The Verizon Strike is heading into month #2 and neither side is backing down.
Verizon wants to lay off and outsource as many of their US workers as possible. It is super important to them.
Verizon workers don't want that to happen.
Neither side is willing to change their mind.
What's behind the Verizon strike -- and why should Americans care? The strike has a deeper structural level, pointing to the remaking of Verizon as a corporation and workers' prospects for a "middle-class" life, as well as the fate of communications' future in the United States.
The corporate media have identified some of the key issues in the strike -- wages, medical and retirement benefits, and outsourcing. But this is just the tip of the iceberg.
In 2011, 43,000 Verizon workers struck; in 2016, 36,000 are on strike. What happened to the missing 7,000 workers, 16 percent of the workforce? Their disappearance is part of the big squeeze, the outsourcing of labor costs to maximize profit.
The shift from wired to wireless service has been underway for nearly a decade and has had the gravest consequences for customers in rural areas where service is terrible. The consequences of this transition are profound because it shifts the user to inferior and unregulated service (wires remain regulated), cuts the number of unionized employees (wireless workers are mostly non-unionized), charges higher rates and increases corporate profits. It is also part of the company's "broken promises" strategy.
Under a 2008 agreement with the city, Verizon committed to extend the Fios network to every household across the five boroughs by June 30, 2014.
"Through a thorough and comprehensive audit, we have determined that Verizon substantially failed to meet its commitment to the people of New York City,"Verizon is playing a shell game of overpromising and underdelivering in New York and throughout the East Coast strike region.
In New Jersey, it promised in 1993 that by 2010, it would replace its aging copper network with fiber capable of 4.5 Mbps in both directions; in Pennsylvania, in 1995, it promised to have the state completely upgraded by 2015; in Massachusetts, it promised to start its conversion in 1996. For each state, by 2015, Verizon had passed somewhere around 40 to 50 percent of state homes, regardless of previous commitments. In Pennsylvania, in 2009, it promised to delivery 4G LTE downstream at speeds of 100 Mbps, but in 2015, it provided services at about 10-12 Mbps.
Verizon is a very profitable company -- and its customers are paying for it. It reported 2015 revenues of $131.6 billion and $17.9 billion in profits. In 2015, Verizonsold off $15 billion of its assets and bought back $5 billion of its stock -- all to goose the stock price and increase the bonuses of top management.
Its solid performance was based on a series of clever financial and business practices:
- It shifted more customers from regulated wireline services to unregulated wireless services;
- It periodically secured rate increases for the delivery of inferior wireless services;
- It successfully failed to fulfill ostensible "promises" to upgrade its networks;
- It successfully underpaid its taxes; and
- It underpaid and outsourced its workforce.
"From 2008 to 2013, while Verizon made over $42.4 billion in U.S. profits, it received a total tax refund of $732 million from the IRS."
"Verizon's effective U.S. corporate income tax rate over this six-year period was -2 percent. In 2012, Verizon stashed $1.8 billion in offshore tax havens to avoid paying U.S. income taxes."
since 2003, Verizon has used clever dodges to avoid paying its fair share of New York State taxes. "Based on the Verizon NY annual reports, the losses are staggering, and there has been no public outcry, even though these losses were used to raise rates multiple times,"
Verizon is a large company and its [New York State] revenues were $659 billion for these years, as told by the annual reports. Verizon, therefore, paid an effective tax rate of 1/2 of 1%.