In the days following 9-11, New Yorkers rallied around their policemen, firefighters, and emergency medical responders. People would break into wild applause when they saw a patrol car, a firetruck, or an ambulance heading south to Ground Zero. Restaurants took great pride providing the workers with free food and drink.
Another hero was former New York Stock Exchange CEO Dick Grasso. In those days the NYSE was a symbol of American capitalistic might and Grasso was hailed for his leadership getting the exchange up and running four days after the terrorist attack. The reopening of the NYSE gave the nation a major psychological boost. America was back in business.
But the hero worship was short lived. Ten thousand Ground Zero first responders became debilitated with cancer and other illnesses stemming from their rescue efforts. More than 2,000 died. Many were financially ruined by their disabilities and medical bills. Were it not for the efforts of comedian Jon Stewart, Congress possibly wouldn’t have continued funding the September 11 victim compensation fund.
As for Grasso, former New York attorney general Eliot Spitzer a few years later forced Grasso out of his job with bogus charges alleging he was overpaid. Grasso was vindicated in court and history shows he was woefully underpaid. The NYSE declined the moment he left the building; today it is little more than a blinking black box gathering dust in an office park. Even on Wall Street most people can’t name the head of the exchange. Grasso was a near household name.
(Full Disclosure: I represented Grasso during his legal battle with Spitzer, a client association I’m forever proud.)
I think about the 9-11 first responders every time I hear a politician, celebrity, or other public figures trumpeting health care, warehouse, and grocery store workers as “heroes.” The Thunderbirds and Blue Angels flyovers are wonderful gestures, and health care workers say they appreciate the nightly nationwide tributes. But as a Michigan emergency nurse recently told me, “Yeah, everybody keeps telling me I’m a hero. In a few weeks this will pass, and patients will again start calling me a bitch.”
Appreciation for the frontline Covid-19 workers has already expired for some. The 19-year-old daughter of my friend in Michigan is putting herself through school working at the local Kroger. While servicing the meat counter, someone recently came in about 10 minutes before the 9 pm closing and demanded three pounds of different meats. The daughter explained that Michigan law required the store to close right at 9 and therefore she had only enough time to cut one meat type.
The customer went into a rage and complained to her manager. Such is the thanks for risking one’s life for $13 an hour. Kroger early last month reported that four of its Michigan workers had already died from the coronavirus.
The job security is bleak for the Covid-19 heroes. Hospitals are aggressively laying off health care workers, including those who worked on Covid-19 patients. Robots and drones are going to replace most warehouse workers and self-checkout kiosks are fast replacing supermarket cashiers. When the Covid crisis passes, these people will be forgotten, just as New Yorkers forgot their 9-11 first responders.
If you’re interested in showing meaningful support for Covid-19 workers, write to your Congressperson and advocate for these initiatives:
Revoke Hospital Nonprofit Status
Hospitals have been getting a free tax ride for years pretending they are “nonprofit” corporations. But as residents in Wayne, Michigan learned, Beaumont Health, the “nonprofit” company that owns their city’s hospital, isn’t driven by altruism.
In the midst of the pandemic, Beaumont closed its Wayne regional trauma center and designated Covid-19 hospital because of insufficient business. The company dumped remaining patients, some on ventilators, on other area hospitals. Beaumont used an adjacent laundry facility to stash about 50 dead bodies.
Beaumont has laid off nearly 2,500 workers. Its CEO, John Fox, is among the loudest hospital administrators singing the financial blues and calling for bailout money because Beaumont’s lucrative elective surgery business is disrupted. That’s going to adversely impact his nearly $6 million annual compensation.
Open the Books, an advocacy group, has exposed the hospital nonprofit farce. According to its 2019 study of the 82 biggest nonprofit hospitals, their combined net assets increased 24 percent to $203.1 billion from a year earlier. Top executives at four nonprofits earned between $10 and $18 million a year, while the CEO of Banner Health earned $21.6 million.
Hospitals should be required to file a timely annual report documenting activities demonstrating they are truly nonprofits or be taxed as regular corporations. The tax proceeds should be used to fund retraining programs for healthcare workers.
Bill Gates’ Robot Tax
Microsoft founder Bill Gates proposed in 2017 that Congress impose taxes on companies that replace workers with robots. With unemployment expected to surge to record highs this idea has taken on more urgency. According to a 2018 Wall Street Journal story, Amazon was expected to have the capability to replace virtually all its warehouse workers with robots by 2023.
Amazon is profiting mightily from the Covid crisis, though the company is claiming that PPE and other costs hampered financial returns. Amazon has a leg on its competitors because in 2012 it bought a robotics company serving the entire retail industry and kept the engineering and products to itself. Amazon doesn’t pay federal taxes and its robotics edge gives it another competitive advantage. It’s time that Congress derailed Jeff Bezos’s tax-free gravy train.
Hamstringing Private Equity
Private equity has long been a cancer on America. The industry has been responsible for decimating businesses and jobs, minting billionaires who took virtually no personal risk. In the retail industry alone, private equity has destroyed more than a dozen once prominent companies and eliminated some 1.3 million jobs.
An economic downturn is fertile ground for PE firms. They can buy and finance ailing companies on the cheap and squeeze out the little blood they have left. This Vox story explains the rapacious PE business.
Private equity executives enjoy an obscene tax advantage. Despite profiting handsomely destroying businesses, they enjoy a tax loophole called carried interest provision. This allows fund profits to be taxed at modest capital gain rates instead of ordinary income. President Trump pledged to end this loophole when he ran for president, but never followed through.
Ending the PE industry’s tax advantages should be a political no-brainer given the current climate. Other measures also need to be considered to keep these vultures at bay. Otherwise, the industry will deal to America what could prove to be a fatal blow.
The outlined initiatives could save health care and retail jobs or at least provide funds for retraining. It’s great to herald Covid-19 workers as heroes, but talk is cheap and won’t ensure food on their tables as the economic downturn unfolds.
If you really want to show support, an email or letter to your Congressperson will make a lot more meaningful noise than simply clapping on the street.