While Workers Struggle for $15, CEOs Enjoy Obscene Pay Raises
Fight for $15 has emerged as one of the most prominent progressive movements in the United States by drawing attention to, among other issues, the role wage stagnation plays in the nation's worsening income inequality, and by forcing presidential candidates — even those on the Republican side — to contend with their calls for a living wage.
"The fight for a livable minimum wage is just one part of the wider fight against an economy that has given way to the influence of organized wealth."
Vermont Senator Bernie Sanders has endorsed the movement, making its primary goal one of the major subjects of his presidential run: "Nobody," Sanders often says, "who works 40 hours a week should be living in poverty." The editorial board of the nation's most influential newspaper, the New York Times, has also expressed consistent support for a $15 minimum wage, and has pressured Hillary Clinton, the candidate the board has formally backed, to do the same.
Since the movement's inception in 2012, many cities and states across the country have raised or have drawn up plans to raise the minimum wage, side-stepping a Congress, and an entire political party, that is largely unmoved by their persistent activism.
In response to a question about whether he was sympathetic to protesting workers fight for better wages, Republican front-runner Donald Trump replied, "I can't be." He then went on to express a view that he has since walked back, but one that underlies much of the Republican establishment's ideological bent: "Taxes too high, wages too high."
While there is still much progress to be made, Fight for $15's victories have been noteworthy given the opposition it faces, and they should be celebrated.
But, over the weekend, a new facet of an old story emerged, one that encapsulates the problems average workers face in their efforts to attain a living wage: Namely, that the CEOs of large, low-wage companies, along with their boards of directors, simply don't care about the pay of the average worker. As workers struggle for $15 per hour, executives of the companies for which they work are receiving obscene pay raises.
The most recent example is the raise heaped upon McDonald's CEO Steve Easterbrook — a 368% raise, to be precise. In 2014, Easterbrook made $1.69 million while his company's workers marched in the streets. Last year, as the New York Daily News reported on Saturday, his salary was "super-sized," boosting his income to $7.91 million.
Interestingly, according to data compiled by the Economic Policy Institute, Easterbrooks' 368% raise is quite consistent with the overall pay increase enjoyed by the top 0.1% of earners over the past several decades.
Lawrence Mishel and Alyssa Davis note that "inflation-adjusted CEO compensation increased from $1.5 million in 1978 to $16.3 million in 2014, or 997 percent, a rise almost double stock market growth." In contrast, "typical worker’s wages grew very little...Due to this unequal growth, average top CEOs now make over 300 times what typical workers earn."
As Thomas Piketty has extensively documented, such inequality combined with sluggish economic growth means more wealth and political power concentrated at the top, which is precisely what we see.
While those at the top pull away from everyone else, the middle class continues to shrink and more Americans slip into poverty or dangerously near it. Not only are the political ramifications disastrous; the social impact is substantial, as well.
In a paper examining the moral effects of widening inequality, political scientist Benjamin M. Friedman notes that as their footing in society becomes increasingly unstable, a "self-protective instinct" is triggered, an instinct that "underlies so much of what emerges as intolerant, anti democratic, and ungenerous behavior—racial and religious discrimination, antipathy toward immigrants, lack of generosity toward the poor."
Soaring CEO pay is merely one notable marker of an economy that increasingly works for the few at the expense of the many. The responses to such a system, as we have seen throughout this primary season, have been various.
On the one hand, we see the rise of a bigoted strongman who promises to smash up the system himself, and on the other we have a populist, democratic senator who believes that the corruption of government can only be overcome by solidarity, organization, and, well, a political revolution.
The outcome is unpredictable, but one thing is clear: A system that propels CEOs into super-wealth while simultaneously ensuring that the working class is unorganized, politically weak, and under-paid is fundamentally unsustainable and ineffective, not to mention profoundly immoral.
As the IMF found in a 2015 study, "increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down."
The fight for a livable minimum wage is just one part of the wider fight against an economy that has given way to the influence of organized wealth, but it is significant nonetheless. As we have seen in New York, Seattle, California, and elsewhere, governments have been forced to respond to the political pressure they are facing both from movements like Fight for $15 and from politicians who are fighting the same battles.
But, despite the progress that has been made, "Wage inequality continued its 35-year rise in 2015," as the Economic Policy Institute noted in March.
The piecemeal solutions proposed by Hillary Clinton are often said to be "pragmatic" and "realistic." But given the magnitude of the problems we face, her attachment to the Democratic status quo means business as usual for wage inequality and, therefore, business as usual for the CEOs who are content to watch their pay soar while workers remain insecure and on the precipice of deep poverty, forced to rely on food stamps to provide for their families.