7 Ultra-Rich Companies Rake in Profits While Paying Workers Peanuts
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In 2009, one particular car wash kingpin, John Lage, who owns some 21 car washes, was forced to pay $3.4 million in back wages, damages and interest to over 1,000 workers who were paid less than the minimum wage and denied overtime.
Yet Lage continues to live like a king, with two waterfront homes, one in Queens and one in Westchester. The lakefront house in Westchester cost $1.9 million back in 2002, and according to the report also has a swimming pool and turrets—and is across the street from his son and business partner's $1.3 million home.
5. Air Serv
When we talk about airports and flying, the workers who come to mind tend to be TSA security guards or the pilots and flight attendants we interact with on the plane. But there's a whole other group of workers that we may see and deal with regularly—or may not see, but whose services we all enjoy. Doing jobs like baggage handling and checking IDs or cleaning the cabin of the plane before passengers board, these workers are often subcontracted out—and many of them make around $8 an hour.
Air Serv, one of these companies, had over $400 million in revenue in 2010. Its CEO, Frank Argenbright, is worth some $300 million, and lives in a $6.8 million home in Sea Island, Georgia—while many of his workers at Newark and JFK airports make less than $8 an hour.
Before founding Air Serv, Argenbright was the CEO of Argenbright Security, which did passenger screenings before the TSA took over—including at two of the three airports from which the 9/11 hijackers departed. He was personally denounced for that (major) screwup, including by disgraced former House majority whip Tom DeLay, who said in 2001, “Argenbright has become a synonym for failure.”
Despite that reputation, he was still able to hustle up $7 million from friends to found Air Serv. He told Forbes that he is “more careful and generous when it comes to dealing with his workforce these days.” If $8 an hour is generous, we'd hate to see stingy.
McDonald's is a brand virtually synonymous with America, cited as an example of US cultural hegemony around the world. Yet it is known almost as much for its low-wage jobs as it is for its French fries, having spawned the term “McJob,” implying a low-wage, low-skill position.
Remember last year, when the company announced its " National Hiring Day” to fill 50,000 of those $8 an hour jobs? Hundreds of workers showed up to grab those McJobs. Nationwide, McDonald's is the third-largest low-wage employer after Walmart and Yum! Brands, which owns Taco Bell, Pizza Hut and KFC, employing nearly 860,000 workers. While the rest of the economy (and low-wage workers) are suffering, McD's has been profitable over the last three years, and famously expanding. It's got more revenue, profits and cash holdings than before the recession began. According to Business Insider, its CEO/chairman of the board, James A. Skinner, made $7 million in 2011 (he also owns stock in the company worth some $16 million), and its COO/president, Donald Thompson, made $3.3 million.
Business Insider's Henry Blodget asked earlier this year how Walmart, McDonald's and Starbucks felt paying their employees so little. Henoted that they could pay employees an additional $5,000 a year out of their operating profits and still make “boatloads of money” but have workers living above the poverty line.
Starbucks is marketing a new coffee blend these days—the “Indivisible” blend, which sells for $14.95 a pound. But there's a new hook behind the even-more-overpriced coffee (their normal blends sell for $9.95 or so): if you buy it, they'll donate $5 (the $5 more they're charging for it) to “Create Jobs for USA.”