Fight for $15, Peabody Energy Bankruptcy, Farm-to-Table Fakes

By Peter Ward     April 15, 2016

Inside Fight for 15

The Fight for 15 campaign, a movement that aims to establish a minimum wage of $15 in the U.S., celebrated two huge victories last week – minimum wage increases in both New York and California. This week, Buzzfeed reported on the origins of one of the most successful labor movements in recent times.

The Fight for 15 began in the fast food industry. In 2012, The Service Employees International Union sent petitioners to ask fast food workers in New York their thoughts on low cost housing. When they spoke to the workers, they found they weren’t even able to get to the topic of housing, such was the ire directed at the low wages and poor labor conditions experienced in fast food restaurant jobs.

Union organizer Kendall Fells was asked to look into the problem, and a meeting was called that year, attended by 40 or so workers from different franchises. The attendees realized they shared the same complaints, regardless of which fast food chain they worked for, and at a second meeting twice as many people showed up. At that meeting the signature demands of the group were established: a $15 an hour wage and a union. In November 2012, 200 cooks and cashiers walked out of New York restaurants.

The fast food campaign grew, and began directing its efforts away from the restaurants themselves to politicians capable of raising minimum wages at a state or city-wide level. Last April, the group marched in 200 cities and stopped traffic. This brought more industries into the group. “The tent is so big we’re now bringing every major industry under it,” said Fells. “Whether you’re talking about retail workers, home care workers, airport attendants, or child care workers.”

Now the movement, initially aimed solely at fast food restaurants, has helped secure minimum wage increases that will affect about 9 million people. This week the group will go back to its roots, as a day of strikes and protests target McDonald’s locations across the United States and internationally.

Income Tax by State

As Americans scramble to meet this year’s April 18 tax deadline, Bloomberg published a helpful interactive this week illustrating how different states stack up on income tax rates.

The first graphic compares the state-by-state differences in the effective tax rate for a household earning the median income ($36,841) versus a household earning $1,860,848, enough to enter the top 0.1% earners in the U.S. It shows that California has the biggest gap, followed by New Jersey and Vermont. Pennsylvania residents earning the median income pay the same tax rate as those in the top 0.1%.

The second set of charts are line graphs showing the differences in tax burdens between the wealthy and middle earners. California has the most progressive tax structure, with the highest tax rates fro the wealthy and the steepest curve. Hawaii, Minnesota, New Jersey and Vermont also have progressive tax systems, whereas Pennsylvania has a nearly flat tax rate and Alabama has an inverted system, with higher tax burden on the poor.

Peabody Energy Declares Bankruptcy

The world’s largest privately-owned coal producer, Peabody Energy, filed for bankruptcy protection in the U.S. last week.

Peabody joins Arch Coal, Alpha Natural Resources, Patriot Coal and Walter Energy on the list of coal companies that have filed for bankruptcy in the last few years. Those companies have lost a combined total of $30 billion in stock market value since 2010, the Wall Street Journal reports.

A decline in steel production and the conversion of coal-fired power plants to natural gas have contributed to the decline of the coal industry. Natural gas has become cheaper and more abundant due to the shale boom in the U.S.

Richard Black, director of the London-based Energy and Climate Intelligence Unit (ECIU), told The Guardian that environmental pressures is the biggest factor behind the coal industry’s decline. “Phasing out coal in favor of cleaner forms of energy, like natural gas or renewables, is a process which is accelerating around the world. US companies are going bankrupt, European countries including the UK are phasing it out, and our research also shows that talk of a coal renaissance in Asian countries is likely to be a red herring.”

The prices of certain kinds of coal have declined by 75% since a peak in 2011, making it harder for companies like Peabody to turn a profit. The company’s bankruptcy has also been blamed on an ill-timed and debt-fueled expansion into Australia.

Despite the struggles of miners, coal still fuels about one-third of the U.S. electrical grid. Americans currently get 32% of their electricity from coal, down from around half in 2008. Internationally, the U.K. has promised to halt the use of coal in power production by 2025, although China and India continue to build new coal-fired plants.

Farm-to-Table Exposed

Farm-to-table restaurants, which promise diners locally sourced, organic foods, have swept the country and risen in popularity in recent years. But the claims they make are difficult to verify, and in many cases, complete fiction.

The Tampa Bay Times published an investigative article on Wednesday, reported and written by its food critic Laura Reiley, exposing false or inaccurate claims made by Tampa restaurants about the sources of their food.

Reiley combed through hundreds of menus from Tampa Bay area restaurants, identified those that made specific claims about their food, and then investigated those claims by visiting farms, speaking with distributors and having some food genetically tested.

One particular restaurant, which used the tagline ‘Death to Pretenders’, serves an appetizer called “F**K Monsanto Salad”, referring to the company criticized for selling genetically modified foods. However, the suppliers of the produce used in the salad says it could not be labeled as non-GMO or local. The menu also claimed the fish was caught fresh from Florida, but the shrimp were found to be farm-raised in India. Reiley found multiple restaurants guilty of similar mistruths, and confronted restaurant owners, some of whom changed their menus and chalkboards as a result.

This Week’s Top Headlines

US corporations have $1.4tn hidden in tax havens, claims Oxfam report – Rob Davies, The Guardian

BP shareholders reject chief Bob Dudley’s £14m pay deal – BBC

Brazilians Hope an End to Political Crisis Will Improve Battered Economy – Raymond Colitt, David Biller, Bloomberg News

Bank of America hit by weak trading, provisions for energy loans – Richa Naidu, Nikhil Subba, Reuters

Facebook Launches Research Lab, Hires Google Executive to Helm It – Deepa Seetharaman, Jack Nicas, The Wall Street Journal

Fight for $15 protesters across US demand living wage in day of action – Jana Kasperkevic, The Guardian

Regulators Warn 5 Top Banks They Are Still Too Big to Fail – Nathaniel Popper, Peter Eavis, The New York Times

Mortgage rates hit lows not seen in nearly three years – Kathy Orton, The Washington Post

Wells Fargo Q1 income falls 6% on credit loss reserves, sees higher deposits – Roger Yu, USA Today

36,000 Verizon workers go on strike – David Goldman, Aaron Smith, CNN Money

This entry was posted on Friday, April 15th, 2016 at 1:44 pm. It is filed under Week in Review. You can follow any responses to this entry through the RSS 2.0 feed.