May 12th Protesters Identify a Stumpf Problem
As thousands of protesters marched through Downtown Manhattan yesterday, I had a difficult task – explain why Wells Fargo CEO John Stumpf was such a threat to GED students in New York City. The connection was not so straightforward, but May 12th was a day in which the parts of the City that normally operate in isolation were brought into comparison and conflict with each other. The more than 10,000 protesters made sure this was literally the case as bankers were forced to squeeze past housing rights activists and Wall Street “power-couples” shot disturbed glances at homeless rights advocates. It was a day for all the contradictions in our City to come face-to-face with one another.
I was positioned in Teach-in Zone 2, right on the edge of Pine and Water Street. My topic was education, but my approach was not typical of other education teachers. Most would discuss the high-profile cuts – big number layoffs for teachers and the next in the seemingly never ending gutting of the public higher education system. My focus was to look at smaller budget cuts. Though small, these cuts threaten to devastate critical support programs, further dislocating poor and working class New Yorkers.
My lead in was John Stumpf. He’s a dapper man who prefers dark suits that contrast with his gently graying hair. And Stumpf has a problem, a really serious one. One that I presented to the students at my open-air teach-in. How can you spend $8,500 an hour? That’s how much he received in compensation from Wells Fargo bank last year. The crowd shouted out all the typical working class fantasies – go on a long vacation, buy twenty pairs of jeans, pay off my student loans… Yet, none of these captured Stumpf’s dilemma. He simply cannot spend $8,500 an hour.
Let’s not get ahead of ourselves. There is a plan for Stumpf and his fellow CEO’s. First, the cuts.
The education budget is clearly a target for Bloomberg. And with education we know which way the human feces rolls. The Federal Government has ended important funding streams to New York City’s education system. Simultaneously, budget-cutting New York State Governor Andrew Cuomo has also withdrawn funding from the system. And Mayor Michael Bloomberg has gone right along with them by proposing to cut $461 million from the system.
A good chunk of that comes from the previously mentioned teacher layoffs. These firings will send class sizes soaring – from today’s average of 21 students per class to 24 students after the cuts. Yet, the problem with education is about more than layoffs or class sizes. Bloomberg’s coveted charter schools are literally bleeding the public education system dry. In 2007, the charters and other private institutions received $1.1 billion in funding from the Department of Education. That number will climb to $2.6 billion by 2012. The NYC Independent Budget Office reports that, “growth in payments to nonpublic and charter schools over the two years [2010-2012] will outstrip the total growth of the DOE’s budget.”
All of these funds could be directed back into the public education system with the aim toward reducing class size and creating an education system based on learning instead of testing. But my question for the day was what happens to students, particularly youth, who become dislocated from this education system.
Bloomberg has a plan for them. It involves more cuts. There are currently 126 community-based programs that offer GED, English for Speakers of Other Languages and other Adult Literacy Courses. These programs rely on funding from the Department of Youth and Community Development (DYCD). Last year, the funds in this line amounted to around $5 million. Bloomberg is proposing to cut this budget in half to $2.5 million. I work at one of these programs. Budgets are already really tight. Many programs will not survive these cuts leaving thousands of students outside of both the traditional and non-traditional education system. Just think, it would only take about 13 days of Stumpf style compensation to fund these programs.
Students in these non-traditional education programs need more than just an education. They also need jobs. However, given the current rate of youth unemployment and long-term patterns of discrimination a job may be hard to come by in the private sector. A recent study by the Community Service Society reported that a shocking 3 out of 4 African-American males age 16 to 24 are unemployed. Programs funded through the DYCD are therefore a crucial outlet for employment. These too are slated for cuts, to the tune of $3.2 million. Such cuts may jeopardize the City’s ability to receive Federal funding. If the cuts go through and the same numbers of youth apply for jobs, they will have only a 1 in 12 chance of receiving one.
This all leads to our Stumpf problem. While Bloomberg has become stingy with people looking for an education and with youth looking for a job, the fiscal floodgates have been opened to banks like Wells Fargo. Over the past fifteen years, Wells Fargo has received more than $122 million in tax exemptions and subsidies from the City of New York. If New York had actually collected these funds we could have funded ten years of adult education services or created thousands of more slots for youth employment.
Things get even worse at the Federal level. While most of us contribute upwards of 30% of our income to taxes, big banks like Wells Fargo don’t. They may have the legal status of a person, but they don’t pay taxes like one. Last year they paid the equivalent of a 10.4% tax rate, well below the 35% standard Federal tax rate. As if this wasn’t enough they also dipped into Bank Bailout funds – grabbing some $43.7 billion in public funds. All this resulted in $3.8 billion in profits last year, or $42 million in profits per day.
Stumpf loved all this. His personal compensation soared to $17.6 million, a figure that accounted for the $8,500 an hour problem he faces. He now makes 796 times what an average bank teller at Wells Fargo brings home every year. And his $17 million dwarves the budgets of most GED programs and could be used to improve the lives of thousands of youth in the City.
May 12th was a day to declare that the time when Wall Street and the Banks dominate our City without resistance has come to an end. We ended my teach-in with the chant – Wells Fargo! Pay your taxes! This was less a polite request and more of a demand that if their taxes were not paid, the next protest would escalate beyond just a teach-in. You see there are many ways to resolve a Stumpf problem – some include teaching, others more direct forms of action.