Income Inequality

The Value of an Employee

The Value of an Employee - January 27, 2019

State Representative David Perryman

Retail entrepreneurs have coined enduring mottos designed to invigorate the people who work for them. For instance, Marshall Field was famous for directing his employees to “Give the lady what she wants” and reminding them that “The Customer is Always Right.” What Mr. Fields and thousands of other successful CEO’s knew was that while the “Customer was King,” the men and women that he employed were the most important asset that he had.

Richard Branson, British entrepreneur, who founded the more than 400 companies comprising the Virgin Group and whose net worth exceeds $5 Billion, best captured the concept when he said, “Clients do not come first. If you take care of your employees, they will take care of the clients.” This theme was not just British. For generations, the “partnership” between American business and its employees was strong and vibrant. The successful business model created “company men” and “company women” who in return for the security of employment and its benefits would contribute a lifetime of loyalty to their jobs.

Change came gradual. Whatever the reason, this era of massive pay gaps between executive salaries and other company employees is indicative of corporate America’s devaluation of its employees.

            According to a January 2018 report from the Economic Policy Institute, the average CEO pay is 271 times the average pay of the typical American worker. The Institute compares that with 1978, when CEO earnings were roughly 30 times the typical worker’s salary.

            Forbes Magazine in May 2018 reported that if we have any doubts about the disappearance of the American middle class, we need look no further than this pay-gap. That report stated that, “In the 1950’s, a typical CEO made 20 times the salary of his or her average worker and in 2017 CEO pay soared to an average of 361 times more than the average rank-and-file worker pay.”

            According to Al Lewis of Market Watch, frustration is heightened through our realization that when a business goes bankrupt, receives taxpayer bailouts or pay millions in fines for fraud, the average golden parachute for “forced out CEO’s” in 2013 was valued at $48 Million, while average employees are left in the cold.

The economic damage does not stop there. In increasing quantities, corporate assets are allocated to lobbying and legislative influencing through an embedded process that undermines pensions, workers compensation and other special benefits that have historically provided retirees and disabled workers with a safety net to prevent them from retiring into poverty or having to rely on welfare after their bodies become worn out or injured in the service to their employers.

            For instance, even though cases of black lung disease among miners was on the rise last year, a report in Roll Call published last week shows that coal companies and coal industry groups actively lobbied federal lawmakers against extending a program that has historically provided benefits for sufferers and their families. According to mandatory financial disclosures, the coal lobby spends between $1.5 and $2 Million annually to influence legislation. A portion of that last year was spent seeking a 55% decrease in the tax that funds the Black Lung Disability Trust Fund. Legislators followed the industries direction and allowed the decrease to take effect despite the fact that since 1979, the fund has had to be supplemented nearly every year.

            Consequently, coal companies receive another big tax break while afflicted employees and their families are left to seek other sources of revenue to meet health and medical expenses they face solely because of the occupation that they engaged in.

            The situation is not foreign to Oklahoma where employees are suffering from similar treatment. Employers of tens of thousands of Oklahomans do not provide health insurance coverage and do not compensate their employers sufficiently to allow the employee to purchase health insurance. Without access to insurance, affected employees involuntarily become recipients of uncompensated care; hospitals and ambulance services are required to provide services for which they will never be paid; and the rest of us are subsidizing those employers who are not paying wages to cover the cost of housing, food, education and medical care.

            For the sake of protecting shareholder dividends and CEO salaries, uninsured employees are placing such a burden on Oklahoma’s health care providers that we may all lose health care access.

            Questions or comments, contact David.Perryman@okhouse.gov or 405-557-7401

Home Grown Oligarchy

Home Grown Oligarchy - April 10, 2018

State Representative David Perryman

Oligarchy is one of those words that Mr. Michaels taught us in our junior high government class. He told us that is was a government system where power is controlled by a small, often wealthy, percentage of a country’s population. I assumed from his explanation that oligarchies exist in those countries where citizens are not allowed to vote in their best interest.

Kimberly Amadeo, a respected writer, economist and money manager who also frequently appears on the Fox network made a number of poignant remarks about oligarchies earlier this year in an article that appeared in the online magazine, “The Balance.”

