Starbucks to raise average pay up to $17 an hour as it faces a labor ...

All Starbucks hourly pay workers will make at least $15 an hour and average $17 an hour in summer.

Starbucks said barista hourly rates will range based on market and tenure from $15 to $23 per hour.

Starting in January 2022, employees with two or more years of service could receive up to a 5% raise

Facing twin pressures of a union challenge and a labor shortage, Starbucks announced Wednesday it is hiking wages for U.S. employees.

All hourly pay workers will make at least $15 an hour and average nearly $17 an hour in summer 2022. Some of the pay increases will start before the summer, the Seattle-based coffee giant said.

Starting in late January 2022, employees with two or more years of service could receive up to a 5% raise and those with five or more years could receive up to a 10% raise, Starbucks said.

Including wage and benefit increases throughout the pandemic, the company estimates the increases total "approximately $1 billion in incremental investments in annual wages and benefits over the last two years."

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Starbucks said barista hourly rates will range based on market and tenure from $15 to $23 per hour across the country in summer.

The wage hike comes as Starbucks fends off a unionization effort in New York. None of its corporate-owned shops in the U.S. are unionized. In August, Starbucks workers from three Buffalo, New York locations petitioned the National Labor Relations Board for a vote on whether to unionize.

The company is seeking to persuade the labor board to require that workers at all 20 Buffalo-area stores take part in the election instead of allowing stores to vote individually, the New York Times reported.

Amazon workers in New York also are trying to unionize. The organizing drives are happening during a moment of reckoning across corporate America as the pandemic and ensuing labor shortage has given employees more leverage to fight for better working conditions and pay.

Workers have staged strikes at Kellogg’s U.S. cereal plants as well as at Deere & Co., Frito-Lay and Nabisco facilities nationwide.

About 4.3 million Americans quit their jobs in August, the Labor Department said last week, the most on records dating back more than two decades.

Many large corporations criticized for underpaying their staff are now upping their offerings in hopes of attracting more workers. That means hourly-wage jobs are being boosted to pay levels never seen before. Walmart and Bank of America are among businesses that announced recent pay hikes.

Starbucks announced that it was investing in training, which is one of the complaints the New York workers have. The company said it is completely redesigning its "Barista Basics" guide and adding training time.

The union organizing campaign, if successful, could upend Starbucks’ labor model. Employees say chronic understaffing has long caused frustration.

Starbucks said Wednesday it has also “invested in forecasting capabilities to improve store staffing” and is testing a “shifts app” to make it easier for employees to work available shifts. Other tests include a “Cold Beverage Station in select stores around the country.”

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Contributing: Associated Press; Paul Davidson, USA TODAY

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Michigan spends $1B on charter schools but fails to hold them ...

Jennifer Dixon

DetroitFreePress

Michigan taxpayers pour nearly $1 billion a year into charter schools — but state laws regulating charters are among the nation’s weakest, and the state demands little accountability in how taxpayer dollars are spent and how well children are educated.

A yearlong investigation by the Detroit Free Press reveals that Michigan’s lax oversight has enabled a range of abuses in a system now responsible for more than 140,000 Michigan children. That figure is growing as more parents try charter schools as an alternative to traditional districts.

In reviewing two decades of charter school records, the Free Press found:

Wasteful spending and double-dipping. Board members, school founders and employees steering lucrative deals to themselves or insiders. Schools allowed to operate for years despite poor academic records. No state standards for who operates charter schools or how to oversee them.

And a record number of charter schools run by for-profit companies that rake in taxpayer money and refuse to detail how they spend it, saying they’re private and not subject to disclosure laws. Michigan leads the nation in schools run by for-profits.

“People should get a fair return on their investment,” said former state schools Superintendent Tom Watkins, a longtime charter advocate who has argued for higher standards for all schools. “But it has to come after the bottom line of meeting the educational needs of the children. And in a number of cases, people are making a boatload of money, and the kids aren’t getting educated.”

According to the Free Press’ review, 38% of charter schools that received state academic rankings during the 2012-13 school year fell below the 25th percentile, meaning at least 75% of all schools in the state performed better. Only 23% of traditional public schools fell below the 25th percentile.

Advocates argue that charter schools have a much higher percentage of children in poverty compared with traditional schools. But traditional schools, on average, perform slightly better on standardized tests even when poverty levels are taken into account.

In late 2011, Michigan lawmakers removed limits on how many charters can operate here —opening the door to a slew of new management companies. In 2013-14, the state had 296 charters operating some 370 schools — in 61% of them, charter boards have enlisted a full-service, for-profit management company. Another 17% rely on for-profits for other services, mostly staffing and human resources, according to Free Press research.

Michigan far exceeds states like Florida, Ohio and Missouri, where only about one-third of charters were run by a full-service, for-profit management company in 2011-12, according to research by Western Michigan University professor Gary Miron, who has studied charters extensively.

While the Free Press found disclosure issues with both for-profit and nonprofit companies, the state’s failure to insist on more financial transparency by for-profits — teacher salaries, executive compensation, vendor payments and more — is particularly troubling to charter critics because the for-profit companies receive the bulk of the money that goes to charter schools. In some cases, even charter school board members don’t get detailed information.

Without that, experts say there is no way to determine if a school is getting the most for its money.

“There needs to be a lot of transparency ... so that the board knows the company isn’t double-dipping, triple-dipping,” said Greg Richmond, president and CEO of the Chicago-based National Association of Charter School Authorizers.

Charter defenders dismiss criticism that charters are not transparent enough and say the schools provide an excellent education. Indeed, the Free Press found innovative and high-performing charter schools. Out of 214 charter schools ranked in 2012-13 by the state, 27 were in the top 25% of all schools in Michigan.

“They have contributed very positively to the education system in Michigan, and they’ll continue to,” said Dan Quisenberry, president of the Michigan Association of Public School Academies, a charter advocacy organization. Charter board members “swear an oath of office, just like every other public official, and they’re highly accountable to parents for academic outcomes and fiscal outcomes.”

But critics have another view. Miron said Michigan charter schools have become “a private system of education without public oversight.”

Often no consequences for poor performance

Michigan’s laws are either nonexistent or so lenient that there are often no consequences for abuses or poor academics. Taxpayers and parents are left clueless about how charter schools spend the public’s money, and lawmakers have resisted measures to close schools down for poor academic performance year after year.

The Free Press found that questionable decisions, excessive spending and misuse of taxpayer dollars run the gamut:

■ A Sault Ste. Marie charter school board gave its administrator a severance package worth $520,000 in taxpayer money.

■ A Bedford Township charter school spent more than $1 million on swampland.

■ A mostly online charter school in Charlotte spent $263,000 on a Dale Carnegie confidence-building class, $100,000 more than it spent on laptops and iPads.

■ Two board members who challenged their Romulus school’s management company over finances and transparency were ousted when the length of their terms was summarily reduced by Grand Valley State University.

■ National Heritage Academies, the state’s largest for-profit school management company, charges 14 of its Michigan schools $1 million or more in rent — which many real estate experts say is excessive.

■ A charter school in Pittsfield Township gave jobs and millions of dollars in business to multiple members of the founder’s family.

■ Charter authorizers have allowed management companies to open multiple schools without a proven track record of success.

Michigan’s first charter schools opened in 1994, based on a simple formula that exists to this day:

The boards of school districts, community colleges and state public universities can charter, or authorize, a school. Michigan gives charter schools an amount equal to or slightly less than the school district in which they are located. Authorizers can keep as much as 3% for oversight. The rest goes to the school. And individual school boards are responsible for running the school.

But many school boards let management companies handle the money and make the decisions. That’s reality, regardless of what charter enthusiasts anticipated when the first schools opened. And thestate exercises little control over whether a charter school is well run and high-performing, or not. Oversight is a patchwork with 40 authorizers.

“Michigan has one of the least restrictive environments for charter schools in the entire nation,” said Casandra Ulbrich, vice president of the state Board of Education, which sets education policy and advises lawmakers.

“We basically opened the door to all types of different charter schools, most of which are run by for-profit management companies, and it’s led to a lot of issues, primarily ... financial oversight and transparency.”

Charter schools have been controversial from the start. The Michigan Legislature passed the state’s charter law in 1993, a key piece of then-Republican Gov. John Engler’s education reforms. Legal challenges quickly followed.

William Collette, an Ingham County circuit court judge, ruled the law unconstitutional in 1994. In a recent interview, he said he was concerned that the state had lost its power to make sure charter schools “were not violating the principal of separation of church and state, and not teaching ideology.”

“There was very little oversight, or any way of tracking the way charter schools were going to use the funding” from the state, Collette said.

A Court of Appeals panel upheld Collette’s ruling, but the Michigan Supreme Court overturned it in 1997.

State law sets no qualifications for charter applicants

In Michigan, anyone and everyone can apply to open a charter school. There are no state guidelines for screening applicants.

And in many cases, authorizers have given additional charters to schools managed by companies that haven’t demonstrated academic success with their existing schools.

