Wednesday, July 13, 2005

Gross inequality

A good article on the rich getting richer, while the rest of us go begging for crumbs.

Posted from The Huffington Post.

No Justice, No Peace
by, Charlie Cray

Corporate executives and directors have once again flunked the "acid test" of corporate reform (as Warren Buffett put it), continuing to pay themselves an average of 289 times what the average employee took home last year, according to recent figures.

No matter what they say, this gross inequality has nothing to do with job performance or general prosperity (e.g. job creation) and everything to do with the ongoing epidemic of shameless war profiteering, outsourcing, and tax dodging that have fueled festering resentments across the rest of society.

Though you'd hardly think so, judging from the media's overall neglect of the issue, that resentment is deep and well-founded. After all, while worker productivity rose 78 percent between 1973 and 2004, the average employee's paycheck today is more than $3,000 less than it was during the Nixon administration (1973), when it was $36,629 (adjusting for inflation).

In those days U.S. CEOs made about 45 times as much as workers, according to pay expert Graef Crystal. And after President Nixon urged everyone to begin to "move from the era of confrontation to the era of negotiation," America's CEOs have waged a fierce game of class warfare ever since, even using that phrase (with its not-so-subtle Marxist connotation) to "whack-a-mole" any protestations of tax cuts for the rich or (horrors) proposals to ban stock option compensation, the steroids of corporate greed that led to so much book-cooking.

(If the media giants themselves weren't so blind to the issue, maybe they'd have invented a new vocabulary for the unprecedented "corpiracy" and "corporruption" witnessed in recent years.)

Can anything be done or should we wallow in that feeling of futility and junk food commercials in between episodes of "Lifestyles of the Rich and Famous"? (Even there the debate is warped. Maybe someone should remake that old Phil Silvers/Sgt. Bilko show, "You'll Never Get Rich.")

Of course, as is the case with just about every other issue having something to do with justice, Washington is usually the last place to look to for leadership on this issue. The living wage policies that have spread from city to city have, in fact, been the result of grassroots organizing led by groups like ACORN.

But there is one good idea that keeps coming up in Congress thanks to Rep. Martin Sabo. Today, Sabo re-introduced the Income Equity Act .

Sabo's 2005 bill would limit government subsidies of CEO excess by eliminating tax deductions for compensation that exceeds 25 times the company’s lowest paid full-time employee. (For example, if the lowest paid, full-time employee in a firm was paid $20,000, then the highest salary deduction that could be claimed by that firm would be $500,000.)

(To learn more about skyrocketing CEO pay and the effects it has had on the rest of American society, check out United for a Fair Economy, Greed and Good by Sam Pizigatti (the definitive book on CEO pay issues), The Corporate Library and Lucien Bebchuk's Pay Without Performance.

Oh, and to research a specific CEO's pay, check out AFL-CIO's Executive Paywatch page.

Charlie Cray the director of the Center for Corporate Policy in Washington, DC. He helped establish Halliburton Watch, and is co-author of The People's Business: Controlling Corporations and Restoring Democracy (Berrett-Koehler), and is a former associate editor of Multinational Monitor magazine.

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