Pay for the Chief Executive Officers (CEO) of large corporations has always been huge. In the 70's and 80's, they became outrageous. But even that pales in comparison to the obscene pay being received by CEOs these days. According to an analysis done by the Associated Press (AP), over half of all corporate CEOs make more that $8.3 million a year.
During the 1990's, corporate CEO compensation rose about 800%. During the same time period, the median household income only rose 8.6% in this country. Currently the average corporate CEO makes 179 times as much as a rank-and-file worker.
Now most CEOs and corporate boards would like us to believe the the compensation is dictated by the market and by performance. Not true! J. Richard Finlay, of The Centre for Corporate and Public Governance, says CEO pay is not set by the market, but "determined by a small clique of like-minded directors, most of whom are themselves past and current CEOs with a vested interest in perpetuating a failed, but to them, remarkably generous system."
Even multi-billionaire Warren Buffet says that "too often, executive compensation in the U.S. is ridiculously out of line with performance."
And it's not just the CEOs that are receiving huge compensation. The average CEO makes about 2 1/2 times other executives. That means many of the other executives are also being paid millions of dollars.
Of course, all of this is happening during a time when the average worker is being forced to accept pay cuts, or see his job shipped overseas. The power of unions in America has been gutted in the last few years by the Republicans, leaving American workers defenseless.
We hear a lot of talk from politicians about helping American workers, but it is mostly just talk. When Republicans talk about helping American workers, they are talking about helping their corporate executive buddies make even more obscene salaries. Democrats are not much better. The best they can muster is to raise the paltry minimum wage to slightly more than $7 an hour.
It is time to elect some politicians who will do more than just mouth platitudes and toy around with the minimum wage. It is time to address the obscene corporate executive salaries more directly.
I suggest we pass a new law limiting CEO compensation to 30-40 times the wage of the lowest-paid worker in the company (regardless of what country that lowest-paid worker lives in). If that CEO wants to hire Asian workers making 15 cents an hour, then that is the wage his salary will be determined from.
This law would have a positive effect in two ways. It would stop the export of American jobs to exploit cheap wages, and it would tend to raise the wages of American workers (since that's the only way executive wages could be raised).
There are some who would claim this would have a negative effect on our economy. I don't believe that is true. Times have always been best in America when wealth was more evenly distributed, even for business. Business will thrive even more when the common man has more to spend and save.
Neocons would like us to believe that money trickles down, but that has never been true. In a capitalist society, money flows upward -- it never trickles down.