Central Michigan University, for example, gave two additional charters to schools managed by the for-profit Hanley-Harper Group Inc. in Harper Woods, before its first school had any state ranking and despite test scores that showed it below statewide proficiency rates in reading and math. The school’s first ranking, released last year, put it in the 14th percentile, meaning that 86% of schools in Michigan did better academically.

“We have a product, yes, we are trying to sell and constantly working to make ... better and better and better,” company founder Beata Chochla, who has run several small businesses, including janitorial and home health care, told the Free Press in an interview.

Ferris State University has authorized a fourth Hanley-Harper school, expected to open this fall in Oak Park.

“We were convinced they had a good plan,” Ferris State’s interim charter schools director Ronald Rizzo said, adding that critics who believe an operator should have a successful academic track record before adding schools are “welcome” to their views.

Authorizers also have been slow to close poor performers. Among the oldest and poorest performing schools in metro Detroit:

■ Hope Academy, founded in Detroit in 1998, ranked almost rock-bottom — in the first percentile — in 2012-13.

■ Commonwealth Community Development Academy, founded in Detroit in 1996, ranked in the third percentile.

Both schools are authorized by Eastern Michigan University, which said in a statement that it is not satisfied with either. Yet just last year, EMU renewed Hope Academy’s charter.

“That’s a shocker,” Western Michigan’s Miron said. “It just shows that our system is broken.”

No guidelines for when a charter should be revoked

Michigan law provides no statewide standards for how the boards of school districts, community colleges and public universities that authorize charter schools should monitor a charter’s performance, or when a charter should be revoked. Michigan has 40 authorizers — from rural districts with one charter to Central Michigan University with 64 — and, as a result, standards and oversight are inconsistent.

Minnesota, by comparison, has clear performance standards for its authorizers and requires them to apply to the state Department of Education for approval to grant school charters. Minnesota law also requires a review of an authorizer’s performance at least every five years, including an analysis of the academic, operational and financial performance of its schools.

The Minnesota reviews begin in 2015 and will determine whether authorizers are meeting state requirements. Under the state’s current system, authorizers deemed less than satisfactory would be prohibited from adding charters or expanding existing ones.

Michigan law does allow the state superintendent of education to stop an authorizer from opening new schools. But there’s a loophole: The authorizer can keep existing schools, and those schools can open new campuses. The Michigan Department of Education has never prohibited an authorizer from opening new charters and says it needs the Legislature to write specific guidelines for when it can act, or let MDE write those rules.

Taxpayer money can be hidden from public view

Management companies insist — without much challenge from the state — that taxpayer money they receive to run a school, hire staff and pay suppliers is private, not subject to public disclosure.

Quisenberry, the president of the Michigan charter schools association, said school expenditures are “appropriately public” while “things that would be related to the company itself and its internal operations are appropriately private.”

Greg Lambert, an NHA representative, spelled out the company’s position to the board of the Detroit Enterprise Academy in 2010 when several members were demanding more transparency.

“Mr. Lambert stated that the public dollars became private when they were received by NHA. He further indicated that because NHA is a private company, the information need not be disclosed,” according to minutes of the meeting. Lambert has since retired.

In practice, it is difficult to know how charter management companies are spending money except in broad categories. They typically don’t disclose total employee compensation or salaries of those making more than $100,000, despite a state law saying all school districts — which include charters — must post that on their websites. Detailed budgets are difficult to find. And unlike traditional school districts, the management companies usually don’t disclose their vendors, contracts and competitive bid documents. The schools don’t have to disclose management fees.

“We’re having a big debate over whether we’re putting enough money into public education,” said John Austin, president of the state Board of Education. “But with many schools, we don’t know where the money we’re spending now is going, who’s getting rich, and at what price to the taxpayer.

“And worst, we’re not seeing good educational outcomes.”

Mixed results academically, less spending in the classroom

Charter schools in general spend more on administration and less in the classroom than traditional districts.

A Free Press analysis based on 2012-13 data found traditional schools spend an average of $6,985 per student in the classroom, and charter schools spend $4,893. At traditional schools, administration costs an average of $1,090 per student, compared with $1,894 in charter schools.

Unlike traditional districts, charter schools cannot seek millages to pay for buildings; they must pay for their campuses out of state per-pupil funding. But some school boards have not shopped around for the best deal and pay above fair-market value for their facilities, particularly if they rent from their management company.

Charters also haven’t met the expectation that they would raise achievement in schools with high poverty, a barometer of student performance and a factor in school rankings. The isolated success of some charter schools — like some traditional schools — serves to heighten frustration among educators that more far-reaching progress hasn’t been made.

The Detroit Edison Public School Academy, a charter school on the city’s east side, is outpacing most Detroit schools — and state proficiency rates — on standardized tests. It ranks in the 77th percentile. Yet it remains an exception.

“The theory of charters was if you remove elected school boards, a centralized bureaucracy and powerful unions, that you would get better student achievement. The evidence so far, in Michigan and around the country, is ... some charters work and some don’t,” said Lou Glazer, president of Michigan Future Inc., a think tank that financially supports nine schools in Detroit, including eight charter schools

“On average, if there are gains, they’re marginal at best.”

Loopholes in Michigan law allow insider deals and nepotism

Neither the state nor school authorizers have been aggressive in policing charter schools for sweetheart dealings and nepotism.

State law prohibits board members from serving if relatives work for the school, or if they have an ownership interest in, or significant role with, its management company.

But those management companies are free to hire friends of board members or school founders. And charter boards are free to give contracts to friends and relatives of school officials. That can create multiple conflicts of interest — and raise questions about whether decisions are made in the best interests of the school.

Downriver, two charters doled out millions of dollars’ worth of business to relatives of the schools’ administrator. At a charter school in Pittsfield Township, multiple members of the founder’s family were school vendors or employees. And schools in Ecorse and Southfield bought property at inflated prices from companies whose owners included the president of their management company.

The examples of self-dealing through the system are “outrageous and unfortunately far too common,” said Miron of Western Michigan, which does not authorize charter schools.

Authorizers, management companies work closely — too closely?

The proliferation of schools run by management companies in Michigan also has brought with it cozy relationships between the companies and their schools’ authorizers.

Many companies approach authorizers directly to open new schools — and at least one authorizing official, Grand Valley State University’s Tim Wood, said he actively recruits national management companies, both for-profit and nonprofit.

Both authorizers and management companies often have a hand in recruiting board members, who critics say can’t be truly independent.

Richmond, of the National Association of Charter School Authorizers, said authorizers should not approve schools with boards chosen by the management company because these board members tend to “act like employees of the management company doing what the boss tells them.”

“If you have an independent board, and authorizers should make sure they do, that board should be appropriately requiring a fair amount of transparency about how this money is spent — enough transparency to make sure they, the board, are not being double-charged for expenses.”

Michigan authorizers say they don’t get involved in that level of detail because boards by law have primary responsibility for negotiating leases, management agreements, budgets and other financial information pertaining to day-to-day operations.

But with boards that leave decision-making up to management companies, the question becomes: Who’s monitoring how taxpayer money is spent?

Said Cindy Schumacher, who oversees Central Michigan University’s charter schools office: “We don’t really have a relationship with the management companies. It’s up to the boards to determine what the structure is.”

Richmond, whose organization is pro charter, said even if a charter school does deliver academic excellence, that’s no excuse if taxpayers are gouged.

“I can’t think of any other area of public or private enterprise that would agree to be ripped off by someone as long as they were providing a nice product.”

Austin, the state board president, said too many authorizers are facilitating “management company-created schools ... companies running schools making lots of money and delivering very poor and mediocre education, which is the business that they are in. And that’s not the business we should be in terms of education policy in Michigan.”

He said the state board has tried to “insist on transparency,” but the Legislature has resisted. Lawmakers also have opposed prohibiting management companies with poor academic track records from opening new schools.

“We should not let more bad schools to be created,” Austin said, “when we have enough challenges improving education in all our schools.”

What’s there to hide, anyway? Critics call for open records

State Superintendent Mike Flanagan, who runs the Michigan Department of Education and chairs the state Board of Education, said Michigan’s Legislature must insist on more transparency.

But Miron said the trend in Michigan and nationwide seems to be toward less transparency — such as the types of management agreements negotiated by National Heritage Academies.

The company takes 95% or more of the per-pupil taxpayer funding that its schools receive from the state, with 3% going to the authorizer and 2% or $35,000, whichever is less, given to the school board to spend at its discretion. NHA pays the bills and keeps whatever is left as profit.

NHA and its supporters say their agreements are no different than contracts given by a traditional school district to a private company to provide maintenance or transportation. They say that vendor is not required to reveal how much it pays its janitors or bus drivers, or other details of its spending.

“I think it’s a fair analogy, because the school is hiring NHA to do an educational service,” said Grand Valley’s Wood.

But there’s a big difference, say many other experts: The traditional school district that hires a janitorial company isn’t handing over almost all of its state funding to a private company.

Richmond said authorizers should ensure that a management contract spells out precisely what services the company will provide and its compensation, including fees and bonuses. Such disclosures are among the national charter association’s best practices.

Said Flanagan: “If everyone is doing the right thing, they shouldn’t have a problem with being open.”