Ms. Amadeo pointed out that an oligarchy can occur in any political system. In a democracy, oligarchs are not elected by the people. Instead, they use their relationships and money to influence elected officials. As a result, the advantages gained by oligarchs/elites gives them more influence. Left unchecked the competitive advantages gained foster an organized minority as opposed to an unorganized majority and any system of government will eventually become an oligarchy.

The article says that the benefit of an oligarchy is that the majority of people are allowed to focus on their careers and their hobbies and their family and not be bothered with the issues that concern society as a whole.

However, according to the author, oligarchies increase income inequality because while the majority of people are working to support their families, oligarchs siphon a nation’s wealth into their pockets leaving less for everyone else. As oligarchs gain power, they seek to keep it.

Oligarchies can form when the elite class takes action to exert greater influence over things like tax policy. That action is normally in the form of financial influence to further the goal of the elite without regard to the harm that it may do to society. Slashing tax rates on high income earners or on a specific industry would be an example of this or another example is to lower labor costs by suppressing wages or weakening organized labor.

 They also form when elected leaders are weak or are weakened by policies that benefit the elite. For instance, legislation such as term limits would arguably weaken the legislature and shift power to the elite and their lobbyists.

Finally, oligarchies also arise in democracies where the people are uninformed or misinformed. Elites that control wealth, media and information have the power to manipulate perception. For instance, in Oklahoma, a group called RIED claims to promote economic growth. However, RIED’s Board of Directors is primarily comprised of the same group of business executives who promoted the Step Up Oklahoma Plan (HB1033xx) last fall.

Many, including myself saw the Step Up Plan as regressive and a way to cap oil and gas gross production tax at the nation’s lowest rate and further shift the tax burden from high wage earners to working Oklahomans. It made sense because many of the Step Up Plan promoters had spent the better part of the last quarter century undermining public education in Oklahoma.

So, it came as no surprise when RIED’s annual legislative grade card placed undue weight on the Step Up Plan vote and totally disregarded the passage of HB1010xx, which was the bill that included a greater increase on oil and gas production taxes and a 50% smaller increase in regressive gasoline taxes and a 1/3 smaller tax on cigarettes.

The goal and effect of RIED was to negatively impact legislators who voted NO on the Step Up Plan and YES on the plan that actually put more money into teacher pay, increased funding for textbooks, support personnel and other educational expenses.

It is no surprise that most Americans feel disenfranchised and helpless in influencing their society. Gallup reports that 76% feel dissatisfied with the way things are going right now. Sixty-seven percent are dissatisfied with income distribution and 43% fee that there is not much opportunity to get ahead.

We shouldn’t be surprised that populist protest groups such as the Tea Party have formed. We all share much of the same frustration. The sooner we unite our efforts toward attaining goals that benefit all Americans the sooner we will overcome the division and discord of the oligarchical society that we have become.

Questions or comments, please call or write 405-557-7401 or David.Perryman@okhouse.org.

Missing Mayberry

Missing Mayberry - December 27, 2015

State Representative David Perryman

Rascal Flatts’ 2003 release “Mayberry” laments our society’s constant toil and unmoderated pursuit of more, which is really less.  It reminisces of a slower time where houses had porches that were actually used to visit with friends and neighbors.

Most of us remember parents who toiled to make things better for us and society’s structure and shared values actually directed us toward social mobility and the American Dream.

Today, our culture faces an economic and societal crisis that places those goals at risk, but this is not the first time in our nation’s history that young Americans have been cut-off.

A bedrock principle of America is equality yet our history shows that we constantly migrate away from actions that provide equal access to opportunity and often need to be redirected.

America was relatively young when it became apparent that our republic would not survive if our citizenry did not possess the educational skills to be effective citizens. Class divisions and regional interests threatened the fabric of this young nation. Horace Mann argued that universal, non-sectarian, free public education was essential to turn the nation’s unruly children into disciplined, judicious republican citizens.

Mann’s vision produced a cohesive society by convincing the American people that education must have a goal of social efficiency, civic virtue and character, and not merely involve learning or advance purely sectarian ends.

