Taken For A Ride

Another example of the Journal Sentinel's loathing of everyday workers, in the case of Harley-Davidson holding the state hostage for subsidies by threatening job loss, the Journal feels the workers just have to take it. And, they add, "We don't doubt Harley's struggles."

As usual, their analysis is lacking. Maybe they should doubt Harley. Maybe they should question whether these contractual concessions are necessary. Maybe rather than just listening to whatever a CEO tells them, the Journal could do some research and put the issue in the correct socioeconomic context. As Milwaukee Magazine's Eric Gunn writes, the favorably-business-biased, screw-the-worker attitude is typical of the media over the past few decades.

Luckily Jack Norman has actually looked at the facts of the situation. He found, "Harley made $104 million in profits in the first six months of 2010. It did have a $55 million loss in 2009, a strategic choice resulting from a $126 million write-down for discontinued operations. Before that, the company had made at least $100 million in profits for 15 straight years."

In previous work, Norman discovered, "Harley's Wisconsin taxes have dropped dramatically, according to data from the Wisconsin Department of Revenue. Its state income tax bill plummeted from nearly $23 million in 2005 to under $1 million in 2008 (the most recent year with data). Its pre-tax profits fell much, much less, from $1.5 billion to $1 billion...Harley's effective tax rate - Wisconsin income tax as a percent of global profits - went nearly to zero. In 2005, the company paid 1.5% of pre-tax profits in Wisconsin income tax. By 2008, that had dropped below 0.1%."

If workers making $30 an hour are dragging the company down, can't the same be said for executive salaries in the millions? Norman discovered, "Last year, Harley's CEO (a job split during the year between James Ziemer and Keith Wandell) took home $8,864,919 in extras over and above base salary of $1,105,169. In 2008, the bonuses totaled $6,201,323. That's over $15 million in bonuses the past two years to the CEO of a company that cries "crisis" to justify lower wages and benefits for production workers...Members of Harley's board of directors (if they aren't already employees) each collected an $80,000 fee in 2009, plus $50,000 worth of stock. During this "crisis," board members never lost their $1,500 annual allowance for clothes and accessories, nor their free use of a motorcycle."

Pennsylvania was hung over a cliff by Harley last year. After threatening job loss and possibly moving production out of state, Pennsylvania gave Harley $15 million in subsidies. Wisconsin, in similar fashion, is offering Harley $25 million.

This is typical economic development. It's a subtle class warfare. Taxpayers funding their own salary reduction and/or job loss, alongside increasing corporate profits. We need federal action to stop this economic war among the states.

For Further Reading:
American Socialism
Equitable Development
Industries Find Surging Profits In Deeper Cuts
Legalized Bribery
Spuriously Invoking The Tax Boogeyman