Senate Budget Committee Chairman Bernie Sanders invited both Amazon CEO Jeff Bezos and Jennifer Bates, one of Bezos’s employees, to a hearing on economic inequality on Wednesday, but only Bates agreed to show up and testify. Bates works at a massive Amazon fulfillment center in Bessemer, Alabama, where she said the workday is “grueling.”
“The shifts are long. The pace is super-fast,” Bates told the committee. “You are constantly being watched and monitored. They seem to think you are just another machine.”
Bates and other workers will soon vote on whether to join the Retail, Wholesale, and Department Store Union. Amazon has made headlines with an aggressive and costly campaign against the union push, forcing thousands of workers employed by the facility to attend multiple anti-union “education” meetings, according to Bates.
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“It’s frustrating that all we want is to make Amazon a better place to work,” Bates said. “Yet Amazon is acting like they are under attack. Maybe if they spent less time — and money — trying to stop the union they would hear what we are saying.”
Sanders said Bezos is worth $182 billion, making him one of the wealthiest people in the world. If he had showed up for the hearing, Sanders said he would have asked Bezos why he is doing “everything in his power” to prevent workers in Bessemer from joining a union so they can negotiate for better wages, benefits and working conditions.
“We’ll be asking about how it happens that the top one tenth of 1 percent now owns more wealth than the bottom 90 percent,” Sanders said. “Two individuals — Bezos and [Elon] Musk — now own more wealth than the bottom 40 percent, and meanwhile we are looking at more hunger in American than any time in decades.”
It’s not just Bezos and Musk: The collective wealth of the 651 richest billionaires increased by more than $1 trillion during the pandemic. From his powerful perch on the budget committee, Sanders is taking on the billionaires he so often criticized on the presidential campaign trail and the “crisis of wealth and income inequality” that is the senator’s signature issue.
On Wednesday, Sanders and other progressive lawmakers announced legislation that would raise taxes on companies that pay their CEOs at least 50 times more than the average worker, giving companies a choice between closing the wage gap or paying their “fair share” in taxes.
In 1980, CEOs of major companies made an average of 42 times more money than the typical worker, but since 2000, CEOs have made an average of 350 times more than their typical employee, according to testimony submitted to the Senate budget committee by Sarah Anderson of the Institute for Policy Studies. The wage gap ballooned in the 1990s, when employee wages stagnated and executive pay exploded as more companies offered their CEOs compensation in stock.
Anderson told the budget committee that, over the past few decades, jobs were outsourced to other countries while millions of others were turned into low-wage, part-time work without benefits, leaving families across the country vulnerable when the pandemic hit. Even with COVID relief from the government, millions of families have gone hungry during the pandemic, and nearly one in five of renters fell behind on rent within nine months.
“This growing pay divide has been a significant driver of gender and racial disparities,” Anderson said in her prepared remarks. “Women and people of color make up a disproportionately large share of today’s low-wage workers and a distressingly tiny share of corporate leaders.”
Nearly 80 percent of S&P 500 companies paid their CEO more than 100 times the median salary for their average worker in 2018, and nearly 10 percent had median pay below the federal poverty line for a family of four, according to Anderson. At the 50 publicly traded U.S. corporations with the widest pay gaps, the typical employee would have to work at least 1,000 years to earn what their CEO does annually.
Under the Tax Excessive CEO Pay Act, the legislation introduced by Sanders, Sen. Elizabeth Warren and two other senators this week, corporations that pay their top executives between 50 and 100 times the median salary offered to typical workers would see a 0.5 percent increase in their federal taxes. Taxes increase as the pay gap widens, with a maximum 5 percent tax increase applied to companies that pay executives 500 times what the average worker is paid. If Walmart, for example, refused to transfer wealth from executives to workers, the company would have paid up to $854.9 million more taxes last year under the legislation.
