Palermo’s Pizza, where workers have been on strike since June 1 protesting unfair labor practices, has received some $26 million in local, state and federal funds since 2005. The majority of funds were earmarked for job creation and economic development. But a new report from the AFL-CIO Center for Strategic Research finds little evidence Palermo's has kept its word.
Released today in Milwaukee, “Too Much Pork in the Pepperoni Pizza?” finds that because of the lack of transparency and accountability on the part of Wisconsin Economic Development Corp. (WEDC), which administered much of Palermo’s corporate welfare, “We can’t know whether Palermo’s has kept its promise.”
The WEDC disclosure report on Palermo’s was so heavily redacted it was impossible to know if the company met its job creation benchmarks, what the new jobs were that Palermo’s claimed tax credits for and if those jobs met the full-time, permanent wage specifications the company committed to.
It is impossible to glean from this report how many new jobs Palermo Villa created in 2011; for how many jobs the company is claiming a tax credit; how many of the employees listed truly were new hires and therefore qualified for tax credits; and how many of these jobs meet the full-time, permanent status or wage requirements stipulated in the company’s agreement with the WEDC.
The $26 million in public subsidies includes $12 million in construction loans and $14 million in public bonds.
At the press conference in the Milwaukee City Hall announcing the report’s findings, Julie Farb Blain from the AFL-CIO Center for Strategic Research said:
Palermo’s appears to employ fewer people today than it did before it qualified for almost half a million dollars in job creation tax credits with a promise to create 56 full-time, permanent positions.
The WEDC requires that employers pay at least $10.88 an hour to qualify for job creation tax credits. Even that is below the $14.06 that is considered the family-sustaining wage for the Menomonee Valley area where the plant is located and most of its workers live.
While the WEDC report didn’t provide the information to verify Palermo’s wage claims, an examination of pay stubs from 55 recent employees shows an average wage of just $10.55 an hour, with half earning less than $10 an hour. Flora Anaya told reporters:
I worked at Palermo's for over 5 years and only earned $7.50 the hour. That is not a living wage. I couldn’t support my children and sick parents with so little.
The striking workers are seeking union recognition and reinstatement after Palermo’s fired more than 75 workers. Many workers at Palermo’s face serious health hazards, have no sick days and make little more than the minimum wage.
Read the full "Too Much Pork in the Pepperoni Pizza?” report. Tomorrow, the report will be presented to the Wisconsin Joint Legislative Audit Committee.
Milwaukee Area Technical College economics professor Michael Rosen says:
Palermo will be used as a prime example as a company that has received significant public subsidy and yet they’ve not been held accountable for how they treat their employees.
Read www.aflcio.org/palermostaxcredits for more info.