September, 2020
Washington – Labor has had another bad year.
The wage ratio of CEO compensation to worker compensation, which was 21 to 1 in 1965, was 293 to 1 in 2018 and grew to 320 to 1 in 2019. The ratio looks to be even worse for 2020.
Speaking of 1965, it was not only the wage ratio that was more favorable for labor back then. American society as a whole was less inequitable.
Part of that was due to business leaders of the post-WWII era who felt a strong responsibility toward their communities and country. While they wanted profits, to be sure, they also had a better sense of limits. Many business leaders, as I recall, prided themselves on their companies' pay structures. For people at the top to take too much at the expenses of those at the bottom was unseemly, even immoral.
Businesses prided themselves on products and services that benefited people across the board. They innovated for the greater good, not just for the good of shareholders.
The "greed is good" decade of the 1980s spoiled that. So did colleges of business that taught a generation how to make quick profits from short-term thinking. The business community soon came to lionize leaders that could exploit the laboring class through union-busting and moving jobs overseas. At the top of the heap were business leaders who increasingly made money from financial instruments rather than producing any actual goods or services.
It was a Frenchman, Thomas Piketty, who jolted the world with his 2013 book on inequality, Capital in the Twenty-First Century. He suggested that without reforms, democracy itself is threatened.
Indeed it is. We are on the verge of losing it in 2020, to those who are trying to install a plutocracy.
I'm among those who favor measures to restore a wage ratio that would reduce inequality. In an earlier blog I wrote, "Growing economic inequality (the root of many of our problems) can be reversed by applying wage ratio eligibility standards to most, if not all, federal grants, contracts, tax credits, and tax deductions."
We do this for pensions; we should do it for all taxpayer spending. Taxpayers should not be both sources of revenue and accomplices in dangerously increasing inequality. Tax policy should be aimed at reducing, not increasing, levels of inequality that threaten democracy.
Happy Labor Day.