Nashville Mayor David Briley teases $1B budget for Metro schools

Mayor David Briley teased a budget for Metro Nashville Public Schools that could potentially exceed $1 billion while also alluding to the strings that would come attached to additional funding from the city.

Briley dropped a flashy commitment Tuesday during his annual budget talks with the district that for the first time, school funding would cross the billion dollar threshold for the next fiscal year.

"This year’s budget that I will present to the Metro Council will for the first time exceed a billion dollars that our city is spending on public education," he said. "It will also be the first time that 70 percent of those funds are local."

The mayor provided few details in his initial address of his budget for Metro schools but it is the largest ever local expenditure on public education.

But to be clear, that figure would cover capital expenditures and estimated debt payments on top of operating costs. Last year's budget for Metro schools was $987 million, including debt service.

"The final budget recommendation is yet to be determined, so it limits the amount of detail we can get into," Briley spokesperson Thomas Mulgrew said.

In her third day at the district's helm, MNPS Interim Superintendent Adrienne Battle presented a proposed a $963 million operating budget for the upcoming fiscal year, a $76.7 million increase over last year.

The budget proposal put forth by the district represents a list of needs that Nashville schools "crave," according to Battle.

“I believe the mayor has a commitment to support us in our ask and doing what’s best of our teachers,” Battle said after the meeting. “He communicated his priority around support our Metro public schools. Given that commitment, I believe he will put his best effort forward.”

The budget prioritizes a salary step increase and a 10 percent cost-of-living raise for employees. The total cost of employee compensation increases will total $54 million.

In last year's budget crunch, Briley proposed only $5 million in new funding for Metro schools, which asked for a $44.7 million increase. He also withheld the cost-of-living pay bump.

The district was forced to find $15 million in cuts to meet its annual fiscal obligations, including a required increase in funding for charter schools.

Briley's announcement Tuesday was a surprise as many took previous years as an indication that it would be unlikely that the city would fund a dramatic increase.

He also took further steps in throwing his support behind Battle, who he endorsed to replace former Director Shawn Joseph.

“I frankly hope that Dr. Battle is the director for a long time," he said, possibly suggesting a push for her permanent place as the schools' chief.

"I think she should be given a chance to do that. I think we need to find a way to build support around her and I think this city is ready to refocus on public education, to get past some of the discord we have had in recent past, because it is my belief that regardless where been in last few months on this issue, folks want to see the schools in our city succeed," he said.

Salary increase for MNPS employees

The mayor pressed Vice Chair Christiane Buggs on Tuesday about how the district came to the 10 percent increase figure for raises for teachers and staff.

"That's easy," she said. "They asked for it."

But Briley pushed back and said his administration and the school board will have to talk about increases by looking at objective data and "concrete research."

"I don't know if 10 percent is enough. I don't know if it's too much," he said. "To be frank, I would say I would commit over a longer term to more than 10 percent. I think that's probably what we ought to include in the context of some sort of memorandum of understanding between myself and you."

Tuesday was the first time Briley has hinted at aspects of a deal he said several weeks ago would have to be in place between him and the district, in order for the schools to get new funding.

He vowed he would take a leading role in the future direction of the city’s schools after a tumultuous year between Joseph and a split school board.

Mulgrew told The Tennessean details of the agreement are still being worked out and will be presented in the coming weeks.

A call for Briley to fund the budget proposal

The school board has continually said its $963 million budget proposal presents the needs of the district, including funding priorities such as employee pay and social-emotional work. Teachers have rallied outside of schools for increased pay and more money for schools.

And parents, teachers and community leaders rallied in support of the proposal, filling the room on Wednesday in support of the budget.

After the budget hearing, the groups held a news conference after the hearing. And the consensus was unanimous: For Briley and the Metro Council to fully fund the budget.

Michael Epps Utley, a parent with Fund MNPS, said the district has struggled for years to meet the needs of students due to underfunding.

“Our students are feeling the results of underfunding right now, today. Those are people we lose. And when we lose them, it’s our fault, not theirs - they are children,” he said.“They are our city’s customers. We have to serve them better.”

Teachers are having difficulty living in the city, said Erick Huth, Metro Nashville Education Association president. And supplies and textbooks have deteriorated, he said.

The district is asking for $2.7 million for new textbooks.

“The funding for our city services and for our schools has been dismal,” Huth said. “Nashville schools suffers from one of the worst textbook collections we have ever had.”

Brad Rayson, Service Employees International Union Local 205, said other employees are suffering, as well, and that is a disgrace. The district has at least 1,000 employees that work for less than $15 dollars an hour, requiring them to work two or three jobs, he said.

“Our schools have been underfunded for too long and it is time that changed,” Rayson said.

And Nashville Organized for Action and Hope member Dawana Wade, with Salama Urban Ministries, said the district needs to meet the social and emotional needs of students.

For years the district has had to put together meager resources for social-emotional learning, she said. The district wants $1.4 million more to meet the social-emotional needs of students.

“The time has come to effectively fund these efforts to meet the need of our students,” Wade said. “Our firm expectation is this mayor and this Metro Council fully fund the budget as proposed.”

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Bank of America is giving workers $1 billion of stock | CNN Business

New York CNN Business —

Bank of America is handing out $1 billion worth of restricted stock to virtually its entire workforce as the bank seeks to gain an upper hand in the war for talent.

In a memo shared exclusively with CNN, Bank of America CEO Brian Moynihan said Tuesday the company is for the first time opening up its stock awards program to lower-level employees who make up to $100,000 a year. In the past, those employees received a one-time cash bonus.

Bank of America (BAC) said each eligible employee will receive between 65 and 600 restricted stock units, corresponding with their compensation. Those units will vest over four years beginning in 2023.

At a minimum, that means frontline workers like bank tellers will receive restricted shares that are valued, on paper, at about $2,900 based on Bank of America’s current share price of $45.

At the upper end, higher-salary employees would get restricted shares valued at around $27,000.

Bank of America said the estimated value of the stock awards is “multiple times higher” than the cash bonuses the bank handed out in the past. Last year, Bank of America gave $750 cash bonuses to lower-paid employees.

Bank of America said the stock awards – which are on top of compensation received as part of the bank’s annual review process – are going out to roughly 97% of its global employee base, but not to those who make above $500,000 a year.

“That level of distribution is incredibly high,” said Brian Kropp, chief of HR research at Gartner. “The fact they are pushing out that kind of award across the workforce is rare.”

Bank of America said that only a small portion of its workforce, mostly part-time employees and workers in certain overseas locations, will receive a cash award, totaling $750 apiece.

In the past, Bank of America relied more on cash bonuses for lower-compensated employees. The decision to expand the pool of workers getting restricted stock that vests over time, is no coincidence. Bank of America is betting some employees won’t want to quit if that means leaving thousands of dollars of stock on the table.

Companies, including banks, are grappling with high levels of worker turnover. A record 4.5 million Americans quit their jobs in November, according to government statistics.

“We are in the middle of this Great Resignation,” said Kropp. “Restricted stock creates a long-term retention hook rather than just a cash bonus.”

Bank of America acknowledged the stock awards, along with raising pay for minimum wage workers, are designed to attract and retain talent. The bank also cited its financial performance, highlighted by a record annual profit of $32 billion.

AT&T, Boeing, others promise bonuses, pay raises once tax bill signed

Some of the cash windfall from corporate tax cuts is already trickling down to Main Street workers.

A handful of U.S. companies are already promising to pay one-time bonuses to their employees and bump up hourly pay if President Trump signs into law the tax reform bill that has been voted on by the Republican-led Congress.

More:Trump declares victory as tax bill passes: 'It's always a lot of fun when you win'

More:The new tax plan will make Trump’s family richer, experts say. Here’s how.

More:Tax refund schedule for 2018: When can you expect your money?

AT&T was the first company to go public with its plans to pass along coming tax savings to workers, saying once the tax bill is passed it would pay a special $1,000 bonus to more than 200,000 of its non-management workers. Front-line managers, the company said, will also be included in the bonus pool. The bonus could hit employees paychecks over the holidays if Trump signs the bill before Christmas, the company said in a statement. The telecom giant also confirmed it would invest $1 billion more in the U.S. in 2018.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” Randall Stephenson, AT&T chairman and CEO, said in a statement. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

Comcast announced Wednesday that it would award one-time $1,000 bonuses to more than 100,000 employees, which would include frontline and non-executive employees.

The Communication Workers of America, the union that represents many of those frontline workers, had demanded that employers guarantee the yearly $4,000 household wage increase that Republican lawmakers asserted would be the outcome of the tax cut.

Other companies, including Fifth Third Bancorp, Wells Fargo and Boeing, also announced that they would pass along tax savings to their workers.

The news is the first sign that many in the middle-class will benefit financially from their employers paying less in taxes.

The tax reform bill, which includes a big and permanent tax cut for corporations and temporary tax relief for individual taxpayers, has fostered a heated debate on Capitol Hill and on Wall Street as to whether middle-class Americans would benefit as much as big business will.

Corporate announcements in addition to AT&T's that were rolled out Thursday that show workers will share in the benefits include:

Fifth Third Bancorp, a regional bank based in Cincinnati, said it will raise the minimum wage for all of its nearly 3,000 hourly employees to $15, and would distribute a one-time bonus of $1,000 for more than 13,500 employees by the end of the year if the bill is signed by Dec. 25.

