Workers East; Service Employees International Union 32BJ; Alternative Banking; Not An Alternative; Beautiful Trouble; 99 Pickets; MoveOn NY; and others.

CBS MoneyWatch - September 26, 2014, by Alain Sherter - Liberte Locke, a 32-year-old "barista" at a Starbucks (SBUX) in New York City, is fed up.

"Starbucks' attitude is that there's always someone else can who can do the job," she said in running through her complaints about life at the java giant.

If that isn't necessarily the consensus among Starbucks workers, interviews with nine current and former baristas at the company make clear it's not an isolated opinion, either. Even those who say they like their job paint a picture of a business that underpays front-line workers, enforces work rules arbitrarily and too often fails to strike a balance between corporate goals and employee needs.

Of course, such complaints are nothing new in retail, where low pay and erratic schedules are the norm. But by its own account, Starbucks is no ordinary company and is ostensibly a far cry from the fast-food outlets now facing a nationwide uprising by employees tired of working for peanuts.

That's evident in the company's recruitment pitch. Starbucks invites job-seekers to "become a part of something bigger and inspire positive change in the world," describing it as a chance to discover a "deep sense of purpose."

Damage control

That image suffered a serious blow last month after The New York Times vividly chronicled a Starbucks worker struggling with the company's scheduling practices. The story, which centered on a 22-year-old barista and single mother, amounted to a public relations nightmare for Starbucks. Perhaps not coincidentally, within days of the story's publication top executives were promising reform.

In a memo to employees earlier this month, for instance, Chief Operating Officer Troy Alstead vowed to "transform the U.S. partner experience," referring to Starbucks' more than 130,000 baristas. Inviting worker feedback, he said Starbucks will examine its approach to employee pay, revisit its dress code, make it easier for people to ask for time off, and consider other changes aimed at helping baristas balance work and their personal lives.

Among other changes, the company said it would end the practice of "clopening," when an employee responsible for closing a store late at night is also assigned to open it early in the morning.

"We recognize that we can do more for our partners who wear the apron every day," he wrote.

Some baristas did not feel this August memo from Starbucks went far enough in proposing ways to improve work conditions, so they marked it up with their own ideas.

Although Starbucks workers welcome this pledge to respect the apron, they fear the company is more intent on dousing the PR flames than on genuinely improving employees' experience. After the retailer last month sent an email to workers outlining possible solutions to the kind of scheduling problems and related issues detailed by the Times, a group of baristas gave the proposal a C- and posted online a marked-up version of the memo listing their own demands (image above).

"We hope you're ready for a commitment to give us schedules that don't mess with taking care of kids, going to school or holding onto that second job we need because Sbux wages don't make ends meet," wrote the baristas, who are working with a union-backed labor group, the Center for Popular Democracy.

Retail jungle

Despite the recent media focus on Starbucks, the company's labor practices are generally no worse than those of many large retailers. In some ways they're better, with the company offering health care to part-time, as well as full-time, workers; unusually generous 401(k) matching contributions; annual stock grants to employees; and tuition reimbursement.

Starbucks highlights such benefits as an example of its commitment to employees. "Sharing success with one another has been core to the company's heritage for more than 40 years," Alstead said in the September memo.

Meanwhile, some baristas say they enjoy their work and feel valued by Starbucks. "It's a decent place to work, and my manager and co-workers are great," said one employee who asked not to be identified.

But other current and former workers claim Starbucks has changed in recent years, saying that corporate leaders' intense focus on slashing costs has short-circuited its professed commitment to workers. Mostly, they say Starbucks doesn't listen to employees and even punishes those who identify problems.

"The biggest problem is that baristas don't have a voice," said Sarah Madden, a former Starbucks barista who left the company this spring after two years with the coffee vendor. "They can't speak to issues that they know exist. Workers know how to fix them, but when [they] speak up there are serious repercussions -- your hours get cut, you're transferred to another store or isolated from other people."

Employees interviewed for this article said one result of Starbucks' cost-containment push is that stores are frequently understaffed, hurting customer service and forcing managers to scramble to find staff. That problem is common across the big-box stores that dominate the retail sector, experts said.

