Well Ms Serp knows a lot more about this than me, so I won't try to argue any of her figures. I have emailed the CTJ and asked for clarification. If I get a response, I'll post their defense of their claim.
I will, however, take issue with a couple of things she posted.
This post began with a discussion in support of the Verizon union workers. In the interest of full disclosure, I will acknowledge I am not personally a huge proponent of unions; I think they served their purpose in the early part of the 20th century and mostly, have no place in the 21st century and are responsible for the decline of many American businesses.
This sentiment was obvious reading the post, but let me point out what I find troubling.
The other key figure thrown around by the CWA is that Verizon is asking for concessions of $20K per employee in pay and benefits. While that may be a true statement (I personally do not know enough about the specifics to dispute that), the vast majority of the $20K is related to fringe benefits. Most people think that companies only pay their salary and forget about the other costs that employers bear related to each employee (cost of vacation and sick time, health benefits, retiree medical benefits, pension payments, 401k matching, etc.) Verizon is not asking that each employee to forfeit $20K in salary, but rather that they forego some of the fringe benefits Verizon has previously provided but has determined that in the current economy, are no longer feasible to provide. The reality is that in this economy, Verizon will lose customers and ultimately reduce is revenues while still operating with the same extensive infrastructure if it raises prices on its cable, internet, and landline business and that even without these fringe benefits, there are thousands of American workers who would gladly line up for those jobs. These two facts indicate that Verizon is just simply responding to the change in economic circumstances and is doing so in a more timely manner than the airline and automotive industries did.
The other often maligned quote is to claim that Verizon paid $258 million to just a few executives over the past few years. Let's just isolate this to the CEO who earned a mind boggling $18.2 million in 2010. Let's break this down. His salary was approximately $2.1 million. A lot for you and me, but not really outside the realm of reasonableness for the CEO of a multibillion dollar company. He earned stock awards of $11.2 million and short-term comp of $4.0 million. This is where you and I start to go woah, but if you look into the details of this compensation, you'll see that it is ENTIRELY PERFORMANCE-BASED and not on fluffy targets but on the Company meeting certain financial targets and operational goals, as well as, the Company meeting certain stock targets. The value of these awards are linked directly to the stock price and if the CEO is not directing the Company on a path to create additional value or return on investment to its shareholders, the awards can be become worthless. Put this way, if this was Lehman, the entire $15.2 million of compensation for accounting and disclosure purposes would be worth $0 to the CEO. The other key part of this is that the $15.2 million is not cash out of the Company's pocket. This "compensation" can never be taken from the CEO and allocated to employees which is the subtle argument made in presenting this information in press releases to advocate for the union employees. The rest of his compensation ($1.0 million) is comprised of typical perks: use of private plane, life insurance, deferred compensation plan contribution (in lieu of a pension plan payment as most highly compensated individuals are capped by IRS rules too complex to explain from participating in the Company's regular plan), company car, etc. These are pretty standard for fare for most CEOs and are not surprising for a CEO of such a large company. The rest of this compensation to executives can be broken down similarly and makes for a weak argument from the union perspective.
You seriously justified a 20k reduction in compensation, mostly to medical and retirement benefits, and then also justified paying the top execs hundreds of millions of dollars.
Also, just to be clear about something, Verizon's wireless business is using Verizon backhaul from the landline business. Those two businesses are linked at the hip. So while Verizon's landline business may show a decline on the consumer side, with LTE rolling out all over the place the landline business is still going strong. Maybe not as strong as it was 10 years ago, but still solid. And FIOS is doing good too.
Anyway, my point is it just isn't right to ask all your blue collar employees to take a 20k reduction each, while paying hundreds of millions to the top execs. Especially if your company made 12 billion in profits. If this is the norm, then this country is doomed. Ignored in that response though, was that Verizon also wants to outsource thousands more jobs. You can bet those jobs would already be outsourced if it weren't for the union opposition, so the union definitely still serves a purpose.
While I agree that many Americans would line up for those jobs in this economy even with the 20k reduction, the same can be said about those exec jobs. Plenty of people would be lining up for those exec jobs even if they took a several million reduction.
Hopefully the CTJ responds and clarifies how they came to their conclusion regarding the taxes. That's kind of a major claim to have out there if they aren't totally sure.