“We want to invest in our most important asset – our people,” said Fifth Third president and CEO Greg Carmichael. The tax cut, the CEO said, provided an opportunity for the bank to "reevaluate its compensation structure and share some of those benefits with its talented and dedicated workforce."

Wells Fargo, the San Francisco bank that has been hurt by a scandal involving the opening of 3.5 million unauthorized client accounts, also said it would boost its minimum wage to $15 per hour, an 11% increase from its current hourly rate of $13.50, once the law was passed. The pay raise will go into effect in March 2018, the company said.

Aerospace giant Boeing said it would move forward with $300 million in investments as a result of the new tax law, including $100 million in employee training and education and $100 million to enhance Boeing facilities as part of its "workforce of the future" initiative.

"Each of these investments benefits Boeing's most important strength – our employees – and reflects the real-time impact and economic benefit of the reforms," Boeing CEO Dennis Muilenburg, said in a statement.

Media and cable company Comcast said it would award special $1,000 bonuses to more than 100,000 eligible employees. The company, which also owns NBCUniversal, said it also expects to spend more than $50 billion over the next five years investing in infrastructure to improve and extend broadband plant and capacity, and its television, film and theme park offerings.

"With these investments, we expect to add thousands of new direct and indirect jobs," the company said in a media release.

United Auto Workers union calls national strike against GM

DETROIT – The United Automobile Workers on Sunday morning called a nationwide strike against General Motors, set to start at midnight.

It's the first national UAW strike since 2007, coming against the backdrop of a federal corruption investigation that has implicated union President Gary Jones and his predecessor, Dennis Williams.

The action does not include Ford and Fiat Chrysler Automobiles, whose UAW contracts were extended while the union tries to negotiate a deal with GM that would be template for talks with the other two companies. The union let the GM contract expire at midnight Saturday, but told autoworkers with Sunday shifts to report.

The union represents about 46,000 GM autoworkers at 55 facilities in the United States. No talks were known to be scheduled.

A prolonged strike against GM could be painful for both sides, said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor.

UAW contract with GM expires:Union says 'significant differences' remain

Shutting down North American production costs GM about $400 million a day, said Dziczek. It’s also a big sacrifice for UAW workers, who get only $250 a week in strike wages, she noted. The union had $721 million in its strike fund in 2018 and temporarily increased dues in March this year to boost it to $850 million.

GM has 90-100 days of inventory for most of the vehicles that are in high demand, Dziczek said. Consumers might find it harder to get certain colors or trims after a couple of weeks, but dealers trade with each other and that will help.

“GM has enough inventory for a short strike of one or two weeks. After that it starts to get painful,” Dziczek said.

The strike announcement follows a meeting Sunday morning of GM union local presidents from around the country, gathering in a Marriott hotel in the same building as GM's Detroit headquarters.The UAW said the nearly 175 union local leaders on the National Council voted unanimously to strike.

“We are standing up for our members and for the fundamental rights of working-class people of this nation,” said Terry Dittes, the union's GM department vice president. “Going into the bargaining season, our members have been very clear of what they will and will not accept in this contract.”

When GM face bankruptcy 10 years ago, Dittes said, ”Our membership and the American taxpayer stood up and made the hard choices and sacrifices for this company.”

He said the union members have continued to build quality products that have led to big GM profits, so it is time for GM to step up.

GM contract offer

GM said its offer to the UAW included more than $7 billion in U.S. investments over the four-year life of a new deal, more than 5,400 jobs, higher pay and what the company said would be improved benefits.

“We presented a strong offer that improves wages, benefits and grows U.S. jobs in substantive ways and it is disappointing that the UAW leadership has chosen to strike at midnight tonight," the company said. "We have negotiated in good faith and with a sense of urgency. Our goal remains to build a strong future for our employees and our business.”

The company said it offered improved profit sharing; what it called "solutions for unallocated assembly plants in Michigan and Ohio"; a ratification payment of $8,000 and enabling the union to "retain nationally leading health care benefits."

"Unallocated assembly plants" refers to GM's decision announced last fall that it would indefinitely idle four of its U.S. plants. The UAW vowed to leave no stone unturned in fighting to get new vehicles to build in those plants, which include Lordstown Assembly in Ohio, Detroit-Hamtramck and transmission plants in Warren and Baltimore.

Health care is a key point in the talks. GM and Ford each spend more than $1 billion a year on health coverage. The average UAW worker pays about 3% of his or her health care costs compared with 28% paid by the average U.S. worker, research by the Ann Arbor-based Center for Automotive Research shows.

Corruption probe hits UAW:Federal corruption investigation involves UAW president, former president

Autoworkers argue that their jobs are physically taxing and lead to chronic injury early in life, so the health coverage is essential.

Dziczek said what GM disclosed about its offer leaves questions.

GM’s description of its offer did not reference a path to making temporary workers permanent or closing the in-progression gap for workers hired at a lower wage after 2007. “Those are some pretty significant issues,” Dziczek said.

Harley Shaiken, a labor scholar at the University of California, Berkley, said a national strike makes the point that the UAW is serious about unresolved issues and it puts “the ball in GM’s court” to resolve it. But GM’s move to outline what it’s offered the UAW is unprecedented, Shaiken said.

“GM is making a highly risky moving by putting out a statement that detailed,” Shaiken said. “It means they are going to the UAW members rather than discussing it with the leadership.”

In its statement, GM said it has proposed an introduction of new electric trucks and the creation of the first “union represented battery cell manufacturing site” in the United States.

“If GM is able to put electric trucks in Detroit-Hamtramck and a new battery facility in Lordstown, why not discuss that with the UAW last November when the unallocation statement came out?” Shaiken asked.

Dziczek said GM has a broader audience than just the UAW. It now stretches to the public, GM's investors and even the president, who has been critical of the company over the factory cuts and its footprint in China, and who promised to boost auto jobs.

GM profit

UAW National Bargaining Committee Chairman Ted Krumm said, “Today I represent tens of thousands of UAW members who are sacrificing their comfort and future to stand up and do what’s right.

"I want to be clear about something. This strike is about us, about standing up for fair wages, for affordable quality health care and for job security. We’re standing up for our temporary employee brothers and sisters who do the same work but for less pay. These are profitable times, we worked hard to make this company profitable and we deserve a fair contract b/c we helped make this company what it is.”

Temporary workers account for about 7% of the GM workforce through the year and are paid $15 an hour, roughly half the $28-$33 per hour for a legacy worker. "In-progression" workers, who have a path to higher pay, start at about $17 an hour.

GM reported that it made $11.8 billion in pretax profits in 2018, down 8.3% from 2017. CEO Mary Barra's total compensation was $21.87 million, about 281 times as much as the median GM worker's compensation, company disclosures showed.

Janitor strike

UAW-represented janitors who work for contractor Aramark at five GM plants in Michigan and Ohio went on strike. Autoworkers crossed the janitors' picket lines at Flint Assembly on Sunday morning as they awaited word from the Detroit meeting.

As the local leaders met, a few rank-and-file workers rallied outside in front of GM's headquarters.

“I’m here to show support for all GM UAW membership,” said Frank Hammer, a retired president of Local 909 for GM’s Warren plant. “This will be a momentous decision if we want to strike, but it’s important for the industry and for contract bargaining.”

Hammer said it was “deplorable” that the UAW told GM union members to cross the picket line of Aramark-employed maintenance workers, who struck five GM sites in Michigan and Ohio at midnight Saturday. Autoworkers reported for their 7 a.m. shift Sunday at Flint Assembly, which makes Chevrolet Silverado and GMC Sierra pickups.

“The cardinal principle of our union is we don’t cross the picket line,” said Hammer. “I hope the UAW breaks the error in their policy.”

Janitor strike:UAW-represented janitors at some GM plants go on strike; impact on auto production unclear

Hammer said GM must end two-tier wage system and find a way to help temporary workers become permanent, among other things.

Daniel Rider, who works at Romulus Engine plant and was at the protest, said he was surprised to hear the UAW was calling for a strike starting Monday.

“But I’m relieved that they called it and I’m ready to walk the picket line,” said Rider.

His assigned strike time is Friday 2:30 to 6:30 p.m. he said, but he plans to be there Sunday night and Monday to support his union “brothers and sisters.”

He said UAW leaders have not given membership any indication of what is on the table or where the impasse lies. He said if GM is offering union workers added jobs and wages along with additional health care benefits as GM said it is in a media statement, Rider said, “then why are we all going on strike? That sounds like all the things we wanted. But they must be far apart on how to achieve those things.”

The UAW, which represents nearly 150,000 hourly workers at GM, Ford and Fiat Chrysler Automobiles, chose to negotiate a new contract first with GM. That deal will serve as a template for the UAW's later talks with the other two.

UAW contract talks:UAW members are preparing to live on $250 a week. Here's why

The talks are playing out against the backdrop of a federal corruption investigation now touching the highest levels of the union. Charges against regional director Vance Pearson implicated UAW President Gary Jones and immediate past President Dennis Williams in the misuse of union money.

