Several of us were drawn to the office windows beyond cubicles overlooking the intersection of 14th Street and H Street Northwest in downtown Washington D.C. On June 12, 2012, more than a hundred D.C. residents had marched down the street in a New Orleans funeral-style protest organized by non-profit group OurDC the mission of which is to "ensure that every city resident has a Good paying job, a Good benefits package, and Good working conditions so that all District families can live Good successful lives" (http://thisisourdc.org/). The procession was complete with masks, jazz music, dancing, a woman on stilts, and a grim coffin to symbolize the hopeful burial of Pepco's $42.5 million energy rate hike (1).
The Corporation, Pepco
Pepco, the Potomac Electric Power Company, is the principal supplier of electric energy in the District. In a recent stockholder's meeting report issued to the Securities and Exchange Commission, the company revealed that CEO compensation increased from $3.6 million to $7.2 million from 2010 to 2011. The total compensation for the top executives in 2011 exceeded $18 million (2).
These figures would suggest straightforward growth for the company, but the matter is complicated in light of the headline of a recent Associated Press release which reads "Pepco 1Q profit rises 6 percent, but revenue falls." Indeed, lower taxes allowed the company to recover from a 21% drop in revenue ($1.63bil to $1.29bil) attributed to mild winter weather causing a decline in electricity usage. In just one year, the company's tax expenses fell from $34 million to $14 million (3).
These figures seem really quite silly for a company that was named America's most hated company by Business Insider almost a year ago. It beat out Delta Air Line, Facebook, and UnitedHealth which is an impressive feat for a regional outfit that affects only Washington D.C. and nearby Maryland communities. It's a reasonable distinction, however, given that a nationwide survey revealed that Pepco's service caused 70% more power outages than equivalents in other big cities. Furthermore, the outages lasted more than twice as long.
To be sure, the consequences can be severe. Norma Jackson, a 76-year-old resident of a retirement community in Silver Spring, MD, almost died during a winter outage that lasted more than three days. She was hospitalized for over a month and subsequently required dialysis treatments three times per week.
The great need for infrastructural improvements is readily apparent. Pepco's poor quality alarmed Maryland governor Martin O'Malley so much that he felt compelled to publicly condemn Pepco in 2010 and describe the situation as "totally unacceptable." He called for an investigation into Pepco's response times and noted that "power stays on more consistently in many developing nations than it does now in the communities surrounding our nation's capital" (4).
Pepco has consistently blamed trees as the primary cause of power line disruption. However, a Washington Post analysis revealed that equipment failures were far more frequently to blame than tree fall. And indeed, Bill Gausman, the senior VP for strategic initiatives for Pepco Holdings Inc., acknowledged in 2010 the need to spend more money. However, he asserted that "Ultimately, the public will have to pay for these improvements" (5).
The Public, Washington D.C.
Sure enough, two years later in 2012, Pepco is attempting to have the public foot the bill for a $42.5 million rate hike. D.C. residents have taken to the streets continually ever since with the most recent occasion taking place on June 12 by OurDC. Their mission against Pepco has clear parallels with the general ethos of the Occupy movement and it's undeniable that they have benefited from the expansion of public consciousness brought about by OWS.
James Adams, a leading organizer for OurDC, acknowledged previous collaborations with the Occupy movement and common perspectives regarding the "fractured morality of the corporate boardroom." The two groups temporarily consolidated during a November 2011 march on Francis Scott Key Bridge in a brilliant display of solidarity and organization. The purpose of the protest was to "call on Congress to create jobs, stop cuts, and make Wall Street banks pay," according to the OccupyDC website.
However, according to Adams, OurDC membership demographics exclude it from employing the same tactics as Occupy. The supporters are unemployed, but with families. As such, there's no option to partake in park campouts or face imprisonment. Nonetheless, given the recession-era burdens of unemployment, the protestors cannot afford to take on the burden of a $42.5 million rate hike while Pepco's top executives are experiencing similar scale pay increases.
While conservatives celebrate the corporation as the center of job creation, Pepco cut its workforce by 40% over the past decade which no doubt contributed to D.C. unemployment. And of course, any company that can cut labor expenditures while maintaining profit margins will attract investors regardless of product/service quality. The only sector left to provide work is the local government which ends up offering tax relief to Pepco and thus drains the revenue well that could be used to create jobs.
The racial implications of such revenue drain are devastating, but not unexpected. A recent NY Times article noted that Blacks are hit the hardest by job reductions in the public sector given that one in five black workers have public sector jobs (6). The article highlighted the illusory nature of the American dream. Since the decline of manufacturing in America and the dramatic rise of black incarceration as a function of disastrous drug policy since the 1970s, the public sector has been the principal means to a decent middle class life for African-Americans. The immediate effects of its decline are predictable.
Furthermore, it's had an extreme racial component particularly in D.C. where the Pepco protests are taking place. Research from the Economic Policy Institute revealed that the 2011 4th quarter unemployment rate in D.C. was 20.3% for Blacks and 3.3% for Whites. Unfortunately, this sort of inequality is a dramatic example of a national trend that is bound to reinforce itself due to the personal consequences of class warfare that don't even involve race.
"Pepco earns millions of dollars and pays its shareholders big checks while asking me, an unemployed mother who's looking for work to pay more to keep my lights on," laments Pepco customer Ashley Howard. "I feel like Pepco's on welfare and I'm paying to put food on a millionaire's table. It's greed."
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