Defective Enterprises

From Inequality, We Can’t Take a Vacation

‘A million ways to have fun,’ goes the cruise ship marketing slogan — but only, the fine print should read, for those who have mega millions.

By Sam Pizzigati

The Carnival Triumph/AP/U.S. Coast Guard-Lt. Cmdr. Paul McConnell

The Carnival Triumph/AP/U.S. Coast Guard-Lt. Cmdr. Paul McConnell

Just over a year ago, the Costa Concordia, an ocean liner that belongs to Carnival Cruise Lines, ran aground on an Italian sandbar. Thirty-two died.

“We expect to fully recover from the ship incident,” the subsequent Carnival 2012 annual report told shareholders.

Earlier this month, Carnival suffered another “ship incident.”

The Carnival Triumph, with over 4,200 passengers and crew onboard, lost all power after an engine fire. The ship drifted aimlessly in the Gulf of Mexico for days, with toilets overflowing and food rotting. Raw sewage spilled into cabins and passageways. Passengers would later describe “an overpowering stench.”

Carnival CEO Micky Arison never caught a whiff of this stench. He stayed far away. In fact, two days after the fire, with the Triumph still stinking, Arison showed up courtside in Miami to watch his beloved Miami Heat do basketball battle. Arison owns the Miami Heat.

Arison owns a great many things. This past September, the business magazine Forbes put his total personal fortune at a clean $5 billion.

Last year, after the 32 tragic deaths about Carnival’s ill-fated Costa Concordia, Arison displayed a rather similar cavalier disregard for his passengers’ welfare. He never showed up at the disaster scene in Italy either.

Carnival would go on to offer the 3,200 passengers who survived that disaster a refund, travel expenses, and a bit over $14,000 each. Some perspective: The entire bill for the $14,000 checks — about $45 million —  amounts to less than 1 percent of Carnival CEO Arison’s personal net worth.

Cruise ships have made Micky Arison a billionaire five times over.

The Carnival passengers who experienced this month’s unpleasantness have received an offer that makes the Costa Concordia compensation seem downright generous. Passengers who waded through sewage on the Triumph for five days will get a refund, free rides home, a credit toward a future cruise, and $500. They also get a complimentary bathrobe.

More perspective: Under U.S. Department of Transportation airline regulations, passengers denied boarding on an oversold flight get up to $1,300 if the delay to their final destination costs them more than four hours.

Cruise giants like Carnival essentially don’t face many regulations with that sort of bite. In fact, they face relatively few regulations at all. In a U.S. port, cruise ships do fall under U.S. Coast Guard jurisdiction. But on the seas, as U.S. Senator Jay Rockefeller noted after the Triumph episode, “the world is theirs.”

An international maritime organization does, to be sure, exist. But its guidelines don’t carry the force of law. Corporations can violate these guidelines, points out maritime legal expert Jim Walker, and face no real consequences.

Cruise corporations have also made sure that any standards on the books only serve for show. All cruise ships, for instance, must now have auxiliary power systems to maintain propulsion and basic passenger services should a fire knock out the main power system, the fate that befell the Carnival Triumph.

This standard, rather conveniently, only applies to ships built after July 1, 2010 and doesn’t cover the Triumph, built in 1999, or just about every other cruise liner on the seven seas.

Cruise ship corporations operate in a largely unregulated environment.

All these ships could, of course, retrofit to meet the new 2010 safety rule. But that retrofit would make a dent on their corporate profit margins.

And billionaire Carnival CEO Micky Arison doesn’t like to see anything dent his profit. Especially taxes.

Over the previous five years, Senate Transportation Committee chair Jay Rockefeller revealed at a 2012 hearing, Arison’s Carnival Corp. paid just 1.1 percent of its $11.3 billion in profits in combined local, state, and federal taxes.

Dodging taxes and safety regulations certainly does help keep the dollars cascading into the pockets of top cruise industry execs. But you don’t get to become a billionaire just by stiffing Uncle Sam and skirting safety regs. Execs like Arison also never miss an opportunity to nickel-and-dime at passenger expense.

Carnival and other cruise giants have been busily inventing new service fees to tack on passenger bills, $50 charges, for instance, for early boarding. Passengers on cruise liners used to have access to any on-board restaurant without paying anything extra. Now they pay extra if they want anything besides a buffet.

Sign up for To MuchAll cruise ship passengers, of course, have at least a basic level of personal affluence. Whatever shipboard indignities they suffer, in the end, pale against the indignities so many millions of families suffer today, on a daily basis, in Great Recession America.

But symbols do matter — and what more vivid symbol of the indignity our contemporary corporate-driven inequality imposes than the Carnival Triumph. Thousands of people adrift, going nowhere in a nightmare of sewage and stench, while a billionaire chief exec sits far away in a courtside seat and cheers.

Veteran labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, has just been published.

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