Pay CEOs Less, Minimum Wage Workers More
Minimum wage workers made $5.15 an hour when Harry Potter became a sensation a decade ago, and nothing more until July 24, three days after the final Harry Potter book release.
The same year Harry Potter and the $5.15 minimum wage made their debuts, in 1997, Business Week declared CEO pay was “Out of Control.” Since then, CEO pay has gotten more out of control.
Average CEO pay at the top 500 companies jumped 38 percent to $15.2 million in 2006 — the year we broke the record for the longest period ever without a raise in the federal minimum wage.
The July 24 minimum wage increase from $5.15 to $5.85 is so little, so late, that the minimum wage is still worth less than it was back in 1997, when it was $6.67 in today’s dollars.
Minimum wage workers had more buying power when Wal-Mart founder Sam Walton opened his first Walton’s 5 & 10 in 1951.
CEOs make more in 90 minutes than minimum wage workers make in a year.
The two longest periods in history without a minimum wage increase have occurred since 1980. Those long draughts without a raise have left minimum wage workers in the dust.
In 1980, the average CEO at a big corporation made as much as 97 minimum wage workers. In 1997, the average CEO made as much as 728 minimum wage workers.
Last year, CEOs made as much as 1,419 minimum wage workers.
“As the productivity of workers increases, one would expect worker compensation to experience similar gains,” a 2001 U.S. Department of Labor report observed.
Instead, the gains have gone to record-breaking profits, CEOs and other have-mores.
Between 1980 and 2006, worker productivity went up 70 percent, average worker wages went nowhere, the minimum wage fell 32 percent, and domestic corporate profits rose 256 percent, adjusting for inflation.
A red light for minimum wage was a green light for accelerating greed.
Adjusting for inflation, men in their thirties make less today than their fathers’ generation made in the 1970s.
It’s time to stop overpaying CEOs enough to keep their families rich for many generations to come at the expense of workers paid poverty wages today.
Even the state with the highest minimum wage, Washington at $7.93, doesn’t match the buying power of the federal minimum wage at its peak in 1968. Worth $9.56 in today’s dollars, the 1968 minimum wage was more than $2 higher than the scheduled raise in the federal minimum wage to $7.25 on July 24, 2009.
Too bad we can’t use Hermione’s magical Time-Turner to send the minimum wage and CEO pay both back to 1968.
The minimum wage sets the wage floor. If the minimum wage had stayed above $9, Wal-Mart and McDonald’s, our nation’s largest employers, couldn’t routinely pay wages much lower.
Wal-Mart’s wages would be closer to Costco, which pays starting wages over $10 an hour. Costco CEO Jim Sinegal has long asserted, “Paying your employees well is not only the right thing to do, but it makes for good business.”
McDonald’s starting wages would be more like In-N-Out Burger, which has a minimum wage of $9.50 an hour and has long ranked first or tied for first nationwide among fast food chains in overall excellence.
Our nation’s minimum wage would be closer to Harry Potter’s U.K., where the minimum wage already tops $10, child poverty rates have fallen sharply, and the economy is stronger than ours.
Overpaying CEOs and underpaying workers is bad for business. Studies show that showering stock options on chief executives lowers shareholder returns, and increases the likelihood companies will cook their books, default on debt and go bankrupt.
Higher worker wages benefit business by increasing consumer spending, reducing costly employee turnover, raising worker morale and productivity, and improving product quality and company reputation.
In the words of Gary Theilen, owner of Theilen Farm and Cattle in Enid, Okla., “As a small-business owner who has always paid well above the minimum wage, it has been my experience that paying living wages makes good business sense. It is good for business, workers and the community.”
Theilen has joined business owners from across the nation in endorsing higher minimum wage at Business for a Fair Minimum Wage (www.businessforafairminimumwage
Paying workers enough to live on is the minimum employers should do.
Holly Sklar is co-author of “A Just Minimum Wage: Good for Workers, Business and Our Future” and “Raise the Floor: Wages and Policies That Work for All of Us.” She can be reached at hsklar@aol.com.
Distributed by McClatchy-Tribune News Service
Copyright (c) 2007 Holly Sklar
The minimum wage in this country is a disgrace. The people I work with make more than the minimum wage, around $13.88 an hour, that’s what I earn and you know what, I can’t live on it. I have to work nearly 10 hours overtime every week just to survive. The low paid woman I work with (the men are paid good wages while the women struggle on poverty wages) either work a lot of overtime at time and a half or have another job. Minimum wage should be $15 an hour.
