Harley-Davidson Move Shows Failure of Trump Tax Cuts

In February of last year, President Donald Trump met with executives and working people at Harley-Davidson, promising that his proposed changes to tax law, trade, tariffs and other policies would help the company grow and working people would be the beneficiaries. This promise was widely made by Trump and other Republican advocates of the tax bill that Trump signed in December. But, as time goes on, we see, more and more, that the law not only isn't helping working people, it's making things worse.

Here are some of the key things you need to know about the tax law and the effects it has on working people (using Harley-Davidson as an example):

  • Harley-Davidson is laying off 800 workers at a Kansas City, Missouri, factory by the fall of 2019.

  • The company says it expects to add 450 full-time, casual and contractor positions to its plant in York, Pennsylvania. This is a net loss of 350 jobs, but considering that some of the new jobs aren't full-time, the loss is bigger.

  • The company just announced a dividend increase for shareholders and a stock buyback plan where it will purchase 15 million of its shares with a current value of just under $700 million.

  • In the first three months after Trump signed the tax bill, corporations have spent a record $178 billion in stock buybacks.

  • Harley-Davidson is a profitable company, making between $800 million and $1 billion in pre-tax profits.

  • The company will be opening a plant in Thailand. It says that the new plant isn't related and that it isn't outsourcing jobs, but advocates for working people reject that argument: "Part of my job is being moved to York, but the other part is going to Bangkok," said Richard Pence, a machinist at the Kansas City plant. 

  • Greg Tate, a representative of United Steelworkers District 11, which represents about 30% of the plants workers, suggested that the tax bill may have freed up money to make the move: "They have the capital now to move Kansas City, to shut it down. All of that money really came from the tax cut plan, so it kind of had the opposite effect of what it was supposed to do."

  • Machinists (IAM) President Robert Martinez Jr. sent a letter to Trump asking him to save the Kansas City plant: "For decades, hardworking Machinists union members have devoted their lives to making high-quality, American-made products for Harley. America’s working men and women deserve better than being thrown out onto the street. Our nation deserves better." Trump did not budge.

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Reposted from AFL-CIO

Posted In: From AFL-CIO, Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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