"One the one hand, retailers overhire, but they're also understaffed, so everybody's running around and then there aren't enough people on the floor," said Susan Lambert, a professor at the University of Chicago and an expert in work-life issues. "Companies are effectively loading all the risk onto workers so that they're not the ones incurring the risks inherent in business."

Starbucks denies that its stores are short-staffed. "We're proud of the level of service we provide in our stores," said Zack Hutson, a spokesman for the company. "We know that the connection our partners have with customers is the foundation of the Starbucks experience. It wouldn't be in our best interest. We want our customers to have the appropriate service level when they come to our stores."

To be sure, Starbucks is hardly the only U.S. corporate giant to keep a gimlet eye on its bottom line -- among Fortune 500 companies that approach to management is the rule, not the exception, and CEOs across the land defend it as an inviolable fiduciary duty to shareholders.

But baristas say Starbucks' focus on profits and cost-cutting has increasingly led its leadership to tune workers out. Locke, who has worked for the company since 2006 and who earns roughly $16,000 a year, said she yearned for the Starbucks of old.

"When I started they had a training program and taught you how to be a coffee expert. There was more of a culture of supporting each other as co-workers. Store managers were sympathetic. I really enjoyed it."

Asked why she stays at Starbucks, Locke said her employment options are limited because she lacks a college education and because her only professional experience is in retail.

Living wage?

According to workers, the best thing Starbucks can do for its apron-wearers is to raise their pay and offer full-time hours instead of the 20 to 30 hours that most employees work.

Samantha Cole, a barista in Omaha, Neb., said she struggles to get by on her supervisor's salary of $11.25 an hour. Such pay may be better than what she would earn working for other retailers, but the 30-year-old mother of two say it's still not a living wage.

"I'm definitely not making enough money," said Cole, who has been with the company for six years. "A lot of us are right there with what fast-food workers are making."

Such frustrations are also evident in comments on the Facebook page Starbucks uses to communicate with employees and where it is asking baristas for input regarding the company's labor practices. Wrote one employee: "I've worked for the company for 7 years in January, and I don't make enough to support myself on one job so I work 2 jobs, 6 days a week.... I've seen a lot of amazing partners leave because they don't make enough."

Starbucks declined to disclose compensation data, citing competitive reasons and saying that pay varies widely according to workers' experience and where in the U.S. stores are located. It didn't respond to emails requesting clarification regarding other aspects of its labor policies.

It's worth noting that low pay isn't unique to Starbucks -- in retail it is the norm. As of 2012 (the latest year for which data is available), the median hourly income for retail salespeople is $10.29 per hour, or $21,410 a year, according to the Bureau of Labor Statistics. Hourly pay for full-time retail workers range from a high of $14.42 to $9.61 for lower-paid people, according to Demos, a liberal-leaning think tank in New York. Part-timers typically make much less, with the average cashier earning $18,500 a year.

"Until [Starbucks] gives a living wage to every employee, they can't claim to be a good employer," Locke said, who added that it has been roughly two years since her last pay raise.

"Race to the bottom"

Another priority for baristas: stable, regular schedules. Like most large retailers, Starbucks uses scheduling software to try to match the number of workers it has in a store at any given time to the amount of business it gets. Workers also may be scheduled according to the sales they generate or their facility in promoting certain products. The technology also can enable other savings, such as limiting overtime.

For employees, however, that approach -- known as "just-in-time" or "on-call" scheduling -- often results in lower income and chaotic hours.

Stephanie Luce, a professor of labor studies at City University of New York's Murphy Institute, characterizes the widespread adoption of scheduling and so-called workforce optimization technologies as a "new race to the bottom."

"Companies that have already reduced operating costs by making deals with irresponsible subcontractors and using the cheapest available materials are now cutting corners in the form of the 'just-in- time scheduling' of their workforce," she and her co-authors wrote in a recent report. "These 'lean' manufacturing practices take advantage of sophisticated software and an increasingly desperate workforce to cut labor costs to the bone."

By the same token, tighter control of worker schedules helps Starbucks contain payroll costs. But it also means employees who had expected to work a certain number of hours every week can see their schedules dramatically cut back and fluctuate wildly. The result? Smaller paychecks and a disturbance to family life.