The union negotiates a new contract with the automakers every four years. In 2015 the UAW chose to lead with FCA. If the UAW leadership believes it must strike, members at all three companies have voted to authorize one.

Ford declined comment on the strike announcement. FCA said, bargaining with UAW was expected to continue under the extension agreement signed Friday.

"Over the past 10 years, we have demonstrated our commitment to growing our U.S. manufacturing base by investing more than $14 billion, and creating nearly 30,000 production and salaried jobs to support those operations. We continue to work toward our plan of adding another 6,400 production jobs," FCA said.

The UAW's rank and file want a base wage increase. They also seek to protect benefits and to narrow the wage gap between workers hired after 2007 compared with those who've worked at GM before 2007. They also want to establish a plan for temporary employees to go permanent, among other things.

But job security is critical too, given GM's November 2018 announcement that it would idle four U.S. plants. Detroit-Hamtramck is the only one continuing to operate, but GM plans to shut it down in January. GM is restructuring, having trimmed 4,000 white-collar jobs in addition to the factories it targeted to idle, which also included Oshawa Assembly in Ontario. It anticipates a slowdown in auto sales, which set a record in 2017, and like other automakers, is investing in autonomous and electric technology, the former to capture a share of what is expected to be a hugely lucrative business and the latter largely because of Chinese and European requirements.

For its part, GM and other automakers seek to control costs amid trade and tariff uncertainties, unclear fuel economy standards and a predicted economic downturn on the horizon that could hurt sales. Health care costs are some of the highest for automakers and that also remains an issue.

Follow Jamie L. LaReau on Twitter @jlareauan

NCAA approaching $1 billion per year amid challenges by players

Mark Alesia

Indiana

Every year since 2001 — through the aftermath of the dot-com bust, the Great Recession and the economic stimulus plan — the NCAA has made more money.

Every year, it has given more to the colleges it serves. Every year, it has set aside more money for investments, amassing $627 million. Now, it's poised to top the eye-popping mark of $1 billion in annual revenue.

And it's no secret that one big event, the Division I men's basketball tournament, accounts for 80 percent to 90 percent of that success. What is less clear is how much longer the winning streak will last.

Amid the maze of numbers and legalistic jargon in a recent NCAA bond prospectus, there's an ominous-sounding section on risk.

The Indianapolis-based National Collegiate Athletic Association describes a one-year "financial recovery plan" if anything happens to the money from the basketball tournament. The recovery plan includes drawing heavily from reserve funds, budget reductions, lowering the amount of money distributed to schools and event cancellation insurance.

It sounds extreme, a worst-case precaution bond holders expect, not to be taken as a prediction of doom so much as an insurance plan against loss. But as Indianapolis prepares to begin hosting the Midwest regional semifinals Friday, it's clear the NCAA is in uncharted territory.

The association — once seen as a fearsome monolith — is now the target of increasingly aggressive attacks by high-profile lawyers with deep pockets. On Wednesday, Northwestern University football players won the first round of their effort to become a union, and the NCAA faces a bevy of lawsuits by players who want more of the economic pie.

One high-profile case is scheduled for trial June 9 and, last week, heavyweight sports antitrust lawyer Jeffrey Kessler filed a lawsuit seeking to remove all restrictions on player compensation.

"It's undeniable that the pressure cooker is building," said University of New Haven Professor Allen Sack, a member of Notre Dame's 1966 national champion football team and a longtime critic of the NCAA. "It's a different ballgame. This is not like any other time."

Said Michael McCann, a law professor and legal analyst for SI.com: "This is a transformative era for the NCAA, and at the end, the student-athlete will have a different role. There will be changes to amateurism."

And changes to amateurism could mean changing uses for all that money.

Although he disagrees that pressure is building, even NCAA President Mark Emmert recognizes he's in a battle to preserve the current model of college sports.

In an interview with The Indianapolis Star, Emmert was asked if he's apprehensive.

"I'm apprehensive in that the system right now serves 450,000 student-athletes and provides remarkable opportunities for them," Emmert said. "Should that model be blown up, yeah, it would be a significant loss for America. So, of course we want to continue to support the collegiate model of athletics and think it's worth saving. Others disagree."

And, when it comes to the NCAA's future, no city has more at stake than Indianapolis.

Sweetening the deal

As part of a decades-long strategy to use sports to spur growth, Indianapolis invested heavily in the NCAA.

It took a reported $50 million in incentives for Indianapolis to lure the NCAA from its Overland Park, Kan., headquarters in 1999. Indy and Kansas City, Mo., were the finalists.

The Lilly Foundation kicked in $10 million and private individuals, businesses and organizations raised $15 million. State and city taxpayers picked up the remaining $25 million.

At the time, a member of the Kansas City contingent was quoted as saying Indy "may be a little beyond sane in what they have done."

Indy built the NCAA a 142,000-square-foot headquarters and a 35,000-square-foot "exhibition hall/museum" called the Hall of Champions. The deal included 500 free parking spaces and "first-class landscaping."

The rent: $1 per year.

In 2010, the NCAA and the White River State Park Commission extended the headquarters lease to 2060 with three 10-year options. It included free land for the NCAA to build, with its own money, an expansion of the headquarters.

Rent remains $1 per year for the life of the agreement.

In financial documents, the NCAA listed the true 50-year market value of the rent and land, as determined by outside experts, at $44.5 million.

Taxpayers pick up the tab.

In return, the NCAA's growth has benefited the city.

Since moving to Indianapolis in 1999, the NCAA has gone from about 350 employees to about 500, virtually all of whom live and pay taxes in the area.

NCAA salaries and benefits have jumped from $20 million to $49 million.

In every five-year period until 2060, the NCAA has agreed to stage in Indianapolis the men's Final Four, the women's Final Four, pre-Final Four men's and women's basketball tournament games and the NCAA Convention.

According to an NCAA-commissioned report by professors from Indiana University's Kelley School of Business, the association's headquarters, events and meetings accounted for $161.8 million to Indiana's economy in 2012.

University of West Virginia economics Professor Brad Humphreys had no issues with the report's impact attributed to the headquarters, but he said it "vastly overstates the actual impact of the NCAA sports events."

But there are other intangible benefits.

Allison Melangton, president of the Indiana Sports Corp, calls the NCAA "a perfect fit for Indianapolis."

"They bring a lot of sports leadership to town," she said. "They're a great community partner. … The national attention we get in Indy — we have more events here because they're here — elevates our presence nationally, that we're a sports town."

Said Emmert: "Everyone who's involved in NCAA athletics knows the headquarters are here and sees Indianapolis as the epicenter of college athletics."

As the NCAA has grown, so have the benefits to its executives, including Emmert, who makes about $1.6 million a year, according to the latest public records. Those records also note that 86 NCAA employees made more than $100,000.

The NCAA uses consultants to supply salary ranges from comparable organizations, said chief financial officer Kathleen McNeely. She wouldn't name the organizations used by the NCAA but said they are for-profit and nonprofit. A compensation committee of school presidents makes the decisions.

"First of all, we have to compete in the market we're in, which is sports management," McNeely said. "We have a lot of lawyers at the NCAA. A lot of our areas are legislative areas made up of bylaw interpretations and writing bylaws. We have a lot of lawyers in our enforcement division. Our legal counsel —we have lawyers in that area."

The NCAA also relies heavily on outside lawyers who specialize in areas such as antitrust. The NCAA spent $9 million on legal expenses in 2011-12.

It needs lawyers now, perhaps more than ever.

Playing defense

In 2005, the NCAA looked in the mirror, trying to identify its weaknesses.

A risk management consultant identified four main areas of concern. All seem to apply today: federal or state legislative intervention, court decisions, reputation and lack of revenue diversification.

Lack of revenue diversification shows in the NCAA's television money. This year, CBS/Turner will pay about $700 million for the Division I men's basketball tournament.

ESPN will pay $31 million for everything else.

Last year's basketball tournament brought in $81 million of non-television money. Baseball was next at $13.5 million, followed by women's basketball at $4.4 million.

Indianapolis plays a role in helping protect the big money-maker.

In 2004, the NCAA wanted a backup site for basketball tournament games and to extend its lease in Indy. The Indianapolis Colts wanted a taxpayer-financed new stadium. The NCAA also knew that staging events in a big, new hometown stadium would save money.

In exchange for the guarantee of prime NCAA events being staged in Indy, the city extended the dollar-a-year lease and agreed to serve as a contingency site for all men's and women's NCAA tournament games.

The deal was contingent on "substantial improvements to the (old RCA) Dome and/or a new facility."

Lucas Oil Stadium opened in 2008, financed mostly by taxpayers.

The NCAA has never needed to use the contingency agreement. The original "memorandum of understanding" in 2004 is still in effect. It says the Indiana Sports Corp will "use its best efforts" with the city, the Capital Improvement Board, the Pacers and area universities "in the event of an emergency which requires the use of Indianapolis as a backup Event site."

As for the other risk areas, congressional interest in the NCAA creeps up occasionally but isn't a factor now.

Reputation is a constant battle for the NCAA, trying to show it's more than a group that prints money for three weeks every March. It runs 89 national championships, in sports such as rifle and rowing, for more than 1,100 member schools.

