Updated: Mar 24
To: Members of the House and Senate
Economic Bail Out Packages Must Benefit Workers, Consumers, and Taxpayers – Not Speculators and Vulture Capitalists
In 2008 - the last time there was an economic crisis in this country - the country rushed to bail out big companies and entire industries to keep them solvent. The big banks on Wall Street, in spite of their role in causing the collapse, were rescued and almost immediately were handing out millions in bonuses to their CEOs.
When the auto industry got rescued, a loophole in the law allowed vulture capitalists like Paul Singer’s Elliot Management to score multi-billion dollar payouts on the backs of workers from companies like Delphi Automotive.
We must not allow that to happen again.
Some of these bailouts were necessary to saving the economy from collapse. But in all this rescuing and restructuring of industry, working families who were in deep economic distress got relatively little in return, except for some of their jobs being preserved, for a little while. Even then, many families lost their homes and jobs, and many union members were forced to renegotiate contracts, while a lot of bankers were getting 100% returns and more on their speculative investments. In this time of health and economic crisis, as we enter another round of industry bailouts, we need to prioritize helping workers and preventing abuse.
Senators Sherrod Brown and Elizabeth Warren are pushing to assure that any bailout would benefit workers and prevent abuse. First and foremost, in the wake of this crisis, we need to make sure all workers get fully covered or paid sick leave.
Senator Warren supports policies that would ensure bailed out companies maintain payrolls, keep union contracts in place, provide at least $15-an-hour wages, give at least one board seat to their workers, get shareholder approval for all political spending, and don't do any stock buybacks, or pay out executive dividends or bonuses for three years. Corporate CEOs would have to certify their companies are complying with these rules and would face criminal penalties if their company violated them.
Senator Brown has asked lawmakers to assure that any bailout ensures workers get tangible benefits from all the taxpayer money going out to bail out businesses, and to simultaneously prevent corporations and hedge funds from taking advantage of bailouts to make quick windfall profits.
His proposals would:
1. Provide protections for workers in any bankruptcy proceeding.
2. Prohibit any company receiving bailout funds from:
• Making any stock buybacks.
• Outsourcing or offshoring any additional jobs, including to U.S.-based contractor companies.
• Using public financial assistance funds to fund anti-union campaigns. Companies must provide a detailed accounting of any other company expenditures spent on company-backed or company-supported efforts to defeat an organizing effort.
• Using public financial assistance funds to pay stock compensation or offering golden parachutes to any company officers.
• Using public financial assistance funds to fund any efforts to defeat or weaken pro-worker laws being considered in any level of government country-wide. Companies must provide a detailed accounting of any other company expenditures spent on company-backed or company-supported efforts to defeat any pro-worker laws. Pro-worker laws include, but are not limited to legislation, regulations, or ordinances related to: minimum wage increases, collective bargaining or organizing rights, paid sick days, paid sick leave, overtime salary threshold, paid family leave, schedule notices, health care benefits, or employee/independent contractor status.
• Using public financial assistance funds to layoff or furlough any non-managerial employees until the company has first eliminated all outside consulting expenses and reduced executive compensation. Reduced executive compensation must remain in effect for the duration of any furloughs or layoffs.
3. Impose requirements for 10 years on any company receiving bailout assistance:
• Companies must cap executive officer compensation.
• Companies must remain neutral in any union election campaign.
• Companies must certify annually that they currently provide any contractor, subcontractor, or affiliate employees health insurance benefits equal to or greater than hourly health and welfare fringe benefit rates under the Service Contract Act for all hours worked by each employee.
• Companies must enter into profit-sharing agreements with its workers. At a minimum, the profit-sharing agreements must distribute 50% of any profitability increases above pre-coronavirus levels to its workers. Distribution of profits must occur on a sliding scale to allocate the most profits to non-managerial workers. These profit-sharing agreements shall be entered into independent of any collective bargaining agreements.
• Companies must certify annually that they have resolved all unfair labor practices, including by holding union elections that have been delayed. Companies may not receive any financial assistance, and ongoing financial assistance shall be suspended, unless that annual certification is provided.
• Companies must certify annually that they have entered into first contract negotiations with binding arbitration in all outstanding contract negotiations. Companies may not receive any financial assistance, and ongoing financial assistance shall be suspended, unless that annual certification is provided.
• Companies must permanently comply with the requirements in Workers’ Right to Training Act (S. 2468) to ensure any investments in technology or automation, which may be accelerated as a result of the COVID-19 pandemic, are predicated on worker consultation and training.
The undersigned organizations strongly urge Congress to incorporate these policy ideas as part of any industry bailout package:
American Family Voices
Brave New Films
Campaign for America’s Future
Center for Popular Democracy
Color Of Change
Democracy for America
Herd on the Hill
Jewish Labor Committee
Mi Familia Vota
National Children's Campaign
National Equity Action Team
Progressive Change Campaign Committee
Progressive Democrats of America
Scholten for Congress
Social Security Works
True North Research
Working Families Party