Leading up to the 20th century, unchecked industrialism imposed income inequalities to a degree that social order was threatened by stagnated social mobility. Again, through the collective courage of civic minded Americans, universal and free high schools were established and the dream was restored.

Now, in the second decade of the 21st century, income inequality is higher than at any time in Oklahoma’s 108 year history with data from the Economic Policy Institute showing that the average income of the top 1% of Oklahomans is 26 times greater than the average income of the other 99%.

In the 33 years between 1979 and 2012, while the top 1 percent’s income grew by 143.2% and the top 0.1 percent of Oklahomans saw their average income swell to $28,439,334, the average income of the entire rest of the state grew by just 8%, placing many parents in a situation to be more concerned about making ends than mentoring or guiding their children.

Robert Putnam, author of “Our Kids: The American Dream in Crisis” and who will be speaking next month on the campus of the University of Oklahoma asks, “When did poor kids stop being “our” kids?”

Dr. Putnam’s extensive research is focused on the web of formal and informal supports that help students in poverty succeed academically and in life. His premise is that income inequality, poverty, and a generation or more of lost dreams are intractably interwoven into what he refers to as a “connection gap” resulting in the intense isolation of poor children who are robbed of the ability to function at any productive level in our society because there is no resource to put them “back on track.”

We all have our own version of Mayberry. Mine involves loving parents who frequently helped “adjust my direction” and never for a moment left me without a vision for the future.

When the “life guidance” that occurs without fanfare in wealthier homes is absent in the lives of poor children, they are left without second or third chances and doors that were never functionally open are slammed in their faces.

Your comments are welcome at 1-800-522-8502 or at David.Perryman@okhouse.gov

Welcome to Monet, Oklahoma

Welcome to Monet, Oklahoma - December 6, 2015

State Representative David Perryman

Claude Monet painted in the 19th and 20th century and was among the leaders of the French Impressionist movement. Monet’s open air approach and the fact that he dwelt more on color and light than linear perspective resulted in a style of art that most believe is best viewed from a distance.

Not only does distance make the subject of the art appear more “whole,”, the distance separates the viewer from the more abstract components of the painting that are often described as rough swatches or loose splashes of  color that appears somewhat disjointed on close inspection.

Appreciating a Monet from across the room is somewhat similar to checking one’s cattle from a mile high flyover. The cattle may or may not be there, but the view is sure nice.

Some folks regularly treat Oklahoma like a Monet. They allow urban legends and lofty statistics to tell them how good or how bad things really are in Oklahoma.

For instance, there is a temptation to feel good about the state when increases in per capita income are announced. Some of those “Monet” numbers tell us that during the 28 years from 1979 and 2007 the average income in Oklahoma rose 33.9%, just 3% behind the national income growth of all Americans during that same period.

However, the up close numbers show us that during that period and the next five years, the income of the top 1% of Oklahomans grew by 143.2% while the income of Oklahoma’s other 99% grew by only 8%. That means that of all income growth from 1979 to 2012, 67.9% of it went to the top 1% while all of the other 99% shared only 32.1% of the income growth during that period.

Today, on average, it takes $3.28 to purchase what we could purchase for $1.00 in 1979.

To put it in simpler terms, back in 1977, during my hamburger flipping days, a Sonic Burger cost 65 cents (and a dime extra for the cheese). Fries were 40 cents and a quarter bought a Coke on ice. Everything together was a bargain at $1.40. Today, that same combo costs $6.11, for an increase of 436%.

In 1977, a person earning the minimum wage of $2.30 per hour, had to work 36 minutes to purchase a that Sonic Combo. Today, a minimum wage employee must work 51 minutes or 41% longer for that meal.

Monet, Oklahoma is really beautiful, from a mile in the air, but caring enough to understand the real economic difficulties faced by working families who often don’t know where their next meal is coming from, are unable to afford medical care and don’t know if they will be able to keep their children warm tonight requires routinely getting up close and personal.

There is no time like the present holiday season for us to make going outside our comfort zone a part of our lives.

