The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

High-tech Capital of the World Wants to Cut Worker Benefits

Sep 30, 2013

San Jose officials want to cut the city workers’ pensions and healthcare.

Last year, the city passed a referendum to make current workers pay more toward their pensions or accept much lower pensions. The city would also introduce a second tier for new city workers involving much lower pension and health benefits. These are in fact pay cuts for the city workers.

San Jose is the third largest city in California and so-called “Capital of Silicon Valley” that claims to lead the world in “High-Tech” companies. All “rich and famous” companies that invade our daily lives – Apple, Facebook, Intel, Microsoft, Yahoo, Google, Cisco Systems, Hewlett-Packard – you name it, they are located in Silicon Valley. Yet the City of San Jose claims that they don’t have enough money for the pensions and healthcare. What a crock!

If there is a budget problem, these incredibly successful companies are the culprits, because these cheap-skates pay little or no taxes. The 47 largest tech companies avoided paying any taxes on much of their earnings simply by claiming that these earnings are kept outside the U.S. To avoid taxes, Apple went so far as registering itself as an Irish company!

If such tax avoidance schemes are not enough, the City of San Jose provides “Financial/Tax Incentives,” according to the city’s website. These “Tax Incentive” schemes include the “Business Cooperation Program,” which provides businesses a rebate of up to 30 per cent on the local portion of the state collected use tax; the “Enterprise Zone,” which provides a variety of state income tax credits to support the continued growth of a business, including handing over $37,000 to the business for each new hire over a five-year period; and the “Foreign Trade Zone,” which allows a business to delay, reduce or eliminate customs duties on imported goods.

To provide these enormous gifts to business, the city cut services, closed libraries and community centers, laid off workers, reduced their salaries by 10 per cent a few years ago, left new facilities unused due to lack of staff, and did not repair potholes on the streets.

But San Jose politicians try to blame workers’ pensions and healthcare for causing these cuts!

How dare they!