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Resolutions & Amendments

32nd International Convention - Chicago, IL (1996)

Corporate Welfare and Job Security

Resolution No. 102
32nd International Convention
June 17-21, 1996
Chicago, IL


Since 1980, corporate profits have risen 205 percent. After-tax profit rates in 1994 were the highest in 25 years. At the same time, profitable companies have been laying off workers in record numbers. For example, Kodak posted profits of over $4 million from 1992 to 1995 while announcing lay-offs of 10,000 workers. Proctor and Gamble posted profits of over $6 million and announced lay-offs of 13,000 workers.


The percentage of corporate income paid out as taxes has fallen sharply from an average of 44.3 percent between 1952-79 to 32.4 percent in the 1980s to an average of 31 percent so far in the 1990s. Higher after-tax profit rates are partially due to lower taxation. Had the tax rate on capital income remained at its 1952-79 average, government revenue would have increased by $40 billion in 1994 -- an amount equal to 25 percent of the deficit that year; and


Business profits have been fueled by stagnant or falling wages. Over the 1989-1995 period and even during the recovery years since 1991, inflation-adjusted hourly wages have been stagnant or declining for the vast majority of the workforce. As companies pay higher profits to shareholders, less is given to workers for salary increases. If workers were getting the same share of profits as they did in 1989, they would be making almost $1,400 more per year than they do now.


In 1960, CEOs earned 12 times the average wage of a factory worker at the same place of employment. By 1974, the CEOs' wages had grown to 35 times that of the company's average worker and by 1995, the CEO earned 135 times as much in wages and compensation as did the average worker at the same place of employment. At the top ten corporations, the CEO outearns the average worker by 225 times; and


As many of the top companies have laid off workers in the last three years, the CEOs of these companies have reaped windfall earnings. On the same day that the CEO of AT&T -- who had a $16 million pay package in 1995 -- announced that AT&T would lay off 40,000 workers, the value of his stock portfolio went up by $5 million; and


A Republican provision in the budget reconciliation bill would allow companies to take money from ongoing pension trusts. This bill puts workers, retirees, the Pension Benefit Guaranty Corporation (PBGC) and national savings at risk to fuel mergers and takeovers that ultimately lead to further job losses.


That AFSCME will support passage of the Corporate Responsibility Act (H.R. 2534) that calls for eliminating $800 billion in federal tax breaks, subsidies, and other federal benefits for corporations and upper-income individuals and H.R. 1842 that forbids the use of federal funds to support activities that simply relocate jobs from one state to another; and


That AFSCME will work in state legislatures and city councils to pass corporate accountability bills and spearhead the movement at this level. This includes such requirements as setting wage and hiring targets before any corporation can receive a tax incentive and requiring companies to pay back the tax break if they fail to comply with targets; and


That AFSCME utilize information exposing campaign contributions by "deadbeat corporate citizens" for preferential tax treatment for grassroots education of union members as well as the public and the media. AFSCME will educate the public about these issues in targeted areas and will incorporate these issues into the grassroots member education program this year.