Garbage In, Garbage CEO Windfalls Out

We’re drowning in garbage. In 2020 alone, the World Bank calculates, some 2.24 billion additional tons of waste piled up around us, creating “serious health, safety, and environmental consequences.”

How we handle solid waste, adds one World Bank environmental specialist, will play “an important role” in everything from “providing sanitation for all” to “reducing climate change.”

But getting that “important role” right won’t be easy. To significantly roll back the garbage tide, a wide variety of players — from inside and outside the world of waste — will have to set aside their narrow self-interests and work together on behalf of the public good. Unfortunately, in waste management as in so much else, the tide is still recklessly rushing toward ensuring private gain.

How much private gain? Business analysts at Waste Dive have just released their fifth annual survey of top executive compensation at the North American waste and recycling corporations that trade on Wall Street. That pay, Waste Dive reports, “continued to rise in 2022.”

The CEO at WM, the Houston-based Waste Management Inc., pulled down $14.8 million for the year. That chief exec, Jim Fish, generously donated $100,000 — 0.6 percent of his 2022 compensation windfall — “to fund a scholarship program for children of Company employees.”

The CEO at another flashy waste industry corporation, Rubicon’s Nate Morris, stepped down from his top-exec slot this past October, but not before flashing quite a bit past Fish. For his executive labors helping the world pick up trash, Morris collected last year just under $41 million in compensation.

Once upon a time, not all that long ago, absolutely no one working in waste circles took home compensation anywhere near all those millions. In the middle of the 20th century, most “waste management” efforts operated as core public services funded by public tax dollars.

But the political squeeze on those dollars — a squeeze bankrolled in large part by rich people desperate to pay a lot less at tax time — would soon have growing numbers of municipalities contemplating pitches for privatizing their public trash pick-up.

Privatization, power suits declared, could save local governments anywhere from 20 to 40 percent off what they were spending on trash. Those sorts of numbers turned plenty of heads in city council chambers. By 1985, 30 percent of U.S. cities had gone private for trash collection. By 1995, 50 percent.

The privatization deals these local governments cut looked like genius early on. The first contracts localities cut with privatizers often did bring cost savings, and local officials found they could save even more by selling off their trucks and other equipment to the private companies doing their trash.

But familiarity would soon start breeding contempt. The more privatizing, the more second thoughts on the part of public officials.

One example: In Illinois, Bloomington city council members started looking at privatizing options when they faced a serious deficit in an upcoming annual budget. They then backed off on that interest after learning more about how privatization was actually working.

“A vendor will come in and get the contract, but the next time there is a contract to negotiate, the price goes up significantly,” Jim Karch, Bloomington’s director of public works, would explain to a correspondent for The Municipal magazine. “Then the municipality does not have a choice because it has gotten rid of its equipment.”

Privatizations, The Municipal would note, can have downsides beyond higher costs. Privatizing previously public garbage services can lead to “diminished accountability for officials, compromised services due to the provider’s profit motivation, and lower morale for municipal workers with an increased fear of layoffs and displacement.”

We can add greater inequality to that list of negatives, both a greater gap between executive and worker pay within the waste industry and greater pay gaps within the ranks of industry workers themselves.

Why the pay gap within worker ranks? In communities with strong labor movements, unionized waste workers have been able to either keep waste management a public service or raise wages at private firms. Localities in states with no significant union presence have had no such luck.

The result? In states like Mississippi and North Carolina, the U.S. Bureau of Labor Statistics reported last May, workers in waste operations make under $37,000 a year. In New York State, waste workers annually average over $64,000.

The private corporations responsible for those rock-bottom wages, meanwhile, have spent the last few years lamenting a “labor shortage” in their industry. Chuck Stiles, the Teamsters union director for solid waste and recycling, calls that lament “a desperate attempt to save face and hide the hard truth” that workers are exiting the industry because “disrespect and poor working conditions” have them tired and fed up.

“Years of mergers and acquisitions have not made working conditions any safer or fairer, and they surely haven’t been to the benefit of workers’ well-being,” says Stiles. “Rather than focus on another year of record profit and short-term greed, waste companies should invest in their workers.”

But those mergers and acquisitions continue, the latest coming just earlier this week with the takeover of the Michigan-based Titan Trucking, a company that had itself last year gobbled up two other firms. One telling sidebar to this latest takeover: A federal court five years ago sentenced Titan’s previous CEO to 66 months in prison — and an additional $4-million penalty — after his conviction for bribing township officials to win a 10-year garbage contract extension.

Bribes. Endless acquisitions. Worker exploitation. What else should we expect when we have top execs chasing after mega-million paydays? We need to make those paydays impossible. And we can. Garbage in doesn’t have to generate garbage out.

Sam Pizzigati co-edits Inequality.org. His latest books include The Case for a Maximum Wage and The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Twitter: @Too_Much_Online.