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Horrible Bosses
Horrible Bosses
Paul Waldman
Some employers are defending their cuts to employee wages and benefits by blaming the Obamacare bogeyman. That's just plain hogwash.
Do you believe everything your boss tells you? The answer probably depends—if he tells you the Cubs are going to win next year's World Series then maybe not, but if he tells you your benefits are being cut and explains the reason why, you'll probably take him at his word...But Tim Armstrong, the CEO of AOL (company motto: "More Than Just Your Grandmother's Email, Really!"
must have thought his employees were pretty darn stupid when he told them last week that he was cutting their 401(k) contributions and blamed the change on the Affordable Care Act. He explained in an interview that the company had incurred $7 million in "Obamacare costs," whatever that's supposed to mean, and later complained that two employees who had "distressed babies" had cost the company $1 million each.
It's been said many times that once he passed significant health care reform, Barack Obama came to "own" the health care system, meaning he'd be blamed for every gripe anyone had about health care whether it had anything to do with his reform or not. And that is indeed happening. But it's not because of an instantaneous collective decision on the part of all Americans. It's because Tim Armstrong and thousands of other employers like him are doing everything they can to convince workers that their stagnant wages and shrinking benefits aren't the fault of the people who actually set those wages and benefits. This isn't just about who "owns" the health care system, it's about power and accountability in the workplace.
Armstrong happens to lead a high-profile company, and he quickly became the target of mockery and outrage over his move, since his explanation for the 401(k) cut was so plainly ridiculous. If by "Obamacare costs" he meant rising health premiums, well that's something you can't blame on the President. In fact, premiums have gone up every year since long before Barack Obama took office, and last year's increase for employer plans—4.8 percent for single coverage and 3.8 percent for family coverage, according to the Kaiser Family Foundation—was low by recent historical standards. And one presumes that if those two AOL employees had "distressed babies" five years ago, the company's insurance would have paid for their care, and that wouldn't have been Barack Obama's fault either.
Not only that, the $7 million in supposedly crippling health care costs that left the company no choice but to cut retirement benefits just happens to be exactly half of Armstrong's average yearly compensation of $14 million for the years 2009 to 2012. Needless to say, he didn't offer to take a pay cut to improve the bottom line—that kind of thing is for the common folk. But all the bad publicity took its toll, and by the weekend he reversed the decision. Given that the company just had its best earnings quarter in a decade, they can afford it.
- more -
http://prospect.org/article/horrible-bosses
Paul Waldman
Some employers are defending their cuts to employee wages and benefits by blaming the Obamacare bogeyman. That's just plain hogwash.
Do you believe everything your boss tells you? The answer probably depends—if he tells you the Cubs are going to win next year's World Series then maybe not, but if he tells you your benefits are being cut and explains the reason why, you'll probably take him at his word...But Tim Armstrong, the CEO of AOL (company motto: "More Than Just Your Grandmother's Email, Really!"
must have thought his employees were pretty darn stupid when he told them last week that he was cutting their 401(k) contributions and blamed the change on the Affordable Care Act. He explained in an interview that the company had incurred $7 million in "Obamacare costs," whatever that's supposed to mean, and later complained that two employees who had "distressed babies" had cost the company $1 million each.
It's been said many times that once he passed significant health care reform, Barack Obama came to "own" the health care system, meaning he'd be blamed for every gripe anyone had about health care whether it had anything to do with his reform or not. And that is indeed happening. But it's not because of an instantaneous collective decision on the part of all Americans. It's because Tim Armstrong and thousands of other employers like him are doing everything they can to convince workers that their stagnant wages and shrinking benefits aren't the fault of the people who actually set those wages and benefits. This isn't just about who "owns" the health care system, it's about power and accountability in the workplace.
Armstrong happens to lead a high-profile company, and he quickly became the target of mockery and outrage over his move, since his explanation for the 401(k) cut was so plainly ridiculous. If by "Obamacare costs" he meant rising health premiums, well that's something you can't blame on the President. In fact, premiums have gone up every year since long before Barack Obama took office, and last year's increase for employer plans—4.8 percent for single coverage and 3.8 percent for family coverage, according to the Kaiser Family Foundation—was low by recent historical standards. And one presumes that if those two AOL employees had "distressed babies" five years ago, the company's insurance would have paid for their care, and that wouldn't have been Barack Obama's fault either.
