PHOENIX - Working families trying to get out from under their debts don't get the help that corporations do from the bankruptcy laws, economists say. Some people in Arizona who have gone broke recently have asked about the difference between their situation and that of bankrupt companies.

According to Teresa Ghilarducci, chair of the economics department at the New School of Social Research, the laws governing corporate bankruptcy were written to be fundamentally different from consumer bankruptcy laws.

"Individuals responsible for the corporation are often protected from any of the costs, whereas an individual who gets into debt, they're presumed to pay most of the cost back," she said.

Ghilarducci said a 2005 law made it much harder for individuals to shed their debts. She said it was written on the assumption that people trying to do that had done something wrong, but the laws do not assume that about corporations.

"The bankruptcy laws presume that the individual was stupid or immoral," as she described the situation. "Corporations are presumed to get into bankruptcy situations through no fault of their own."

She said big increases in student-loan and housing debt were among the causes of the financial crisis. Some people in the banking and financial industries have said consumers should be held responsible for living beyond their means, but Ghilarducci said many companies actually count on using the bankruptcy system to shift their debts onto employees, retirees and taxpayers.

"Corporations often use bankruptcy in their business model," she said. "People who didn't have any role in the corporation bankruptcies actually often have to pay the price."

She noted that the laws were written by people who were fully aware of what they were doing, in a climate where some groups have much more power than others.

"The bankruptcy laws for individuals have been made more and more restrictive. Individuals don't have the lobbyists that banks or corporations have," she pointed out.

More than a million Americans declared bankruptcy in the fiscal year ending October 1, about 24,000 of them in Arizona.



get more stories like this via email

A new Washington law ensures employees quick access to their personnel files, which are necessary for many things including filing for workers' compensation and unemployment claims.

Employers must now provide copies of the files when requested within 21 days or face possible legal action.

Jesse Wing, an employment attorney in Seattle, noted under the old law, many employers ignored or restricted requests.

"There are even employers who are located in a different part of the state who say, 'if you want to drive here, you can sit in our conference room and look at the documents but you can't have a copy of them, we won't send them to you.' Which also can cause a lot of problems for employees who have disabilities,'" Wing explained.

Wing noted the new law took seven years to pass, largely because the business community voiced concerns about time-consuming document searches and possible sensitive employee information in the files. He countered digital files make retrieval quick and legally, employees already have access to their records.

Wing added a flood of lawsuits is unlikely under the new law, as they would offer little payoff and employers can avoid them simply by complying.

"What we really want is our clients to be able to get the documents that they need for all the myriad reasons that they need them," Wing stressed.

Wing pointed out the new law only applies to employees working in the private sector. Public employees have another mechanism to obtain their files. Although, he said, there have been problems with that system as well, so follow-up legislation may be needed.


get more stories like this via email

A groundbreaking radio show from the early 1990s is returning this weekend in Arkansas. The PHAT LIP! You(th)Talk Radio show will be back on the airwaves Saturday on KABF 88.3 FM Community Radio in Little Rock.

The show, produced by Washitaw Foothills Youth Media Arts and Literacy Collective, features young people ages 16 to 24.

Director Kwami Abdul-Bey says the broadcast gives teens and young adults a chance to express their feelings about a variety of topics.

"We want all young people involved in the conversation, so you'll be hearing what they have to say particularly as it has to deal with civic engagement and electoral justice," he said.

The show will air from 3 p.m. to 5 p.m. the first and third Saturday of each month, and is also available on KABF.org and through the Shortwave Relay Service.

The talk show is funded by a three-year grant. Some of the topics the students want to address are medical and student debt and funding cuts for social programs.

Jasmine Serrano, a show host, is a junior at Jacksonville High School in Jacksonville, and said she got involved with the project after speaking to members of the Arkansas Legislature.

"In society, we always look at the adults and we always look at the older folks and generations, but we don't really take the time to pay attention to how the current policies and societal perceptions are impacting youth," Serrano explained.

When Abdul-Bey started the original show in 1994, he said it was in response to a documentary that painted Arkansas youth in a bad light. His seventh-grade social studies students wanted to combat the negative stereotypes. He noted the name of the show reflects the music of the times.

"One of my favorite hip-hop artists back in the 1990s was Fat Lip from Digable Planets," he continued. "And 'pfat' at the time was something that was cool, something that was vital as far as the culture was concerned. And 'lip' just means you talk too much."

Reports of the Trump administration considering taxing wealthy Americans to pay for mass deportations and other priorities come on the heels of a new study showing how the move could generate significant revenues without slowing economic growth.

Mary Eschelbach Hansen, associate professor of economics at American University and the report's co-author, said raising tax rates for people who earn more than $609,000 a year to 44% would add 3% to the nation's tax coffers, enough to stave off cuts to popular programs serving low-income Coloradans.

"In current budget proportions, that's about enough to pay for some of the biggest, most important programs like food stamps SNAP, Children's Health Insurance Program, and also Temporary Assistance for Needy Families," Eschelbach Hansen outlined.

While 44% may seem high compared to today's top rate of 37%, it is a lot less than the 92% paid by people who earned more than $400,000 a year under Republican President Dwight D. Eisenhower. Republicans have long argued tax cuts create economic benefits for all, and leaders in Congress, including Rep. Mike Johnson, R-La., the House Speaker, have said they would oppose any tax hikes.

Eschelbach Hansen argued raising the top tax rate would also increase how much of the national income pie most Americans get to keep, compared to how much the wealthiest get, by about 2%. She added years of trickle-down economics have shown only the wealthy benefit from low tax rates.

"If lowering top tax rates was going to trickle down, then you and I would be much richer than we are now," Eschelbach Hansen pointed out. "Because we have had an era of low top tax rates for decades."

Eschelbach Hansen stressed higher personal tax rates have virtually no impact on long-term economic growth, and lower personal tax rates lead to less economic growth, because people tend to take advantage of the lower rate by moving their income.

"Instead of reinvesting it in your business, where it will grow your business and grow the economy, you'll be more likely to just take it as personal income, which is not going to stimulate growth," Eschelbach Hansen explained.


get more stories like this via email