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In Business, Law, Politics, Social commentary on March 12, 2013 at 12:02 am

On December 10, 2012, Oregon Governor John Kitzhaber summoned lawmakers for a special (interest) session of the legislature.

The reason: To give Nike, Inc., a guarantee that it would be taxed only on in-state sales.

Nike had promised to spend at least $150 million and create at least 500 jobs in Oregon–if the legislature approved such a tax-guarantee bill.

Multinational corporations such as Nike and Intel relish the state’s current tax policy–which took effect in 2006. The reason: It saves them millions of dollars on state income taxes.

Oregon caters to such well-heeled companies because they provide thousands of jobs and revenues from personal income taxes for state programs.

The catch: Its tax policy–called the single-sales factor–taxes companies on their sales in Oregon while ignoring their worldwide operations.

Nike reported revenues of $6.5 billion for 2012.

Asked why he needed the bill so quickly, Kitzhaber said Nike officials were expressing “a sense of urgency” and he didn’t want to risk losing what could be a significant job-creation opportunity.

“They have to make their move as soon as possible,” he said.

In short, Nike is threatening to leave Oregon if it doesn’t get a tax-break guarantee.

Kitzhaber’s haste to appease a giant multinational sportswear company is yet another reason why America needs an Employers Responsibility Act (ERA).

Such legislation would ensure fulltime, productive employment for millions of capable, job-seeking Americans.  And it would achieve this goal without raising taxes or creating controversial government “make work” programs

If passed by Congress and vigorously enforced by the U.S. Departments of Justice and Labor, an ERA would legally require employers to demonstrate as much initiative for hiring as job-seekers are now expected to show in searching for work.

Among its provisions would be one to cover the above-mentioned type of corporate extortion:

The seeking of “economic incentives” by companies in return for moving to or remaining in cities/states would be strictly forbidden.

Such “economic incentives” usually:

  1. allow employers to ignore existing laws protecting employees from unsafe working conditions;
  2. allow employers to ignore existing laws protecting the environment;
  3. allow employers to pay their employees the lowest acceptable wages, in return for the “privilege” of working at these companies; and/or
  4. allow employers to pay little or no business taxes, at the expense of communities who are required to make up for lost tax revenues.

Employers who continue to make such overtures would be prosecuted for attempted bribery or extortion:

  1. Bribery, if they offered to move to a city/state in return for “economic incentives,”
  2. Extortion, if they threatened to move their companies from a city/state if they did not receive such “economic incentives.”

This would protect employees against artificially-depressed wages and unsafe working conditions; protect the environment in which these employees live; and protect cities/states from being pitted against one another at the expense of their economic prosperity.

To return to the Oregon story, “creating at least 500 jobs in Oregon” may sound like a lot, that doesn’t necessarily mean they will be high-paying, professional ones by which an employee can support himself and a family.

“Jobs” could also mean part-time jobs, which come without medical insurance benefits.

In the “Careers” section of Nike’s website, a prospective employee will find the following:

NIKE, Inc.’s competitive benefits program provides employees with the opportunity to stay fit, ensure the wellness of their families, and create a positive working environment. That is why every geography provides for variable health coverage, fitness center memberships, time off, retirement savings, and more.

Your particular benefits package will depend on your position, location, and years with the company. Here’s a look at what you might be eligible for.

  • Health insurance
  • Life & Accident insurance
  • Disability insurance
  • Retirement Savings Plan with a company contribution
  • Employee Stock Purchase Plan (15% discount)
  • Paid vacations and holidays
  • Paid sabbaticals
  • Product discounts
  • Onsite fitness center/fitness discounts
  • Transportation allowance/discount
  • Tuition assistance

Note the sentence: “Your particular benefits package will depend on your position, location, and years with the company.”

That sentence contains a lot of “if’s”–and the less time an employee has been with the company, the less likely s/he is to be found eligible for a fuller package of benefits.

It’s a safe bet that those who have just been hired–such as under Nike’s doing so in the immediate future–will not be eligible for full benefits.

Thus, these newly-hired employees may well find themselves struggling to pay for health and/or disability insurance.

And here’s another matter for consideration: Kitzhaber claimed that the average pay at Nike is a little above $100,000 a year–roughly twice the average for the rest of the state.

But how does Nike–or Kitzhaber–arrive at that figure?

On its face, it seems as though Nike is paying its avewrage employee $100,000 per year.  But that’s highly unlikely if the employee is acting as simply a glorified shoe salesman.

So Nike might have arrived at that figure by simply adding the total salaries of all its Oregon employees and then dividing that figure by the number of those employees.

At moments like this, it’s well to remember the warning of former British Prime Minister Benjamin Disraeli: “There are three kinds of lies–lies, damned lies and statistics.”

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