Thousands of fast-food workers in New York City, Chicago, St. Louis, Detroit, Milwaukee, Kansas City and Flint, Mich., will strike at joints like McDonald's and Wendy's, calling for a wage increase to $15 an hour and the right to join a union without retaliation. (Although all American workers are legally allowed to join unions, many who try to organize are fired or punished with reduced hours.)
This is part of an economy-wide problem; the bottom 20 percent of American workers—some 28 million employees—earn less than $9.89 an hour, or $20,570 a year for a full-time employee. Their income fell five percent between 2006 and 2012. Meanwhile, average pay for chief executives at the country's top corporations leaped 16 percent last year, averaging $15.1 million, the New York Times reports.
The Times has a great chart showing what low-wage America looks like. Here are the demographics of the 21 million workers who make between $7.25 and $10 an hour:
The mobilization of fast-food workers is a pretty new thing, because the industry has traditionally had high turnover. But the slow economic recovery, which has been characterized by growth in mostly low-wage service sector jobs, has resulted in a growing population of adult fast-food workers who can't find other work.
Fast-food workers can work in the industry for years without more than a dollar or two raise. In his story on the strikes at Salon Monday, Josh Eidelson points to a recent study by the National Employment Law Project that explains why: "Opportunities for advancement in the fast food industry are significantly limited compared to other industries," the report says. "[O]nly 2.2 percent of jobs in the fast food industry are managerial, professional, or technical occupations, compared with 31 percent of jobs in the overall US economy."
One of the Russian men, Aleksandr Kalinin, was also charged Thursday in a separate case with having gained access to Nasdaq servers for two years between 2007 and 2010. The indictment reveals that Kalinin, who also went by the names Grig and Tempo, had access to an unknown amount of information on a bunch of Nasdaq servers, where he was able to enter commands to steal, change, or delete data, and at certain points could even perform systems administrator functions. According to the Times, federal prosecutors, international banking regulators, the FBI, and the financial industry are all worried that next time this happens hackers could gain access to even more tightly secured trading platforms and disrupt the financial system.
From the Times:
While Mr. Kalinin never penetrated the main servers supporting Nasdaq’s trading operations—and appears to have caused limited damage at Nasdaq—the attack raised the prospect that hackers could be getting closer to the infrastructure that supports billions of dollars of trades each hour.
"As today's allegations make clear, cybercriminals are determined to prey not only on individual bank accounts, but on the financial system itself," Preet Bharara, the top federal prosecutor in Manhattan, said in announcing the case.
It is a pivotal moment, just a week after a report from the World Federation of Exchanges and an international group of regulators warned about the vulnerability of exchanges to cybercrime. The report said that hackers were shifting their focus away from stealing money and toward more "destabilizing aims."
In a survey conducted for the report, 89 percent of the world's exchanges said that hacking posed a "systemic risk" to global financial markets...
At a Senate hearing on cybersecurity on Thursday, a representative of several financial industry groups, Mark Clancy, said that "for the financial services industry, cyberthreats are a constant reality and a potential systemic risk to the industry."
The World Federation of Exchanges (WFE) report found that 53 percent of all stock exchanges had experienced a cyberattack in the past year.
My colleague Nick Baumann has reported on how mere programming glitches at the mid-sized financial firm Knight Capital a year ago caused losses at the firm of $10 million a minute, and set off turmoil in the stock market. But an intentional attack could have more drastic effects. Baumann pointed to a 2011 article by John Bates, a computer scientist who has designed software behind complicated trading algorithms. "Fears of algorithmic terrorism, where a well-funded criminal or terrorist organization could find a way to cause a major market crisis, are not unfounded," Bates wrote at the time. "This type of scenario could cause chaos for civilization."
