Thursday, March 07, 2013

Income Inequality

This is something that has been posted a few months back but only now is circulating the blogosphere:

The problem of income inequality in the United States has been with us for a long time: for at least the last ten years (if not the last thirty or more) wages have been frozen for most American workers, while the top one percent of the employment bracket (the CEO level) continued getting raises and bonuses and comp packages and Golden Parachutes (even when those CEOs were screwing up their companies: SEE the Twinkies company going down in flames while the executives paid themselves off).

Just to note: it used to be as recent as 1978 that executive (CEO) pay was only 35 times that of the average employee.  Today it's roughly 380 times, partly because average employee wages haven't grown but mostly because executives have been paying themselves (via friendly boards or manipulated systems) more and more without consequence (politicians are bought, media are bought, unions are crushed).

The argument for high wages for high-level jobs (like CEO, or high-priced attorney, or esteemed doctor) is that it motivates people to work and empower themselves to achieve great things: the carrot rather than the stick as it were.  While that is a valid argument, there's a question of "how much is really enough?"  At what point does GREED become too much of a motivating factor rather than equitable compensation for good effort?  Where's the sense of proportion when it comes to taking a $5 million bonus while 2,000 other employees of your company gets a wooden nickel each for working as hard or even harder than that CEO?

There ought to be a way to fix this in a fair and equitable manner.  I'd argue for a wage cap on CEOs tied to their employees: that CEOs of large companies be paid no more than 35 times (like in 1978) than their average non-administrative employees.  Said cap to be phased into action over a five-year period, dropping from 380 times to 150 times in Year One, to 98 times in Year Two, all the way down to that 35 times by Year Five.  In the meantime, require that the average wage of those non-admin employees to go up, as a way of making that "35 times more" deal for the upper management less painful (so that it would make the CEOs more like 50 times paid more if those employees hadn't gotten raises).

The math might not be there, I know.  But somehow we've got to raise the wages for a majority of working Americans out there.  And we've got to make CEOs less greedy (based on that video's report, that One Percent of the populus has got 40 PERCENT of the nation's money.  THE F-CK?!)

This isn't communism (something for nothing).  It might be socialism: forcing the richest to take less so that the poor can get more.  Except for the fact we're talking about improving the wages of poor WORKING Americans, not some "handouts" to a nebulous "moochers and takers" society.  But what's the alternative?  Doing nothing, sitting back and basking in the "It's all Capitalism baby learn to love it" belief system is not the solution... The current system is broken: there's no judge, no force of accountability against the GREED that's corrupted our financial institutions.

Seriously, what is the alternative to capping CEO wages?

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