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Corporations and Public Health: Profits Before People

Corporations and Public Health: Profits Before People. Martin Donohoe. Am I Stoned?. A 1999 Utah anti-drug pamphlet warns: “Danger signs that your child may be smoking marijuana include excessive preoccupation with social causes, race relations, and environmental issues”.

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Corporations and Public Health: Profits Before People

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  1. Corporations and Public Health:Profits Before People Martin Donohoe

  2. Am I Stoned? A 1999 Utah anti-drug pamphlet warns: “Danger signs that your child may be smoking marijuana include excessive preoccupation with social causes, race relations, and environmental issues”

  3. Corporations Dominate the Global Economy • Almost 6 million corporations • 90% of transnational corporations headquartered in Northern Hemisphere • 500 companies control 70% of world trade

  4. Corporations Dominate the Global Economy • 69 of the world’s 100 largest economies are private corporations; 31 are countries • Wal-Mart has more annual revenue than Spain and Australia • Royal Dutch Shell > Mexico • United Health Group > Denmark and Saudi Arabia

  5. The Stock Market • The top 1% of Americans owns 51% of all stocks, bonds, and mutual fund assets ; bottom 90% own 6.8% • Consequences of Differential Stock Ownership • Corporations are answerable to their shareholders • Governments are answerable (at least in theory) to their citizens (either through elections or revolutions)

  6. Corporations • Internalize profits • $2.0 trillion (2015) • Externalize health and environmental costs

  7. Corporate Taxation • Corporations shouldered over 30% of the nation’s tax burden in 1950 vs. 8% today • Nearly 1/3 of all large U.S. corporations pay no annual tax

  8. Corporate Taxation • Big business claims that U.S. corporations pay the highest corporate taxes in the world (35%) • FALSE: The rate actually paid, after foreign governments get their cuts, money sent to foreign subsidiaries, loopholes, etc. = 27% (U.S. Treasury Department) vs. 28% average for 30 OECD nations • 17% for corporations with assets over $10 million

  9. Reasons for Inadequate Corporate Taxation • Corporate tax breaks/loopholes • Corporate welfare • Cheating and under-payment common

  10. Offshore tax havens shelter capital • Up to $32 trillion estimated (1/3 of all global wealth) • $11.5 trillion in individual wealth • U.S. GDP = $16 trillion • Cayman Islands: • Population 150,000 • Home to 92,000 corporations

  11. Ugland House, Cayman Islands18,000 Corporations Registered Here

  12. Reasons for Inadequate Corporate Taxation • Multinational companies change tax residence to a foreign country through its subsidiaries • Others merge with or purchase a foreign company and make it the parent company (“inversion”), then legally move patent ownerships and trademarks to the new parent company • E.g., Apple, Microsoft, multiple pharmaceutical companies

  13. Corporate Profits:Where do they go? • S and P 500, $2.4 trillion total (2015) • 54% to stock buybacks that help boost executive pay • 37% to dividends for shareholders • 9% to R & D and training and raises for workers combined

  14. Job Creators?

  15. Corporate Taxation • 2004: Bush administration offered temporary tax holiday on foreign earnings • $300 billion in profit repatriated • 92% went to dividend payouts, stock buybacks, and corporate coffers • Only 8% went to R and D, new factories, and hiring

  16. Corporate Taxation • 2017 Trump tax bill offers companies a one-off lower tax rate on funds repatriated to U.S. • 94% of profits between 2005 and 2015 returned to shareholders through dividends and stock buybacks

  17. Exorbitant CEO Pay • Median U.S. CEO salary (for S and P 500 corporations) = $13 million (2016) • CEO salaries up 997% since 1978 • Average worker pay up 11%

  18. Maldistribution of Wealth • U.S: Richest 1% of the population owns 50% of the country’s wealth; poorest 90% own 30% • Widest gap of any industrialized nation • 3 richest men in the US (Bezos, Gates, and Buffett) have more wealth than 50% of the population

  19. Most Recent Annual CEO Pay Average for Large Corporations, in Millions of Dollars (2016) • Japan: $2.4 • France: $2.8 • India: $3.1 • Australia: $5.4 • Germany: $8.4 • Canada: $9.3 • UK: $9.6 • USA: 17.0

  20. Exorbitant CEO Pay • The average CEO makes 299X the salary of the average U.S. worker (1960 - 41X) • US Military: 20:1 (top rank : lowest rank) • US ratio of average CEO to minimum wage worker = 774:1

  21. 2017 Data

  22. Matthew 6:24 “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money”

  23. Wages • Weekly wages for the average American worker are up 9% from 1973, but productivity is up 72% • Federal minimum wage = $7.25/hr • 25 states and DC have higher minimum wages (Oregon = $9.75/hr, 2014) • $14,500/yr for full-time job • Real value down over 40% compared with 1968 • Minimum Wage ≠ Living Wage • Inadequate to pay rent, buy food and clothing

  24. Minimum Wage ≠ Living Wage • ¼ of US jobs pay less than a poverty-level income • Public service sector workers earn less than private sector employees (after adjustment for age, education, and years of experience) • Wage theft common, worst among lowest paid workers • Costs American workers $50 billion/yr (2016)

  25. Minimum Wage ≠ Living Wage • Increasing to $9.25/hr on Jan 1, 2015 • Movements supporting $15/hr (still inadequate) • Over ½ of nation’s basic public assistance funds go to working families (substitute for benefits, therefore, taxes support corporations)

