As Congress and the Obama administration look to hold major banks that have received billions in federal bailout funds better accountable for their corporate practices, a report released today by the Service Employees International Union (SEIU) on Goldman Sachs and its holdings in Burger King finds that the true total of taxpayer subsidies some of the banks are enjoying extends well beyond the monies they've taken through the Troubled Assets Relief Program (TARP).
The report finds that one of Goldman Sachs' major investments, Burger King, costs taxpayers more than a quarter billion dollars a year as Burger King employees are forced to rely on public health and income support programs as a result of the lack of affordable employer health coverage and sub-poverty wage levels at Burger King.
Meanwhile, Burger King chief executive John Chidsey took home $5.4 million in 2008 and Goldman Sachs accepted $10 billion in taxpayer bailout money -- then paid out $6.5 billion in bonuses. Goldman paid the highest per employee bonus average among top banks reporting so far, and the firm's bonuses were nearly double the average bonus on Wall Street. If Goldman Sachs had used the $6.5 billion it paid in corporate bonuses to help Burger King's 360,000 workers instead, each worker would have received $18,000.
"The misuse of tax dollars we're seeing now by some of the bailed-out banks is no one-shot deal," said SEIU President Andy Stern. "Year in and year out companies that can easily afford to improve health care and wages for workers simply aren't doing so and are making taxpayers pick up the public assistance tab instead. It's a drain on our economy we can't afford to ignore any longer."
A previous SEIU report on another bailout recipient, Bank of America, found similar evidence of employment costs being shifted to taxpayers -- up to $50 million a year because Bank of America workers lack affordable employer health benefits.
Service workers held a protest today outside Burger King headquarters in Miami to call on Burger King and Goldman Sachs to stop opposing efforts to rebuild the economy through improvements for workers while taking billions of dollars from taxpayers and rewarding CEOs and corporate staff. Additional public outreach on the issue will take place throughout the week this week at Burger King restaurants in other cities around the country.
While costing taxpayers billions, both Burger King and Goldman Sachs are fighting legislation in the U.S. Congress that could help all workers and the overall economy by broadly increasing consumer purchasing power. Between 2006 and 2008 Burger King spent $319,648 on lobbying, including lobbying against the Employee Free Choice Act, a measure that would ensure workers the freedom to form a union for a voice for improved wages, benefits, and working conditions. Burger King also spent $180,000 to hire lobbyists to fight pro-worker legislation, including an increase in the minimum wage in 2006 and 2007.
Goldman Sachs is involved in lobbying against workers' interests as a member of the Business Roundtable, which spent $15,849,000 on lobbying in 2008 according to the Center for Responsive Politics, including lobbying against the Employee Free Choice Act in the third and fourth quarters last year.
With the food service industry, including fast food, expected to add one million new jobs to the economy between 2006 and 2016, the SEIU report "King Size Combo: What Burger King and Goldman Sachs Are Costing Our Country" looks at a wide range of worker and consumer issues at Burger King to gain perspective on the potential import of the growing fast food sector for the broader U.S. economy.
The SEIU report concludes that in addition to assuring sound banking practices on Wall St., Goldman Sachs must take responsibility for its important economic holdings on Main St., such as Burger King. The report recommends that regulators should demand that bailout recipients stimulate the economy by increasing lending and by committing to living wages, affordable health benefits, freedom for workers to choose to form unions (the Employee Free Choice Act), and other consumer and worker protections.
Source: Service Employees International Union
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