Chairman Miller Criticizes Circuit City for Firing 3,400 Workers In Order to Hire Lower Paid Replacements
Company's Decision Comes at Same Time as Release of New Independent Analysis Showing Skyrocketing Income Inequality in U.S.

Thursday, March 29, 2007

WASHINGTON, DC -- U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, issued the following statement today on two related economic developments -- the decision by Circuit City to fire 3,400 employees and replace them with new employees at a lower wage rate and the news that U.S. income inequality has reached its highest level in nearly eight decades.

"Just today we learned that income inequality in the United States grew significantly in 2005, reaching a level not seen since the late 1930's. We have years of misguided Republican policy to thank for part of that. We also have the actions of shortsighted companies like Circuit City.

"Let's get one thing straight: the workers fired by Circuit City were not overpaid. According to the Washington Post, one worker who lost his job was making roughly $12 per hour. A full-time worker making $12 per hour would earn about $24,000 a year. That's barely enough to pay the bills.

"Meanwhile, Circuit City's six top executive officers brought home a total of roughly $16 million in salaries and bonuses from 2004 to 2006. Clearly, workers who had been loyal to the company for years and who earned $12 per hour were not the ones who were overpaid. Circuit City's actions are reprehensible. Loyal workers who devote years of service to a company deserve to be treated with dignity and respect.

"Growing income inequality is a threat to our economy, our stability, and our democracy. In Congress, we are committed to reversing Republican policies that have exacerbated inequality. But it's time for corporate executives to treat their workers with some basic dignity and respect."

Background:

Based on company filings for fiscal years 2004 through 2006, Circuit City's six highest-ranking corporate officers received almost $16 million in salary and bonus payments. They were also awarded over $17.5 million in restricted stock during those years, for a total of roughly $33.5 million from 2004 to 2006, enough to pay three years' worth of wages for almost 450 full-time employers earning $12 per hour.                                                                                                                 

According to today's New York Times, Professors Emmanuel Saez of the University of California at Berkeley and Professor Thomas Piketty of the Paris School of Economics analyzed data from the U.S. Internal Revenue Service and found, among other things, that the wealthiest 300,000 Americans together earn almost as much income as the bottom 150 million Americans. Click here to see their analysis.

FOR IMMEDIATE RELEASE
Contact: Tom Kiley / Rachel Racusen
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