The bond prospectus says the NCAA returned 58 percent of its money to members in cash over five years. In 2012-13, the NCAA says it returned more than 90 percent of revenue to members in cash and services.

Legal decisions are by far the biggest current concern, with the capability of radically changing the NCAA model of college sports.

With the basketball tournament bringing in billions over several years and coaches making millions, players have become increasingly bold about fighting for a bigger cut.

Scholarships are worth tens of thousands per year. But critics note that a real education is hard to obtain while working virtually full time as an athlete for coaches whose livelihoods depend on winning.

Star players in the NCAA tournament are worth far more than their scholarships. The latest study of their true value was in The Atlantic, which estimated that the true value of freshman star Andrew Wiggins to Kansas was $575,565.

If the NCAA doesn't increase athlete benefits — Emmert says change is coming — the courts might do it instead.

The lawsuit scheduled for trial June 9 was brought by former UCLA star basketball player Ed O'Bannon, who wants athletes, not the NCAA, to control use of their name, image and likeness. That would have implications for production and sales of advertising, DVDs and video games, as well as rebroadcasts of games.

The Kessler lawsuit seeks to remove all restrictions on player compensation.

Another lawsuit also filed this month, by former West Virginia football player Shawne Alston, alleges the NCAA and major conferences illegally cap the value of scholarships at less than the actual cost of attending school.

The players seeking a union have mentioned better insurance and guaranteed multiyear scholarships instead of annual renewals. Lifetime scholarships for players to finish degrees, and get advanced degrees, also has been mentioned.

"Pay for play" is anathema to many fans — two-thirds of the public is against it, according to a recent ABC poll. But Sack, the New Haven professor, contends they've been paid for decades through scholarships.

There used to be additional "laundry money." Athletes can now tap into funds for situations such as buying a suit, traveling home for a funeral, or buying a computer. Bowl games in football, conference tournaments in basketball and the NCAA basketball tournament give players hundreds of dollars in gifts.

"Amateurism is whatever the NCAA arbitrarily decides to call it," Sack said.

McCann sees the possibility of conferences gaining more power and autonomy to define "amateurism." That would mean more benefits to players that smaller schools can't afford. McCann does not foresee the demise of the NCAA.

"I just don't think the country wants that," McCann said.

Strange marriage

It's a strange, enduring marriage, higher education and high-stakes sports. An interview with Emmert ended with a question about whether the NCAA would be around at the end of its lease in 2060.

As he often does, Emmert turned the question around on the interviewer.

"Will the Indy Star be here in 2060?" he asks.

The reporter said the company is moving to a modern new office and evolving on different news platforms, adding, "We've been here 100 years and the brand name's pretty strong."

Emmert didn't hesitate.

"I'd say the same thing for the NCAA."

Call Star reporter Mark Alesia at (317) 444-6311. Follow him on Twitter: @markalesia.

What's in the Democrats' package on climate, health care and taxes ...

CNN —

The Democrats’ budget reconciliation package, which contains several landmark climate and health care provisions, was signed into law by President Joe Biden Tuesday.

The House passed the legislation, titled the Inflation Reduction Act, Friday after being approved by the Senate on August 7 on a party-line vote.

Still, the effort remains a mere shadow of the sweeping $3.5 trillion reconciliation package that the majority party initially floated last year.

After torpedoing the inclusion of any climate or tax provisions in mid-July, West Virginia Sen. Joe Manchin, a moderate Democrat, reversed course. The measures join a handful of important but narrow provisions to lower prescription drug prices and to extend enhanced Affordable Care Act subsidies for three years.

Gone are the creation of a universal pre-K program, an extension of the enhanced child tax credit, an expansion of Medicare benefits, the establishment of a federally funded paid family and sick leave program and many other provisions aimed at broadening the nation’s social safety net.

The deal is far smaller than the slimmed-down $1.75 trillion version the House passed in October. But Manchin, whose vote is crucial to pushing any legislation through the Senate via the reconciliation process, shot down the House bill in December. Only a simple majority of senators was needed to pass the bill via reconciliation.

Since then, Democratic leaders had been negotiating with Manchin to see what he’d be willing to support. The senator had repeatedly voiced concerns about the legislation’s potential impact on inflation, which has skyrocketed over the past year. Economists, however, disagree about the actual extent of the legislation’s effect on inflation.

The latest version of the package, which Biden signed into law Tuesday, is projected to reduce the deficit by more than $300 billion over a decade, according to the Congressional Budget Office.

Here’s what’s in the legislation:

Medicare drug price negotiation: The legislation will empower Medicare to negotiate prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary will negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number is set to rise to 20 drugs a year for 2029 and beyond.

This controversial provision is far more limited than the one House Democratic leaders have backed in the past. But it will open the door to fulfilling a longstanding party goal of allowing Medicare to use its heft to lower drug costs.

Inflation cap: The legislation will also impose penalties on drug companies if they increase their prices faster than inflation, starting in 2023. However, the Senate parliamentarian ruled that the provision could only apply to Medicare, not the private insurance market as well, as the Democrats had wanted.

Limit on Medicare out-of-pocket drug costs: The law will redesign Medicare’s Part D drug plans so that seniors and people with disabilities won’t pay more than $2,000 a year for medications bought at the pharmacy, starting in 2025. Insurers and drugmakers will have to pick up more of the tab.

Free vaccines for seniors: Medicare enrollees will be able to get all vaccines at no cost. Right now, only certain vaccines, such as those for Covid-19, the flu and pneumonia, are free.

Altogether, the drug price provisions are expected to reduce the federal deficit by $288 billion over a decade, according to the CBO.

Cheaper insulin: Medicare beneficiaries will pay no more than $35 a month for insulin, starting next year.

Democrats had hoped to extend that provision to those covered by private insurance, but the parliamentarian decided that including the commercial market was not compliant with reconciliation rules. Democrats kept the broader provision in the package, but Republicans raised a point of order to force a vote that stripped the private insurance market from the measure.

Affordable Care Act subsidies: The legislation will also extend the enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they won’t expire just after the 2024 presidential election.

The subsidies were expanded through this year as part of Democrats’ $1.9 trillion coronavirus relief package, known as the American Rescue Plan, which was enacted in March 2021. They have made health care coverage on the Obamacare exchanges more affordable, leading to a record enrollment of 14.5 million people this year.

Enrollees pay no more than 8.5% of their income toward coverage, down from nearly 10%. And lower-income policyholders receive subsidies that eliminate their premiums completely.

Also, those earning more than 400% of the federal poverty level have become eligible for help for the first time. Those with incomes between 400% and 600% of the poverty level would face a doubling of premiums without the federal subsidies, according to the Centers for Medicare and Medicaid Services, which administers the federal Obamacare marketplace.

Overall, the expanded assistance reduced premiums by 50%, or $67 per consumer per month, the agency said.

If the enhanced federal assistance were allowed to expire at the end of the year, nearly all of the 13 million subsidized enrollees would see their premiums rise for 2023, according to the Kaiser Family Foundation. More than 3 million people could become uninsured, an Urban Institute analysis found.

Democrats were hoping to avoid the negative publicity of such premium increases. If Congress didn’t act, consumers would learn in the fall just how much more they could have to pay. Open enrollment begins on November 1, a week ahead of Election Day.

Instead, CMS is projecting that even more people will flock to the Affordable Care Act exchanges now that the President has signed the bill.

“We’re really going to be able to build on our record enrollment and see an increase this year, this upcoming enrollment,” CMS Administrator Chiquita Brooks-LaSure told CNN. “The only reason why we’re having that conversation is because the subsidies have been extended.”

Extending the enhanced subsidies will cost $64 billion, according to the CBO.

Climate provisions: The deal is the biggest climate investment in US history. It will slash US greenhouse gas emissions 40% by 2030, Majority Leader Chuck Schumer’s office said.

The new agreement spans everything from electric vehicle tax credits to clean energy manufacturing to investments in environmental justice communities.

Extending tax credits for electric vehicles made it in, after previous opposition from Manchin. The tax credits will continue at their current levels, up to $4,000 for a used electric vehicle and $7,500 for a new one. However, the income threshold for eligibility is lowered – a key demand of Manchin’s.

The law also contains 10-year consumer tax credits to bring down the cost of heat pumps, rooftop solar, electric HVAC and water heaters. It includes $60 billion of funding for environmental justice communities and for the reduction of legacy pollution.

And it puts $60 billion towards domestic clean energy manufacturing and $30 billion for a production credit tax credit for wind, solar and battery storage.

The legislation provides $4 billion in additional drought funding – a key negotiation point for Sinema amid the multi-year drought in the Southwest.

The tax credits will be technology neutral – meaning they won’t favor renewables over fossil fuels outfitted with carbon-reducing measures. However, they are designed to reward those who reduce their emissions the most, according to Senate Finance Chairman Ron Wyden, a Democrat from Oregon.

The deal also includes major provisions like a methane program that will levy a fee on oil and gas producers that emit methane above a certain threshold. It also includes $27 billion for a so-called clean energy accelerator – essentially a green bank that will leverage public and private funding to expand more green projects.