Not only that, the $7 million in supposedly crippling health care costs that left the company no choice but to cut retirement benefits just happens to be exactly half of Armstrong's average yearly compensation of $14 million for the years 2009 to 2012. Needless to say, he didn't offer to take a pay cut to improve the bottom line—that kind of thing is for the common folk. But all the bad publicity took its toll, and by the weekend he reversed the decision. Given that the company just had its best earnings quarter in a decade, they can afford it.
- more -
http://prospect.org/article/horrible-bosses
AOL CEO reverses benefits cut decision
by Joan McCarter
After making "distressed babies" into a derogatory hashtag overnight, and creating massive backlash among employees and in the media, AOL's CEO Tim Armstrong reversed course on the retirement benefits cut that started the fiasco. The company had announced that they were going to start paying out the company's contribution to employees' 401(k) plans in a lump sum at the end of the year. That could mean that employees stock gains during the year would be lost, and that people who left the company mid-year would lose out entirely. That's history.
Armstrong also apologized to his employees and to the families of the two "distressed babies" he brought up in the call as justification for this benefits cut. The mother of one of those babies (her husband works for AOL) wrote this article for Slate, blasting Armstrong.
Armstrong should be fired for that violation of his employees' privacy, or at the very least sued. What Armstrong still hasn't apologized for or explained is how in the hell, in a company with more than 5,000 employees, the health care costs of just two could be so expensive to the company. It's something that has had health care and insurance experts scratching their heads over since Thursday, and there's still really no way anyone can come up with to figure out how AOL's bill for two families could be so high. The only possibility is that Armstrong purchased completely junk insurance for the company, a decision that would have made headlines long before this story blew up. That scenario is highly unlikely, and AOL isn't releasing any information about how it provides health insurance.
Armstrong also didn't explain how Obamacare cost the company $7.1 million, his other justification for the benefits cut. There's nothing new in the law that has resulted in that massive of a new expenditure. Armstrong just made that up, because he's like so many asshole CEOs before him—blaming every business decision that is going to hurt workers but save the company a lot of money on Obamacare. But at least this one got publicly shamed for it.
http://www.dailykos.com/story/2014/02/10/1276482/-AOL-CEO-reverses-benefits-cut-decision
by Joan McCarter
After making "distressed babies" into a derogatory hashtag overnight, and creating massive backlash among employees and in the media, AOL's CEO Tim Armstrong reversed course on the retirement benefits cut that started the fiasco. The company had announced that they were going to start paying out the company's contribution to employees' 401(k) plans in a lump sum at the end of the year. That could mean that employees stock gains during the year would be lost, and that people who left the company mid-year would lose out entirely. That's history.
Armstrong also apologized to his employees and to the families of the two "distressed babies" he brought up in the call as justification for this benefits cut. The mother of one of those babies (her husband works for AOL) wrote this article for Slate, blasting Armstrong.
I take issue with how he reduced my daughter to a “distressed baby” who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting.
Armstrong should be fired for that violation of his employees' privacy, or at the very least sued. What Armstrong still hasn't apologized for or explained is how in the hell, in a company with more than 5,000 employees, the health care costs of just two could be so expensive to the company. It's something that has had health care and insurance experts scratching their heads over since Thursday, and there's still really no way anyone can come up with to figure out how AOL's bill for two families could be so high. The only possibility is that Armstrong purchased completely junk insurance for the company, a decision that would have made headlines long before this story blew up. That scenario is highly unlikely, and AOL isn't releasing any information about how it provides health insurance.
Armstrong also didn't explain how Obamacare cost the company $7.1 million, his other justification for the benefits cut. There's nothing new in the law that has resulted in that massive of a new expenditure. Armstrong just made that up, because he's like so many asshole CEOs before him—blaming every business decision that is going to hurt workers but save the company a lot of money on Obamacare. But at least this one got publicly shamed for it.
http://www.dailykos.com/story/2014/02/10/1276482/-AOL-CEO-reverses-benefits-cut-decision
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