  26. Solutions:Living Wage • Over 140 municipalities have adopted living wage laws • Including NY, LA, SFO, Seattle, Chicago, and Philadelphia • 15 states now have minimum wages that exceed the federal requirement • 10 states have passed pre-emptive laws forbidding cities and counties from raising the minimum wage

  27. Corporate PR Tactics • Advertising • “The art of convincing people to spend money they don't have for something they don't need.“ (Will Rogers) • Astroturf - artificially-created grassroots coalitions • Corporate front groups • Corporate espionage: spying, bribes

  28. Corporate PR tactics • Invoke poor people as beneficiaries • Characterize opposition as “technophobic,” anti-science,” and “against progress” • Portray their products as environmentally beneficial despite evidence to the contrary • Host all-expense paid educational seminars for federal judges

  29. Greenwash • Public relations / ad campaigns • BP invests $100 million annually in clean energy = amt. it spends annually to market itself as moving “Beyond Petroleum”

  30. Sponsored Environmental Education Materials (Examples) • International Paper -“Clearcutting promotes growth of trees that require full sunlight and allows efficient site preparation for the next crop” • Exxon’s “Energy Cube” -“Gasoline is simply solar power hidden in decayed matter” -“Offshore drilling creates reefs for fish”

  31. Sponsored Environmental Education Materials (Examples) • American Coal Foundation’s “Power from Coal”: • “The earth could benefit rather than be harmed from increased carbon dioxide.”

  32. Academics/Professional Organizations Affected • Increasing corporatization of academia • ↑Private commercial funding of university research • Undone research • Secrecy/Gag Clauses • Open Science Movement opposing secrecy • Corporate-sponsored harassment of scientists

  33. Academics/Professional Organizations Affected • For-profit colleges (e.g., University of Phoenix, ITT Tech, Trump University) were growing, marked by corruption, high interest rates on loans to the un- and under-qualified (some have shut down, paid fines, settled lawsuits)

  34. Academics/Professional Organizations Affected • Dramatic decrease in tenured faculty, rise in administrators • Gagging of researchers at federal agencies demoralizing, can affect recruitment of quality scientists

  35. Union of Concerned Scientists (2015)

  36. The Media • 6 corporations control 90% of US media • Extensive corporate-media links • American Council on Science and Health

  37. Global Warming: Controversial? • Of 928 articles in peer-reviewed scientific journals, none were in doubt as to the existence or cause of global warming • Of 636 articles in the popular press (NY Times, Washington Post, LA Times, WSJ), 53% expressed doubt as to the existence (and primary cause) of global warming Science 2004;306:1686-7 (Study covers 1993-2003)

  38. Lobbying • Approximately 40,000 lobbyists (11,781 full-time) • Estimates of return on lobbying range from $28 to $212 for every $1 spent (higher values more likely)

  39. Lobbying • Oxfam study (2008-14) of 50 major US corporations found return of $130 in tax breaks and $4,000 in tax subsidies for every $1 spent on lobbying • Return on campaign contributions for elections for the most politically active companies = $760 per $1 spent

  40. Lobbying/Campaign Contributions • Koch brothers spent over $400 million (2012) • All single issue ideological groups combined (e.g., pro-choice, anti-abortion, feminist and consumer organizations, senior citizens, etc.) = less than $100 million (2015) • Lobbying groups spent 3.2 billion in 2015

  41. Lobbying • Federal lobbying groups spent $3.2 billion in 2015 • All single issue ideological groups combined (e.g., pro-choice, anti-abortion, feminist and consumer organizations, senior citizens, etc.) spent under $100 million

  42. Lobbying (2012) • Corporations spent $86 for every $1 spent by civic groups • Corporations spent $56 for every $1 spent by labor unions • Labor union membership declining (11% in 2017)

  43. Top-Spending Industries, 2015 • Pharmaceuticals/Health Products - $240,218,911 • Insurance - $157,354,782 • Oil & Gas - $129,876,004 • Business Associations - $128,808,164 • Electronics Mfg & Equip - $121,948,480 • Electric Utilities - $117,910,016

  44. Top-Spending Industries, 2015 • Misc. Manufacturing & Distributing - $105,904,266 • Securities & Investment - $98,133,863 • Hospitals/Nursing Homes - $93,497,884 • Telecom Services - $91,081,758 • Health Professionals - $89,878,202 • Air Transport - $81,722,628

  45. Top-Spending Industries, 2015 • Real Estate - $77,851,327 • Education - $77,222,880 • Defense Aerospace - $74,489,275 • Health Services/HMOs - $74,256,196 • Civil Servants/Public Officials - $71,597,628 • Commercial Banks - $64,962,735 • TV/Movies/Music - $62,142,091 • Automotive - $58,869,623

  46. Polluting Industries’ Political Influence • Oil, gas, and coal companies spent $354 million in campaign contributions and lobbying and received $29 billion in federal subsidies over the 2015-16 election cycle • $8,200 return on investment

  47. Campaign Cash and Lobbying • Citizens United • Congresspersons spend up to five hrs/d raising money, then many evenings at fundraisers • Lobbying promotes international non-cooperation/isolationism

  48. The alliance between GE Medical Systems and NY-Presbyterian Hospital

  49. General Electric • Previously ranked by Forbes as world’s largest company (based on equal weighting of sales, profits, assets, and market value) • 2015 revenues of $117 billion • Close to the GDP of more than 2/3 of U.N. member states • 2015 net after-tax profits of $15.9 billion • Majority from overseas operations

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