We need to cut the earnings of CEOs, CFOs, CEEs, Presidents, Vice Presidents and Corporate officers. We need to change the “person” status of corporations and make corporations responsible to their workers and to consumers not to shareholders.
What we really need is a redistribution of wealth and power in this country. Give it to the people where it belongs.
An excellent summary… thank you. Everyone, employees, employers and investors, would benefit if these ideas were adopted. Already, some big pension funds are stirring the excessive CEO pay pot. Here’s hoping….
Note to employers: you do not need permission from the government to pay your workers at least a survival wage. Grow up and stop waiting for daddy to tell you to do the right thing.
“Pay CEOs Less, Minimum Wage Workers More”
No free trade market is ever going to fix this inequity (cf. article). The increasing differences between rich and poor nationally and internationally can only be brought within reasonable, sustainable limits by strong effort of will by the well enough informed. That will take deliberate decision by enough people - and it’s getting there. In earlier times it was called “revolution”.
This current “free market”-created inequality is both disgusting and destructive.
The superrich must be killed, in the sense of being abolished as a class by the same force of tax-law making that is now creating them. As must the suprapoor.
We’re hardly even able to THINK from one extreme to the other - from the poorest person’s circumstances to the richest person’s. (Can you? See them in your mind’s eye side by side, talking about their experiences with life in the world, chatting about how grand life is and how lucky we all are to have gotten it for free?). The disparity is simply too incomprehensible.
No one half-serious about any feeling of social or ecological responsibility can avoid supporting better equality in the world. The inequality in the world is led and justified by the USA and its clamor for the beguiling but false notion of “free trade”.
“Free trade” is never free, as the frames for trade are set by the strongest trader. The frames and conditions for trade therefore must be open, transparent and explicit. Simply referring to trade-frames as “free” is a seduction with the buzz-word ‘free’. Free trade is a lie.
I forgot to mention in my last entry, the wage I make, $13.88 an hour is for the 3 jobs the company I work for forces me to do. I live Michigan where finding a new job is almost impossible. This is the policy of the company I work for: Periodically this company lays a lot of people off. The workers call it “Black Fridays”. Then the company gives all the work, that the laid off people used to do, to those who escaped lay offs “this time”. It works well for them. They can pay low wages and keep people scared to death they may lose their jobs.
To make a long story short, I have been working for this company for a little over a year and since the big lay off back in September 2006, my jobs are as follows: Executive Assistant to the CFO, Accounting Assistant, and Credit Application Analyst. I tried in vain to get some, any, compensation for being forced to take on another full time job on top of the full time jobs I already had. I did comparative wage studies. I detailed every single job function I do. I called meetings. I wrote it all down on my futile self evaluation. It did no good. I wasn’t even asking for what my research showed I should be making. All I wanted was a 20% increase for taking on 100% of a full time job in addition to the jobs I was already doing.
I was told, back in January 2007, by the CFO, that their might be “some hope for me” because he was going to ask Human Resources to re-evaluate my position(s). In April 2007 I asked about it and was told he (the CFO) was still waiting to hear from Human Resources. After I asked about it I got the cold shoulder for quite a long time. It’s almost the end of July and I’m still waiting to hear. Well, I’m not really waiting. I know it will never happen. I do, however, continue to try to find a much better job.
Gee, Holly, you mean all we need do is cut CEO salaries and pay workers more? That’s far too simple. Perhaps we could eliminate taxes for these CEOs and their businesses so that they could create more jobs and pass more money down to those working for them. We could call it trickle-down economics. Wouldn’t that be something!
The site:
http://www.inequality.org/
has information on the distribution of wealth in this country. Click on “By the Numbers”. The top 1% have over one-third of the wealth, the next 9% another one-third, and the bottom 90% have less than 30%. The numbers are from 2005. Things are probably worse now.
When economic justice prevails, we will see the end of immoral profit levels and uber-capitalism run-amok. The poor will be well cared for, the middle class will thrive and rich will be at peace.