Between 2007 and 2009, the Federal Reserve doled out $16 trillion in massive, super-cheap loans to save flailing Wall Street banks. The 2010 Dodd-Frank financial reform act called for the Fed to limit its emergency lending powers so too-big-to-fail banks wouldn't count on the central bank saving them again. But three years after Dodd-Frank became law, the Fed still has not budged to curb its bailout powers—and Congress is losing its patience.
One section of Dodd-Frank requires that any future emergency lending by the Fed has to be backed by good collateral, can't be used to bail out insolvent firms, and can't go to a single institution. The law also places time limits on the Fed's emergency loans to banks. But the Fed still hasn't crafted these general provisions into specific regulations. Until it does, financial-reform advocates say, the central bank can interpret that part of the Dodd-Frank law however it wants—which means banks have little reason to doubt the Fed will again dole out easy money in the event of a financial meltdown.
This "is an important part of Dodd-Frank, designed to explicitly prohibit bailouts," Sen. Mark Warner (D-Va.), who sits on the Senate banking committee, told Mother Jones when asked about the Fed's delay in writing up the regulations. "The Federal Reserve should move expeditiously to issue the required regulations." Banking committee chair Sen. Tim Johnson (D-Ill.), Sens. Kirsten Gillibrand (D-NY) and Sen. Sherrod Brown (D-Ohio), and Reps. David Scott (D-Ga.) and Keith Ellison (D-Minn.) all echoed Warner's comments. Some members of Congress are so fed up that they're trying to force the Fed's hand; in April, Brown and Sen. David Vitter (R-La.) introduced a bill that would place far stronger limitations on emergency assistance from the central bank.
Obama laid out a broad plan to create new jobs and train American workers: Obama said he will push initiatives to help manufacturers bring jobs back to America, and "continue to focus on strategies to create good jobs in wind, solar, and natural gas that are lowering energy costs and dangerous carbon pollution."
The president also emphasized the importance of education and job training in bolstering the American workforce. He said he would continue to push for universal preschool, and added that "federal agencies are moving on my plan to connect 99 percent of America’s students to high-speed internet over the next five years." He also reminded the audience that Congress is closing in on a plan to lower student loan interest rates.
The president will circumvent Congress if he has to: In the face of an obstinate Congress, Obama said that he would reach out to the American people in speeches over the coming weeks to win them over to his side and get them to pressure their representatives. "Over the next several weeks, in towns across this country, I will engage the American people in this debate," he promised. Obama vowed to use his own executive authority, too, to push the economy forward, and said he'd also "pick up the phone and call CEOs, and philanthropists, and college presidents—anybody who can help—and enlist them in our efforts."
The Sunlight Foundation reviewed three years worth of meetings that banks, industry lobbyists, corporations, and financial reform advocacy groups had with the Commodities Futures Trading Commission (CFTC), the Treasury Department and the Federal Reserve, and found that these regulators had met 2,118 times with financial institutions, and only 153 time with pro-reform groups. Here's what that looks like, via the Sunlight Foundation:
And here is how those meetings break down by agency:
Goldman Sachs, the top meeting-goer, had 222 consultations with regulators over the past three years. JPMorgan Chase met with the agencies 207 times, and Morgan Stanley 175 times. The topics at those meetings were most likely to be derivatives (financial products with values derived from from underlying variables, like crop prices or interest rates), which Dodd-Frank brought under regulation for the first time, and the Volcker rule portion of the law, which would limit risky trading by banks.
From the Foundation's report:
Regardless of how we cut the data, the same striking pattern holds: financial institutions, especially the big banks, are dogged and ubiquitous. Pro-reform groups are stretched thin. Lawyers and lobbyists are also active participants, primarily representing the banks. A number of other corporations show up frequently, most commonly in the energy and agro-business sectors, where derivatives and other market hedges are common practice.
Because of the barrage of industry lobbying, "Regulators themselves have become overly concerned about finalizing rules," CFTC commissioner Bart Chilton told Yahoo News recently. "Over-analysis paralysis, fears of litigation risks, and the lack of people-power have all contributed to the slowdown."