Amazon’s success during the pandemic has made the company a poster child for inequality. Amazon’s workforce — which is disproportionately Black – worked risky, front line jobs as more shoppers went online during the pandemic, but the company has shared little of its profits with its workers, according to the Brookings Institute. Amazon’s additional profits over the past year are more than five times the amount of extra money paid to workers for staying on the job despite COVID, and the company ended its $2 per hour hazard pay program last summer.
Bezos’s personal wealth grew by at least $68 billion during the pandemic (Sanders put that figure at $77 billion) — about 38 times more than the total amount Amazon spent on hazard pay for workers since the pandemic began.
“Amazon brags it pays workers above the minimum wage,” Bates said. “What they don’t tell you is what those jobs are really like. And they certainly don’t tell you that they can afford to do much better for their workers.”
Rep. Rashida Tlaib (D-Michigan), one of the bill’s co-sponsors in the House, said workers in the U.S. cannot afford to wait for CEOs to “do the right thing.”
“Corporate greed is a disease that has long afflicted this country — but the COVID-19 pandemic highlighted the gross income inequality and pay gap between CEOs and their employees in a way it never has been before,” said Rep. Rashida Tlaib. “Amid this crisis, Amazon’s profits more than tripled as sales soared and its warehouse workers risked their lives to make that possible — without hazard pay.”
The Tax Excessive CEO Pay Act faces an uphill battle in Congress and especially in the Senate, where Democrats hold only the slimmest majority. However, such a proposal could attract public support. Most Americans — 61 percent — say there is too much inequality in the U.S., including 78 percent of Democrats, according to the Pew Research Center. A 2016 survey found that 74 percent of Americans think CEOs are paid too much compared to the average workers, and 62 percent — including more than half of Republicans and two-thirds of Democrats — favor capping CEO pay relative to worker pay.
Meanwhile, Bates and other Amazon workers will continue fighting for a union, which would allow them to negotiate for better working conditions and higher pay.
“We need better working conditions, we need a better wage for living, we need job security, so it’s important for us that the union come so Amazon will have the opportunity to sit down and talk to us to get these issues resolved,” Bates said.
The increasing transfer of wealth from the working and middle classes to the ultra-rich in recent decades followed the decline of unions, according to Robert Reich, the former U.S. Labor Secretary and professor of public policy at the University of California at Berkeley, in testimony before the budget committee. Reich said less than 7 percent of workers are currently unionized, but 50 years ago one third were part of a union.
Corporate power has only grown thanks to deregulation as the collective political power of workers has declined, creating a “power imbalance” that reflects the massive gaps between what executives and workers are paid.
“Given the increasing power of large corporations and the decreasing power of workers it is not surprising that corporate profits have increased as a portion of the total economy while wages have declined,” Reich said in prepared testimony, adding that corporations have increased profits by keeping wages low.
Democrats are currently pushing the Protecting the Right to Organize (PRO) Act, a bill that recently passed the House and is considered by the labor movement to be the most pro-union legislation in decades. The PRO Act would make it easier for workers to join unions – and harder for companies like Amazon to get in their way.
Like raising the minimum wage and other pro-worker priorities for Sanders and progressive allies, passing the PRO Act and the Tax Excessive CEO Pay Act would likely require ending the filibuster in the Senate, where Democrats enjoy only the slimmest majority and Republicans dismiss Sanders’s claim that inequality is reaching “crisis” levels.
President Biden is skeptical about abolishing the filibuster, but he has hinted at support for reform that would require lawmakers to hold the floor when blocking legislation. Reports suggest the White House’s position on the filibuster is softening as it becomes increasingly clear that the GOP’s top priority is blockading Biden’s agenda.
As Democrats wrangle over a legislative path forward, Sanders remains focused on his core message: Inequality is reaching unprecedented levels during a deep crisis, and the billionaires profiting during a pandemic should share the wealth with workers who create it.
“The simple truth is that today in America the very, very rich are getting much richer, while tens of millions of working-class Americans are struggling to put food on the table and take care of their basic needs,” Sanders said.