As Paul Wellstone once said, “We need to stop helping the rich and start helping the poor. The rich DON’T NEED our help. We are obliged to help the poor, they are ones that need our help.”
The headline says it all so well! Anyone for class warfare? There are more of us than there are of them!
While a high minimum wage to put a worker above the poverty-line is a good idea, I have wanted a maximum wage law for a long time. Just as the minimum wage says no one should earn less than this, the maximum would say no one can earn more. And tie it to the minimum, at that. None of this 98, 728, or 1,419 times more, either, but a fairer and smaller difference of say twenty to thirty fold.
No one, let alone “professional” sports players, actors, let alone corporate executives deserves or needs to earn millions per year.
Once again Holly Sklar is right on the money. It’s outrageous that people who work long, hard hours often at two or more jobs frequently have to choose between heating their homes or feeding their children. By contrast, corporate CEO’s take home hundreds of times what their workers make, and include free health care and a life-time pension in their earnings package, more than they will ever need to provide for their families’ basic needs.
Unfair though this undeniably is, it’s highly unlikely that company executives will willingly share their largesse with workers.
A living wage and decent benefits are more within the realm of possibility to lift the working poor out of poverty.
If an employer can’t, or won’t, provide fair compensation, an adequate Earned Income Tax Credit must be implemented in order to “make work pay”, as conservatives approvingly noted.
Rather than “trickle down”, increased earnings of the formerly poor could “bubble up”, allowing workers to contribute to the society and partake of the general wealth of the economy.
Full-time workers would be mandated by the government, preventing temps being hired to avoid overtime pay as well as decent benefits– medical care, adequate family leave, and most importantly, the right to collective bargaining through unionization.
Holly Sklar ended by stating, “Paying workers enough to live on is the minimum employers should do”.
Well said.
I don’t think anyone is saying simply paying CEO’s less and workers more will fix the problems. It is one thing that can be done to make things a little bit more equitable. Remember hypocrisy kills the soul and we live in the land of hypocrisy.
We need a maximum wage instead.
unadulterated capitalism = animalism, pure law of the jungle
mankind is an animal, so go figure.
fear not fellow serfs, for we are swiftly approaching our own “let them eat cake” moment…that or an earth-shattering (our economy and national debt is owned mostly by foreigners) economic collapse that will make the great depression seem a pleasant historical daydream.
prepare. best of luck to you all.
The care of human life and happiness, and not their destruction, is the first and only object of good government… The mass of mankind has not been born with saddles on their backs, nor a favored few to ride them.
– Thomas Jefferson
“If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”
– Abraham Lincoln in his Lyceum address
“The question shall arise, and arise in your day, which shall rule, wealth or man; which shall lead, money or intellect; who shall fill public stations - educated and patriotic free men or the feudal serfs of corporate capital?”
– Wisconsin Supreme Court Chief Justice Edward Ryan, 1873
“You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.”
– Supreme Court Justice Louis Brandeis
“How wealthy the wealthy are does matter. If we allow great wealth to accumulate in the pockets of a few, then great wealth can set our political agenda and shape our political culture — and the agenda and the culture that emerge will not welcome efforts to make America work for all Americans.”
– Sam Pizzigati
Plutocracy: 1. The rule or power of wealth or the wealthy; 2. A government or state in which the wealthy class rules. 3. A class for group ruling, or exercising power or influence, by virtue of its wealth.
– Webster’s Unabridged Dictionary
The alarming development and aggressiveness of great capitalists and corporations, unless checked, will inevitably lead to the pauperization and hopeless degradation of the toiling masses. It is imperative, if we desire to enjoy the full blessings of life, that a check be placed upon unjust accumulations and the power for evil of aggravated wealth.
– Constitution of the Knights of Labor, 1869
“Inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our government.”
– Franklin D. Roosevelt
“So merciless is the tyranny of economic appetites … that a doctrine which confines them to their proper sphere, as the servant, not the master of civilization, may reasonably be regarded as … a permanent element in any sane philosophy.”
– British historian R.H. Tawney
“Commercial shackles are generally unjust, oppressive, and impolitic.”
– James Madison
“I have no doubt but that the misery of the lower classes will be found to abate whenever the Government assumes a freer aspect and the laws favor a subdivision of Property.”
– James Madison
“Wherever there is interest and power to do wrong, wrong will generally be done.”
