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$11-Million-A-Year Bandits


AFL-CIO President Richard Trumka has an important question for you.

 

"How much," he asks, "did your pay go up last year? How about your friends and family?"

 

Before you answer, Trumka asks that you consider this: In 2010, the CEOs of major companies averaged $11.4 million for their year's work. That was an increase of 23 percent over their pay in 2009.

 

All told, the CEOs were paid $2 trillion last year.  That, of course. was during a recessionary time like now when working people were lucky to have jobs at all, whatever the pay. And the pay of those who did have jobs stayed pretty much the same, or actually went down.

 

The CEOs of major companies faced no such problems, obviously, with their pay increasing hugely to more than $11 million a year.  Which leads the AFL-CIO to wonder "how many firefighters, nurses, teachers or construction workers does it take to equal the pay of one CEO today?"

 

I'd also like to know how many CEOs do work as important as that of rank-and-file firefighters, nurses, teachers and construction workers?

 

The AFL-CIO's Trumka notes that despite the collapse of financial markets three years ago at the hands of many of those same astronomically paid CEOs, the "disparity between CEO and workers' pay has continued to grow to levels that are simply stunning."

 

Think of it. Those CEOs collecting enormous pay were in charge when we sunk into the worst financial crisis since the Great Depression. When we lost 8 million jobs and millions of small businesses. When housing prices plummeted and millions of dollars in personal savings were wiped out.  Yet at the same time those in charge of the economy, notes Trumka, "still found a way to make out like bandits."

 

Rich Trumka is a pretty outspoken guy, not known for understatement. But in this case, he probably is understating the situation.  The difference between CEO pay at major companies and workers' pay is beyond stunning, beyond outrageous.

 

I'd say it's virtually beyond human understanding. How could we let that happen? Is this not a democracy in which the great wealth generated here is spread more or less equally?

 

Hah!

 

OK, I'm asking foolish questions. But if ours was a true economic democracy, the spread between CEO and workers' pay would be far less than it is. How many workers got pay raises of more than 20 percent last year? How many were paid more than $11 million?

 

How many needed that much money to live comfortably?

 

Trumka, notes that corporate CEOs "are hoarding $2 trillion in cash." Indeed, the money-grubbing CEOs chose to take their $2 trillion in raises rather than use the money, or at least part of it, to create decent -paying jobs for their fellow citizens who are so much less fortunate than they.

 

To describe the CEOs as greedy would be a gross understatement.

 

I know I'm laying it on thick, but I'm mad – damn mad – and think you should be, too. The CEOs and their companies are stealing us blind and getting way with it.

 

The AFL-CIO's Trumka does offer the possibility of better times, however. He says that "although pay is more out of balance than it has been during most of our lifetimes, for the first time there is hope that things are changing."

 

That, says Trumka, is because of a new law, the Wall Street Reform and Consumer Protection Act. The act, as President Obama said when signing it into law last year, is "a sweeping overhaul of the United States financial regulatory system on a scale not seen since the reforms that followed the Great Depression."

 

The lack of sufficient financial regulations sufficiently enforced was, or course, the main factor in the continuing Great recession, just as it was during the Great Depression of the 1930s.

 

The new law is already under attack by Congressional Republicans who have announced their intention to try to repeal it. They particularly object to provisions that would give shareholders a vote on CEO pay and require companies to publicly disclose the ratio between the pay of their CEOs and their workers.

 

Trumka says it truly shocks him that companies and their GOP allies "have the nerve to argue against those provisions in public, and lobby against them – after the companies drove our country off an economic cliff."

 

Trumka says the AFL-CIO "is ready to have this debate. We will take on Wall Street and we will win."

 

Strong words, but the AFL-CIO has the powerful political allies, the funding and the troops to carry out Trumka's bold promise. Let's hope fervently that labor and its supporters can indeed win the debate, If not, we could be in line for more serious Wall Street-based troubles  – an extended recession for sure, maybe worse.

 

 

Dick Meister is a San Francisco-based columnist who has covered labor and politics for a half-century as a reporter, editor, author and commentator. Contact him through his website, dickmeister.com.

 

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