"It makes it very hard for parents to participate in an intimate family routine and structure it in such a way that experts agree is good for children," Lambert said.

Irregular schedules also make it hard for workers who do need extra income to work a second job, schedule appointments and plan other aspects of their lives.

Baristas said Starbucks posts their schedule only days in advance and that they are often subject to change. Following the Times story, Starbucks said it would post schedules at least one week in advance. That's not enough time, several workers said, asking the company to provide at least two or three weeks notice, as retailers ranging from Walmart (WMT) and H&M to Victoria's Secret (LB) do.

Meanwhile, despite Starbucks' promise to end clopening, the practice continues, some workers said, although the company insists that this is only in cases when people request such shifts.

"Partners should never be required to work opening and closing shifts. That policy is clear," Starbucks' Hutson said, adding that the company is studying ways to give workers more input in their schedules. "If there are cases where that's not happening, we want to know about that."

Given the scrutiny on Starbucks, the company can count on baristas to do just that.

Source

Grant to Ohio raises questions over the federal Charter School Program’s grant making process

CPD report on fraud, waste and abuse in charter schools

Following an announcement that the U.S. Dept. of Education will give $157 million in taxpayer funds to charter schools, Kyle Serrette, director of education at the Center for Popular Democracy, released the following statement:

“As our 2015 national report on the charter school fraud demonstrates, there are regulatory shortcomings that foster fraud, waste and abuse in charter schools. It is alarming that Ohio is the largest grantee. One would think that the sheer volume of fraud, waste, and mismanagement that has been documented in the state would have disqualified them from receiving this federal windfall.  Our research has documented over $15 million in fraud, waste, or mismanagement, which means that thousands of children are being robbed of a quality education. Giving the Ohio charter schools $71 million makes no sense. 

Some cases of Ohio fraud, waste, and mismanagement include:

Auditor Investigation: In January 2015, the state auditor released a report of the results of unannounced visits by inspectors to 30 charter schools. In nearly half of the schools, the school-provided headcount was significantly higher than the auditors’ headcount.

Greater Achievement Community Charter School: An Ohio state audit found that administrators at the Greater Achievement Community Charter School egregiously mismanaged public funds, sometimes using money for personal expenses. Between 2003 and 2010, the auditors found that Greater Achievement developer Elijah Scott diverted over $46,000 of public funds into his personal account. The school’s financial records could not adequately account for excessive cash withdrawals from ATMs and other sources and the school overall was found to have misspent at least $570,000. Source: http://www.cleveland.com/metro/index. ssf/2012/03/audit_finds_more_than_570000_i.html

Cincinnati College Preparatory Academy Charter School: After receiving an anonymous tip, the Ohio Auditor of State’s office investigated the Cincinnati College Preparatory Academy Charter School and found that administrators stole at least $148,000 of taxpayer money. Superintendent Dr. Lisa Hamm and school treasurer Stephanie Millard were indicted in March of 2013 on multiple criminal charges. The two are alleged to have used school funds to pay for things such as sightseeing tours through Europe, a $20,000 tour of California, and a Chicago trip to a Tina Turner concert, all under the guise of visiting schools to identify best practices or for professional development. Source: http://www.wcpo.com/news/local-news/charterschool-officials-to-appear-in-court-for-allegedly-spending- 148k-in-school-funds

Many more instances of Ohio fraud, waste, and abuse can be found in our report.

Recently U.S. Sen. Sherrod Brown blasted

Ohio's charter school system for having rampant waste and fraud. In a statement he said, "We want to make sure these charter schools effectively educate children," "Right now they're not.”

“It’s time to fix our broken charter oversight system. Sending millions of more dollars to states with broken charter schools laws will only exacerbate the fraud problem.” said Serrette

###

The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.

Outside the office of U.S. Senator Pat Toomey in Philadelphia Tuesday, a group of activists chanted, “Don't cut Medicaid, save our liberty," in a day of actions outside congressional offices in 39 states around the United States.

The national grassroots organization ADAPT of disability rights activists led the sit-in at the Republican's office.

Read the full article here.