The Inequality of American Workers Is Growing

The wealth gap in America is growing. The Wall Street Journal reported that incentive pay for the chief executive officers of 50 major corporations jumped 30% in 2010. This is just bonus money and the 30% equates to $126 million. Walt Disney CEO Robert Iger received a $13.5 million bonus, an increase of 45% from a year ago. The CEO of Starbucks, Howard Schultz took home a $3.5 million bonus. The biggest bonus he has ever received. You need only to look at the bonus payouts to the CEO’s that caused the Great Recession to understand the shamelessness of these CEO’s.

While higher pay for top executives may be attributable to improved stock prices, etc., it is equally true the their employees contributed to the corporate success but the Bureau of Labor Statistics reported that average hourly compensation for American workers fell 0.5% in February.

Workers at Walt Disney World in Florida argued for months last year and early this year for higher wages. They finally ended up getting an annual raise of 3% to 4% spread over the next three years.

It is sad that while the workers do more and more for the same pay the wealth gap is certain to grow. Unfortunately, there is no end in sight to this problem because corporate America is dedicated to keeping wages low so that the profits will be high.  In 2006 the big Wall Street investment firm   Goldman Sachs said in a report, “The most important contribution to higher profit margins over the past 5 years has been a decline in labor’s share of national income. Read between the lines to see the plan that businesses are implementing. They have Goldman Sachs to advise them and an army of other anti-worker financial gurus.

The extraordinary rewards to the upper o.o1% that played a big role in causing severe speculation and risk taking which  lead to the Great Recession is a gross demonstration of rebuking the public, the Congress and the President.  Inequality has increased.

If corporate America cannot understand that suppressing workers’ wages will lead to a devastated working class then we need to strengthen workers’ bargaining power and make it easier for workers to organize and harder for employers to bust unions. What do you think Wal-Mart would look like if it was unionized?

Who does the worker have looking out for their interest?  It isn’t Congress.  It doesn’t seem to be the President. How many people have lost their jobs only to realise that their work didn’t go away; it was just spread out over a few people who may have to work harder and under more stress to keep up. In some instances it may be practical to eliminate a job if the work performed by that job can be reduced significantly but is that the main cause of job losses?

The unions have been blamed for the domestic auto industry problems but, in fact, it was inept management that caused the industry to fail. Management ignored the quality of vehicles that rolled off the assembly line but the customers did not ignore it. The Japanese moved in with high quality vehicles and began to take market share from the Big Three.  It has taken nearly 30 years for the quality of domestic built vehicles to come close to the level of Japanese quality.  Meanwhile, the domestic market turned toward imports for what American built vehicles should have delivered.

General Motors took the clever action of filing for bankruptcy so they could, among other things, reduce the wages of the workers but executive pay remained intact and vehicle costs remained high.

Paul Krugman, the Nobel Prize winning economist, wrote in the New York Times on October 6, 2009 that a full recovery depended on strengthen the workers bargaining power, This is an unlikely outcome of  the Great Recession.

The inequality between the American work force and management is growing beyond customary and expected limits. Congress is planning to reduce services to the poor whose ranks will soon swell with workers who once were part of the middle class. Instead of elevating people out of poverty the Government and businesses are determined to put more people below into poverty. The great American tragedy is that not too many people care at this time.