It's been a great day. The Cubs beat the Cardinals, and I met some friends for a steak dinner. So, now while chilling out listening to blues and catching up with The New Yorker, I read these words in Amy Davidson's October 8 profile of GOP presidential candidate Carly Fiorina: "When HP fired her, she got a twenty-million-dollar severance package, plus fifteen thousand for career counseling. Only in this country, perhaps, could a C.E.O. receive compensation worth more than a million hundred million dollars in six years, get fired, and use the money to enter politics."
I don't believe in salary restrictions of any kind. If a company wants to pay any employee any amount, that's the company's business. At the same time, voters should be able to ask about a candidate's history and what it says about his or her potential leadership. In Fiorina's case, she laid off thousands of workers before she took the money and ran. As far as I can tell, none of her current positions would do anything to help American workers. "Only in America."
In today’s Daily Kos, the great labor reporter Laura Clawson examines the wealth of an average worker compared to Sam Walton’s offspring. According to research by the AFL-CIO, the six Walton heirs total wealth is the same as that of 52.5 million American families (42.9%). The study points out that some families have negative wealth. Adjusted for that, the number of families needed to equal the Walton wealth drops to 1.7 million. However, that adjustment also indicates that many American families have issues with “negative wealth.” Clawson also notes that a Walmart worker being paid $9 per hour would have to work 1,036 hours to make what the company’s CEO Doug McMillon makes in one hour.
Do the Walton heirs deserve to be very rich? I believe they do. Their father created an innovative business model. The bigger question is how much wealth should anyone – rich heir or CEO -- have. What is the cost to society of an economy where a few are very rich and secure and many working class and middle class families are falling behind and less secure?
Today's Chicago Sun-Times reports that Sam Zell has donated $4 million to a PAC that supports the agenda of Governor Bruce Rauner. Columnist Mark Brown sees this donation as part of a movement that he describes this way: "Rich people, no longer satisfied with the privileges of being rich, are going for complete control." This isn't simply a matter of politics. Much of Governor Rauner's agenda targets union employees. Brown quotes Zell as saying, "The 1 percent work harder." That may be true, but in a time when most American face flat wages and poverty is growing, it's hard to see how the hard working 1% are helping the rest of us. Working people need to decide if they support making people like Zell even richer or if they want to have a society where children from the middle class and the working class will have opportunities to be successful. Rich people have always had disproportionate control. Are we moving to a point where their voice is the only one that matters?
Anyone who cares about working people needs to read Laura Clawson of the Huffington Post. Today she examines the state of Workers Compensation, which has been cut in 33 states. There is also great disparity between states and how they pay for injuries. Clawson points out that if a worker in Alabama loses an eye, she will be awarded $27,280. The same injury in Pennsylvania will be compensated at $261,525. Companies are paying less and less in damages every year and finding new ways to restrict workers' benefits. This story is outrageous, but it’s no more outrageous than stories of workers losing pensions or wage theft or union busting. Until American workers – white and blue collar – realize their common interests, employers will continue to find new ways to make them suffer. It’s easy to blame the super rich. They are acting in a way that makes sense for their interests and security. What is our problem?
Huffington Post reports that income inequality costs the average American worker $18,000 a year. This number is drawn from an Economic Policy Institute report that considers how money has been redistributed from the working poor and middle class to the 1%. The question is not just lost income, but also how increased productivity has not been matched by increased salaries. Huffington Post author Jillian Berman puts it this way: “The rich have gotten richer at the expense of the rest of us.”
This article is another example of why good job news can hide deeper problems. If workers are getting low income jobs or not getting decent raise, they will have a constant feeling of falling behind, one step from bankruptcy – social insecurity. This problem will not be solved until something changes so there is a more equitable distribution of income and wealth. America needs a raise, the kind of raise that will let working people pay off their debts and save for the future.
Recently I posted on a debate between union leaders and restaurant owners over the minimum wage. That debate focused on what workers earn. Laura Clawson of Daily Kos flips the question: Let’s look at the earnings of restaurant CEOs. Between 2006-2013, incomes of large corporate restaurant CEOs increased from 621% ratio to the minimum wage to 721%. Clawson notes that these well-paid CEOs often hire well-paid lobbyists to sell their sob stories. As I noted in my last post on this topic, a business person who owns a hot dog stand or small restaurant might have a different argument. CEOs of large corporations can’t make the same claim. They have taken raises and bonuses while their employees have been forced to apply for food stamps and Medicaid. America needs a raise.
Nick Hanauer makes no bones about being wealthy. He also understands that consumers need money to buy the things that make people like him rich. He’s written a great open letter to his fellow “zillionaires.” It’s long, so I’ll just link and let you take it from a billionaire with great common sense.
Al Jazeera America reports on claims of a Texas employment miracle. While some may be moving ahead in the Lone Star state, construction workers interviewed for this article are working hard for $8-$10 an hour. The state’s governor brags that Texas has an unemployment rate far lower than the national average (national 6.3%; Texas 5.5%). However, the state is producing as many low wage jobs as high paying jobs. It also offers less support for low wage workers, which means they struggle even more to get by. The working poor in Texas live harder lives than workers in New York or California, states that have more progressive labor laws and social safety net services.
Some may say, “A job is a job.” Those people usually have a job or other source of income that gives them the security needed to be glib and unfeeling about others. Across America, low wage workers are struggling to get by. So are middle class workers, who often resent the aid given to low wage workers. All American workers need to remember who the real winners in this society are – the 1% – and ask them to pay for their share of our common needs. The Texas Miracle is just one more example of an American economy that asks more and more of the working poor. That’s not a miracle. It’s a tragedy.
Huffington Post offers an enlightening look at CEO-worker pay ratios at top companies. For example, CVS Caremark pays its CEO 422:1 to the median worker’s salary. While no one denies that leaders of large, successful corporations should be well paid, how can we justify such a difference in the U.S. when similar ratios are not as drastic in Europe and Japan? Take a minute to look at this chart and ask yourself if it’s fair for the top to make so much while those on the bottom struggle.
Anyone familiar with Diane Ravitch’s writing knows she is on the political left. That said, her latest article does a great job of showing how our political and economic decisions are linked to education. Whatever your political views, I recommend that you consider her views and how they impact both students you care about and how they impact your tax dollars. As Ravitch points out, jobs are also at issue. As long as Americans are competing with workers in developing nations that earn much less, jobs will continue to outsourced. Ravitch, like a good teacher, helps us connect the dots.
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