Your comments are welcome at 1-800-522-8502 or at David.Perryman@okhouse.gov

The Cost of Doing Business

THE COST OF DOING BUSINESS…FOR THE COMMON GOOD - September 15, 2013

State Representative David Perryman

My father in law is a horseman.  He has loved and cared for horses all his life.  His relationship with horses began of necessity during the Great Depression as he grew up in Holson Valley below the north side of what is now as southeastern Oklahoma’s Talimena Drive.  Horses began as a tool for him and his family skidding logs, clearing rocks and stumps and pulling plows.  Through the years they served as a means of transportation and during his later years have become his hobby.

From his youth, he realized that the value of a horse depended to a large extent on how the animal was treated.  Not only did mutual respect and affection maximize the depth of the bond between man and horse, a lesson learned early was that a horse should not be “ridden hard and put up wet”.  That phrase has been misused and abused through the years, but with clarity it simply means that a horse’s future health and vitality depends upon how it is treated at the end of the workday.

Not only the horse’s longevity, but also its physical ability to perform the next day is integrally dependent upon the systematic process of cooling the horse down, allowing it to re-hydrate and rejuvenate.  Because of its living, breathing existence as a flesh and blood animal, its quality of life requires care and compassion. This realization is not new.  Shakespeare acknowledged this truth in the third act of Macbeth when Banquo’s predictable treatment of his horse resulted in ambush and death.

Much has changed through the years.  Today, we live in a rapidly changing world where new technology becomes outdated in a matter of months. Computers with insufficient memory or ROM that is too slow are cast aside. Big box stores locate on leased property and within 10 to 15 years have “used up” two or three locations.  Equipment is classified as “antiquated” and auctioned for salvage as soon as it is depreciated out on a corporate tax return.  Fleet vehicles are disposed of for cents on the dollar.  All things are routinely replaced with modern, efficient models.

Disposable resources become the norm.  Corporate bottom lines dictate decisions based solely on the cost of raw material, the cost of equipment, the cost of infrastructure, the cost of real estate and brick and mortar.  Factors such as real and personal property taxes, intangible or not, income taxes, and capital gains taxes drives long range business plans and future investment.  Investors want return and corporate managers and boards of directors comply.

Lost in the never ending quest for quarterly earnings reports is a 21st Century adaption of the old adage about “riding it hard and putting it up wet.” Over the past 30 years, the saying is more relevant to employees than it is to horses.  Working Americans struggle to make ends meet. Salaries have been relatively stagnant for nearly three decades. Health care costs and the costs of health insurance have skyrocketed.  Pensions and other retirement benefits are under attack. Even workers compensation benefits for injured workers have been cut.  Workers have less buying power today than at any time since statehood.

 Employees and their benefits are scrutinized and downsized as if they were any other item in the “cost of doing business” computation. As a result, America is experiencing a disparity in the distribution of wealth that has not been seen since the era of the 1920’s just before the collapse of our economy in the great depression. 

According to the Center on Budget and Policy Priorities, income for all Americans grew substantially and equally from World War II to 1979.  Since 1979, however, income for the top 1% of Americans has grown by 304% while income for the bottom 80% has grown by less than 40%.  In 1980, the top 1% of wage earners earned 10% of the nation’s income.  In 2007, that same 1% received nearly 31% of the country’s income.

Even greater disparity exists between the top 1% of wage earners and public sector employees who routinely earn less than their private sector counterparts.  Oklahoma is no exception.  Public employees are often vilified and labeled as “part of the problem” by those forces who march lockstep on a relentless campaign to cut pensions, decrease benefits and stymie attempts to increase salaries for our teachers, highway patrolmen and other state employees.

Until Oklahomans engage and call senators and representatives, this trend will continue.  Until Oklahomans engage, we will continue to experience irresponsible cuts such as the 22.8% decrease in Oklahoma’s education funding that was greater than any other state’s since 2008.  Until Oklahomans engage, Oklahoma workers will continue to be “ridden hard and put up wet.”

Thank you for allowing me to serve as State Representative.  If you have questions or comments about this issue or any other matter, please contact me at David.Perryman@okhouse.gov or 405-557-7401.