Tax provisions: To boost revenue, the law imposes a 15% minimum tax on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which will raise $258 billion over a decade, according to updated figures provided by Schumer, will apply to companies with profits over $1 billion.

Concerned about how this provision would affect businesses, particularly manufacturers, Arizona Sen. Kyrsten Sinema, a moderate Democrat, won changes to the package that will allow companies to write off investments faster, which will reduce their tax burden.

Sinema also nixed her party’s effort to tighten the carried interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a 20% long-term capital gains tax rate instead of income tax rates of up to 37%. The provision would have lengthened the amount of time investment managers’ profit interest must be held from three years to five years to take advantage of the lower tax rate. Addressing this loophole, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.

In its place, a 1% excise tax on companies’ stock buybacks was added, raising another $74 billion, according to Schumer’s office.

The package also calls for providing more funding to the IRS for tax enforcement, which is expected to raise $124 billion.

Democrats say families making less than $400,000 per year will not be affected, in line with a pledge by Biden. However, Republican lawmakers are seizing on a Joint Committee on Taxation report that shows that the measures will indirectly hit lower-income and middle-class Americans. Economists expect that employers will pass along a portion of the corporate tax to workers in the form of lower wages.

Also, there will be no new taxes on small businesses.

Manchin also threw cold water on one of Schumer’s priorities – addressing the $10,000 cap on state and local tax deductions, known as SALT, that was part of the GOP tax cut package in 2017 and affects many states in the Northeast and on the West Coast.

The deal also leaves out tax surcharges on wealthy individuals, which was part of the House bill last year.

Here’s what was left out

Universal pre-K and lower child care costs: The earlier version of the House bill would have provided free pre-K for 3- and 4-year-olds, expanding access to 6 million children a year. It would have also limited child care costs for families with children younger than age 6 to no more than 7% of income for those earning up to 250% of the state median income, expanding access to about 20 million children. Funding for these programs would have lasted for six years, costing an estimated $381.5 billion, according to the CBO.

Paid family and sick leave: Biden also called for a federally funded paid family and sick leave program for the millions of Americans who don’t already receive the benefit from their employer. The previous House bill included four weeks of paid family and sick leave, which would have cost $205.5 billion, according to the CBO.

Enhanced child tax credit: The beefed-up child tax credit – which provided $300 a month for each child under age 6 and $250 a month for each one ages 6 through 17 – would have been extended through 2022 for more than 35 million families under the House bill.

The previous enhancement, which was part of the coronavirus relief package, was only in place for 2021.

Heads of households earning up to $112,500 a year and joint filers making up to $150,000 annually would have qualified for the full enhanced credit. But, unlike in 2021, only these families would have received the funds in monthly installments this year. Eligible parents with higher incomes would have had to claim the credit on their tax return next year.

The credit would have been made permanently refundable so the lowest income families would continue to qualify.

This credit, along with the earned income tax credit, would have cost about $203 billion, according to the CBO.

Earned income tax credit: The expanded earned income tax credit, which was also part of the coronavirus relief package, would have been extended through 2022 as well, helping 17 million low-wage childless workers.

The previous House bill would have nearly tripled the maximum credit childless workers can receive, extended eligibility to more people, reduced the minimum age and eliminated the upper age limit. This credit, along with the enhanced child tax credit, would have cost about $203 billion, according to the CBO.

Home health care: Biden’s original plan called for permanently improving Medicaid coverage for home care services for seniors and people with disabilities, with the goal of reducing the more than 800,000 people on state Medicaid waiting lists.

The plan also aimed to improve the quality of caregiving jobs. The measure would have cost nearly $158 billion, according to the CBO.

Affordable housing: The legislation would have funneled $25 billion into the construction, rehabilitation or purchase of affordable homes for low-income people and for the creation and preservation of affordable rental housing. It would have provided $65 billion to address the capital needs backlog of public housing and would have bolstered rental assistance for hundreds of thousands of families.

The measure would have also invested in down payment assistance and in community-led redevelopment projects in under-resourced neighborhoods. And it would have provided $24 billion to fund housing vouchers and supportive services.

The effort would have cost about $148.1 billion, according to the CBO.

Lowering the cost of college: The earlier House bill would have increased the maximum Pell grant by $550 for more than 5 million students enrolled in public and private nonprofit colleges and expanded access to undocumented students brought to the US as children, a group also known as Dreamers.

It would have invested in historically Black colleges and universities and other institutions that serve underrepresented communities. And it would have increased funding for workforce development.

These provisions would have cost a total of $39.8 billion, according to the CBO’s estimate.

Biden initially also called for making tuition free for two years at community colleges, but that provision was dropped from the House bill.

Children’s nutrition: The previous House bill would have expanded free school meals to nearly 9 million children during the school year and provided the parents of 29 million kids a monthly $65 per child benefit to purchase food during the summer.

Congress recently passed a measure extending pandemic school meal waivers.

Medicaid coverage gap: Democrats had called for providing Affordable Care Act premium subsidies for low-income Americans in the 12 states that have not expanded Medicaid, which would have enabled them to buy Obamacare policies with no monthly premiums, through 2025.

Doing so would have cost about $57 billion, the CBO estimated.

And the bill would have required state Medicaid programs to provide 12 months of eligibility to women after they give birth. States currently must provide at least 60 days of coverage.

Medicare hearing benefits: Hearing services would have been covered under Medicare, starting in 2023, under the earlier bill that passed the House.

Only 30% of seniors over age 70 who could benefit from hearing aids have ever used them, the White House said.

This measure would have cost $36.7 billion, according to the CBO.

Biden had initially also called for expanding Medicare to include vision and dental coverage.

Extending Medicare solvency: Senate Democrats said in early July that they had finalized a deal to extend the solvency of Medicare by a few years by closing a tax loophole. The proposal would have ensured that owners of certain “pass-through” businesses, who include business income on their personal tax returns, would pay the 3.8% net investment income tax. It would have applied to individuals who earn more than $400,000 annually and to joint filers who earn more than $500,000.

But that agreement was then also scuttled by Manchin.

Medicare’s hospital insurance trust fund will only be able to pay scheduled benefits until 2028, according to the most recent analysis by the program’s trustees.

This story and headline have been updated with additional developments.

Tami Luhby Katie Lobosco
Tami Luhby
Katie Lobosco

GM CEO Mary Barra earned $29M in 2021: How salary ...

General Motors Chair and CEO Mary Barra got a raise and remains the highest paid CEO of the Detroit Three automakers.

In fact, all of GM's top officers saw big increases in compensation last year.

But the median pay for all GM employees declined in 2021 compared with 2020, largely due to parts shortages disrupting production and resulting in some workers losing hours or being temporarily laid off.

In its annual executive compensation report that GM filed to the U.S. Securities and Exchange Commission on Friday, GM reported that Barra made a total compensation of $29,136,780 in 2021 for running the company and chairing the board of directors. For 2020, Barra took home $23.7 million in total compensation and $21.6 million in 2019

GM listed its global workforce as 157,000, of which, 98,000 employees are in the U.S.

Chips shortage impact

Public companies are required to disclose compensation figures as part of the 2010 Dodd-Frank Act.

In the filing, GM lists Barra's 2021 base salary as $2.1 million, up from $1,995,000 in 2020.

This is the third consecutive year Barra topped her crosstown rivals at Ford Motor Co. and Stellantis.

Last month, Ford Motor Co. filed documents that showed its CEO Jim Farley received total compensation of $22.8 million in 2021 for running the company. Stellantis CEO Carlos Tavares made $21 million in 2021.

Meanwhile, the ratio of Barra's total compensation to the median of all GM employees' total compensation is 420 to 1.

The median pay for GM's global employees in 2021 was $69,433, according to GM. In 2020, GM reported the figure as $71,682. Neither includes the compensation of a fully vested pension, said GM spokesman David Caldwell.

Caldwell said the reason that the median employee salary was lower in 2021 compared with 2020 is because more plant employees had downtime due to a variety of reasons, including the global shortage of semiconductor chip parts, which continues to disrupt new car production.

Median employee pay can include salary or hourly wage, bonus, company contributions to 401(k), overtime and profit sharing. The amount does not include health care and other benefits.

Top leaders pay

Barra's 2021 compensation broke down as follows:

$2.1 million in salary

$14.6 million in stock awards

$4 million in option awards

Nearly $7.6 million in incentive plan compensation

$873,075 in other payments

Beyond the lucrative salary, GM also spent $413,368 last year for personal travel, security, company vehicle programs, executive physical and financial counseling for Barra.

GM has said 90% of Barra's and other executives' compensation is "at risk," meaning it depends on GM's financial performance and meeting other goals and objectives.

In GM's filing, it also listed the 2021 total compensation of other key GM officers:

President Mark Reuss : $12,535,747, up from $9,963,402 in 2020.

: $12,535,747, up from $9,963,402 in 2020. CFO Paul Jacobson : $9,578,648, up from $5,179,672 for 2020.

: $9,578,648, up from $5,179,672 for 2020. President of North America Steve Carlisle : $8,980,204, up from $6,289,463 in 2020.