– James Madison
costco is a great company. no wonder they are doing so well.
Howard Zinn is a good read on wealth inequality, especially how these “elites” pit the other 90-plus percent against each other over the remaining resources. Instead of asking how much is required for good education, universal health care, social security, etc…a limited amount is offered and we are left to slug it out…which provides a perfect distraction for tilting the system further in their favor.
Likewise, Bill Moyer’s “Pass the Bread” is an excellent lesson for our times.
http://www.commondreams.org/views06/0522-35.htm
I have come to see “THE ECONOMY” as a hammer to the masses. Any potential benefit to the masses is seen as a cost and therefore hammered by “THE ECONOMY”. “THE ECONOMY would suffer” is a excuse to deny any, and all, benefits to the lower 90%. However, the hammer is tempered when benefit go the other way. CEO’s making 1000 times of minimum wage, well that is the free market economy at work.
George Orwell’s 1984 is sited often these days to point out the doublespeak that our government and media use to obscure the fact. And, rightfully so. However, the main message I got from 1984 is how war is used to perpetuate class. This article points out that despite the every increasing efficiency of our working class, we somehow have longer hours, have less vacations, less benefits, less security, etc. than before. We should be made in the shade with lemonade, but war and the elites keep our inequality humming along.
I’ve always likes this site:
http://www.lcurve.org/
The problem is GWB is talking with Jesus constantly and he only heard the first half of the admonition,”the poor will be with you always, but you will not always have me”. Consequently he thinks he must be sure that he keeps the poor in their present state. Isn`t it exciting to have our president in direct contact with the Lord?
Is it any wonder that people in other industrialized countries are healthier and live longer than us? We work longer and harder, are far more stressed (childcare anyone? Who of you has faced your childcare provider quitting without notice and your employer threatening to fire you if you don’t show up?), are screwed by our health care system (with our leading Presidential contenders planning to screw us twice), and feel utterly powerless against our government predations on our freedom (Patriot Act et al).
This is supposed to be our country. But it isn’t anymore. It now belongs to the corporations and the richest 1% of Americans. Our only hope of getting it back is the National Initiative. But we will have to work for it to get the signatures. Without it we can only expect more of the same, only worse. So tell people to go to www.Ni4D.us, create a spreadsheet for collecting signatures of registered voters and send them to the mailing address at the website, use an information factsheet to inform voters. Write letters to the editor. Use basic grassroots democracy to get it done. It’s up to us. I can tell you we won’t get any press on it.
This hasn’t been our country since at least the 1880’s, meaning the people of the country, that is. In the late 1870’s and early 1880’s, we had the same kind of bullshit going on, with a group of people called the robber barons. The main anti trust act that TR used to go after the trusts was aimed directly at John D Rockefeller and Standard Oil, and that was nearly 20 years later.
Since then, we had FDR who rebuilt the middle class, and actually improved on it. We were on the way to being a civilized nation. Then came the republicans. Truman tried to implement a universal health care system like the ones he started in Japan and Germany, as well as most of the rest of Europe, and the republicans in congress stopped it dead in it’s tracks. They did the same in 1992 when it was proposed agaion. So we end up paying through the nose so that big money can profit where in other countries they think that things like this are social obligations of any civilized country. They pay far less than we do, and get better results. We are being foolish, and all for the profit of someone who we don’t even know.
The problem is big money. Until we can rid our political system of it’s corrupting influence, nothing will change. We will continue to be played with by big money, who use every trick in the book to divide us from each other. We were, as a country at least TRYING to get along with each other, then Reagan came long and told us to go ahead and hate our neighbors, our coworkers, the poor, and anyone different from us. That we might actually be united as a country scared big money more than anything, and they did everything they could do to seperate us from each other by any line they can. Either you’re not white, or you’re the wrong denomiation of religion, or you’re the wrong religion, or you’re gay, or you’re a pot smoker, or you’re a democrat, or WHATEVER they can use. My personal favorite is the oft used and never explained “Oh, you’re one of THOSE”. It’s all done to make us afraid of each other and easily led to make stupid decisions.
Money itself is not evil, but those who love it more than anything else are. They are in the process of destroying this country, and they will stop at nothing to get what they want. And they are NOT going to give up what they have stolen from us already without one hell of a fight. Be prepared for it.