: $8,980,204, up from $6,289,463 in 2020. Executive Vice President of Global Product Development, Purchasing and Supply Chain Doug Parks: $8,835,477, up from $6,733,708.

EVs tied to pay

GM lists total executive compensation as including salary and "short-term incentive plan" targets. Those include: discretionary bonus, stock and option awards, non-equity incentive plan compensation (which is performance-based bonus), pension value, and other compensation, such as air travel, company vehicle programs, security, financial counseling, executive physicals, and employer contributions to savings plans such as a 401(k) match and life insurance.

Earlier in the week when GM announced its first-quarter earnings results, Barra told investors that GM would now tie executive compensation to its EV targets.

"By announcing this change to the compensation package, the GM Board is essentially signaling to the market that GM is seriously committed to the shift to EVs," said Steve Melnyk, a business professor at Michigan State University in East Lansing.

It also appeases socially conscious investors, said Morningstar Auto Analyst David Whiston.

"The compensation change is another way to signal how serious GM is to its commitment of an all-zero emissions vehicle future in light vehicles by 2035," Whiston wrote in an email to the Detroit Free Press. "It’s the type of thing that (socially conscious) investors will like to see and it helps GM avoid a criticism of someone pointing out what some would otherwise see as an inconsistency between words and compensation."

The EV targets will be part of GM's Long Term Incentive Plan which provides bonus compensation to executives. Business performance targets comprise 75% of plan and stock options make up the other 25%, said GM spokesman Caldwell.

"The new EV targets are within the business performance category," Caldwell said.

Within that 75%, the EV targets will account for about 15%, he said.

Contact Jamie L. LaReau: 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.

GM to pay salaried workers bigger bonuses despite turbulent 2019

Most of the 69,000 salaried workers at General Motors can expect to receive annual bonuses in two weeks that match or exceed the amount they got last year, the Free Press has learned.

The bonuses come despite a turbulent year for GM. A year ago this month, the automaker began cutting some 4,000 salaried jobs, mostly in North America, as part of a restructuring plan to save it $2.5 billion in 2019.

Then, in the fall, the UAW had a 40-day nationwide strike against GM after the automaker said it would idle three U.S. factories: Lordstown Assembly in Ohio and transmission plants in Warren and Baltimore. A fourth, Detroit-Hamtramck Assembly, won a reprieve in the UAW contract. But the strike cost GM $3.6 billion in 2019 pretax profits.

Despite all of that, GM hit its global financial and other performance goals, allowing it to boost the bonus payments to salaried employees who meet their individual performance targets, a GM spokesman confirmed.

"We had a very strong performance in 2019," said Pat Morrissey, GM spokesman. "When GM wins, all of our team members win.”

The payout

GM employs 164,000 workers globally. Of those, 69,000 are salaried and about 48,000 of those salaried employees work in the United States, Morrissey said.

GM's supervisors are meeting with salaried employees to tell them their bonus amounts, he said. Employees will receive their bonus payment in their Feb. 28 paychecks.

GM does not disclose those amounts publicly because they can vary from zero, for people who are poor performers, to tens of thousands of dollars for high achievers with large salaries. There is no one-size-fits-all formula similar to that for GM's hourly workforce.

The GM-negotiated formula with the UAW for hourly workers' profit-sharing checks is $1,000 per every $1 billion in GM's North America earnings before interest and taxes. On Feb. 5, GM reported that its 2019 North American pretax profit was $8.2 billion, down from $10.8 billion in 2018. About 47,000 U.S. hourly workers will receive a profit-sharing check of about $8,000, down from $10,750 in 2018, GM said.

Two people familiar with GM's salaried workforce bonus program said GM raised the bonus payout marginally for 2019 from a year earlier. They declined to be named because they are not authorized to speak to the media, but they said a white-collar worker making $100,000 a year and who meets their performance targets could get a bonus of about $11,400 for 2019, up from $10,000 for 2018.

More:GM's laid off workers tell Ford employees: Start looking for new job

Anxiety alleviated

This news alleviates the fear many salaried workers expressed as the UAW strike dragged into a fifth week last October.

Several of GM's white-collar workers grew increasingly on edge about the impact the strike would have on their jobs and compensation.

One GM engineer, who asked to not be identified for fear of losing his job, told the Free Press then that he and some of his colleagues worried salaried workers might lose some of their job security or wages so that GM could satisfy the hourly workers' demands.

These upcoming bonuses along with the hourly employees' $8,000 profit-sharing checks are the best ways to attract and retain talent, said Adam Robinson, CEO of Hireology, a Chicago-based recruitment platform used by many car dealerships.

“If I’m talking to a potential hire and I’m competing with other employers — I can say that you come here, you participate in the outcome because we have a generous profit sharing,” said Robinson. “It will make a difference in competing for talent.”

More:GM salaried workers feel anxiety about union negotiations

More:GM to pay UAW workers $8,000 in profit sharing

Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.


Putin blames West for Ukraine war, suspends nuclear arms treaty

Tensions between the U.S. and the Kremlin ratcheted up Tuesday ahead of the one-year anniversary of Russia's war in Ukraine as Vladimir Putin vowed to pull Russia back from a key nuclear treaty and President Joe Biden reaffirmed the U.S. and its allies won't back down.

Putin's move came on the heels of a surprise and historic visit by Biden to Kyiv on Monday. In a nearly two-hour speech to both houses of the Russian Parliament, Putin said he was suspending Moscow's participation in New START, a strategic nuclear arms reduction treaty between the U.S. and Russia.

Putin said he was taking action because of the U.S. and NATO, without specifying more. "In this regard, I am forced to announce today that Russia is suspending its participation in the strategic offensive arms treaty," he said.

Less than 800 miles away, Biden followed with his own speech in Warsaw.

He said Putin thought Ukraine would "roll over" when he invaded with tanks a year ago, but "he was wrong" because of the bravery of Ukrainians and "iron will" of nations everywhere that have come to Ukraine's aid.

"One year ago, the world was bracing for the fall of Kyiv," Biden said. "Well, I just came from visiting Kyiv, and I can report, Kyiv stands strong. Kyiv stands proud. It stands tall. And most importantly, it stands free."

'Americans stand with you':Joe Biden walks streets of Kyiv in surprise visit

New START is the last remaining nuclear arms reduction deal between the U.S. and Russia. It was signed in 2010 and extended for five years in 2021. It limits each side to 1,550 long-range nuclear warheads.

"Over the last (few) years Russia has violated and walked away from key arms control agreements. With today's decision on New START the whole arms control architecture has been dismantled," NATO Secretary-General Jens Stoltenberg said.

U.S. Secretary of State Antony Blinken described Putin's move as "deeply unfortunate and irresponsible. We’ll be watching carefully to see what Russia actually does."

US has spent billions on Ukraine war aid:Is that money landing in corrupt pockets?

Although Biden did not directly address Putin's pledge on the nuclear treaty, he said "autocrats" like Putin have gotten weaker over the past year as democracies have strengthened in solidarity with Ukraine.

"A dictator bent on building an empire will never be able to e the people's love of liberty," Biden said.

Biden also addressed the Russian people, telling them the U.S. and allies "do not seek to control or destroy Russia" and pushing back at Putin’s claim that the West is plotting to attack Russia. He said the Russian people "are not the enemies."

Directing his comments to Poland and other NATO allies, Biden said Putin "no longer doubts the strength of our coalition," but said he "still doubts our conviction” and “staying power.”

He declared: “Ukraine will not waver. NATO will not be divided. And we will not tire."

As he has done many times before, Putin blamed the West for provoking the war, accusing the U.S. and its European allies of wanting to acquire "limitless power."

He said Ukraine's allies were "playing a dirty game," that NATO members were openly talking about supplying Ukraine with nuclear weapons – they aren't – and that the entire planet was "dotted" with U.S. military bases.

Putin claimed that Western economic sanctions on Russia were not working, that Russian farmers just had a "record" grain harvest – Russia has stolen Ukraine's grain over the past year – and that he plans to bolster Russia's diplomatic and economic ties to India, Iran and other countries in the Middle East.

Large parts of his speech were focused on domestic policies connected to infrastructure spending and financial reforms. He praised Russian soldiers and said he would "systematically" continue with the Ukraine invasion he ordered a year ago. He did not unveil any new military objectives connected to Ukraine.

Forced to flee:They counted the days until they could return to Ukraine. Now, they're not sure they'll go back

Putin ruled out Russia making a first nuclear strike in Ukraine and said Russia would conduct nuclear tests only if the U.S. did so first.

Biden said Russian forces have committed "crimes against humanity without shame or compunction," pointing to the targeting of civilians, the kidnapping of children, "rape as a weapon of war" and bombings of maternal hospitals, schools and orphanages. "It's abhorrent," Biden said, promising Russia will be held accountable.

During Biden's unannounced visit to Warsaw on Monday, Biden met with President Volodymyr Zelenskyy and reiterated American commitment to supplying the country with aid and weapons for the long term.

"Ukraine will never be a victory for Russia, never," Biden said in Warsaw.

Dig deeper:They counted the days until they could return to Ukraine. Now, they're not sure they'll go back