The Dismal Science

I’m in Labor
Not only do I think labor unions are a Good Thing, I think they are essential things. We have seen some of the consequences of unbridled greed, and no, I'm not talking about the United Auto Workers. I'm talking about the energy speculators of Enron, who destroyed many families' livelihoods and savings; the Savings & Loan debacles; the current banking and investment-house crisis.

Underlying and worsening it is the unabated plundering of our nation's wealth by the executive officers of major corporations (as well as leadership of some churches and some non-profit organizations). These people grasp huge bonuses, “golden parachutes,” fringe benefits and various annual "gifts" as though they were medieval Earls, enriching themselves on the backs of their fiefs, working men and women.

Numbers Game
Here's a number I haven't seen: what is the total taking, with bonuses, of the three top execs at - let us say, GM - compared with the total salary of their UAW employees?

At GM, the Chairman and CEO (one guy) made $14.4 million in 2007. The Vice Chairman and CFO (also one guy) made $7.6 million. The Vice Chairman for Global Product Development made $6.9 million. That totals about $28.9 million. (http://www.companypay.com/executive/compensation/general-motors-corp.asp?yr=2008)

Ask Yahoo says “According to the Indianapolis Star: Base wages average about $28 an hour. GM officials say the average reaches $39.68 an hour, including base pay, cost-of-living adjustments, night-shift premiums, overtime, holiday and vacation pay” (http://malaysia.answers.yahoo.com/question/index?qid=20070924073107AAuGk8O). That works out to about $83,200 per year for the highest paid UAW members. (The more modest, beginner UAW guy gets only about $58,200.)

This is a meaningless intellectual exercise, of course. But those three executive salaries ($28,900,000) are roughly equal to the wages of 347 of the highest paid UAW members. How many UAW workers are there? A footnote from an article (http://www.heritage.org/research/economy/wm2162.cfm) claiming the workers' costs are actually much higher - $70 and hour! Or more! - says, in part: "Heritage Foundation calculations based on General Motors Form 5500 data ... 85,000 active hourly workers in the pension plan, each working 35.5 hours a week ..."

Well, wait a minute. That means most workers don't work 40-hour weeks, right? So my wage calculations are higher than they should be. Well, never mind. The conclusion here is that the three top guys make as much as 347 of the guys who are actually working to produce the income.

I've been white collar my entire life, until 2 years ago. I've owned a small (tiny!) business. I will not argue that intellect, education and the ability to lead and direct are not job skills, or that employing them is not work, and doesn't deserve compensation. But $7,000,000 versus $83,000? More than 84 times as much? Does that seem right?

Equal Poverty
I'm constantly surprised by the Wal-Mart shoppers of America saying the UAW (or other union) workers should earn less. What?!?!? Why? Why not say, instead that YOU should earn MORE? If every worker in the US earned at least $28 an hour, one parent could stay home with the kids without being condemned to poverty. A medical emergency would not be followed by a bankruptcy filing. And the family could afford to drive a Chevy, or a Ford. Equally compensating the workforce makes more sense to me than equally impoverishing the workforce!

A Level Playing Field
Back to those executives. I've heard it said that one way of "equalizing" would be to fix executive compensation at 20 times of the wage of the highest-paid worker. Am I the only one who immediately sees that this would create a tier of management that was extremely well compensated (3 guys making a few million a year), and a workforce that still scrounged by on Federal minimum wage, about $14,560? (An interesting chart, for you numbers freaks: http://oregonstate.edu/instruct/anth484/minwage.html)

How about this: tie executive compensation to 20 times the wage of the LOWEST paid worker. Now, that's equalization! In the great US tradition, as the lowest wage rose, the wages above would rise; but none would catapult to astronomical levels. If the bottom was $28/hour, the top guy would still net about $1,165,000 a year. Most of us could struggle by on that, I think. Even the MBAs. After all, they could still earn pocket money by sitting on each others' boards and renting out their extra houses and yachts.

Everything's Relative
One thing has always bothered me. When I read about some executive extravagance - the most recent vacation home purchase or elegant party for 750 close friends - I always relate to it on a very personal level. I remember when my children were small. I was an at-home mom, my husband was a union worker making roughly three times the minimum wage of the time (that would be about $21/hour today), and our bills were an unscalable mountain that I could only manage by nibbling at the corners.

Ten thousand dollars. $10,000 lousy bucks. It would have changed our lives. It would have spared us months of worry, of feeling we were skating on the edge of a black hole of failure. And we had it good, relative to many people. Sure, we would have blown some of it on extravagances. We probably would have saved less than 10%, donated less than 10%. But we could have paid off the ever-escalating heating bill, and maybe even caught up with the phone company and a few others. If it was $50,000, we could have paid down our mortgage, invested for our future, put some aside for education.

Eat the Rich
I would read about some hotshot flying his girlfriend to Paris for a little shopping and say, "Wow. The cost of that trip alone would pay me out of every debt I have!" I had the same reaction just months ago, when I read the reports of Sarah Palin's wardrobe purchases.

Please don't tell me the answer is to get an education and get into an Ivy League school and make the right career choices and make the right friends. That's just insulting the people for whom that was never, ever an option. You know - the vast majority of us, who only enter the halls of power as waiters, audio-visual techs, stenographers and cleaning staff.

Dollars and Sense
The US population is around 303 million (from https://www.cia.gov/library/publications/the-world-factbook/print/us.html). Of those, 203,987,724 are between the ages of 15-64; let's call them wage-earners, although that's not strictly accurate. The proposed auto bailout amount - just for the auto industry - is $15 billion. That's $15,000,000,000, or about $78 for each of those citizens. Peanuts. But what about the other bailouts? Still small potatoes per person, eh? Now add in corporate tax breaks.

If you gave that money to those citizens, instead of using it to prop up failed businesses that have decades of terrible decisions behind them, most of it would re-enter the economy quickly - perhaps by feeding a hungry child, or giving a tired working parent the opportunity to refuse overtime.

I'm not suggesting a literal handover of a check. I suggesting a re-thinking of our priorities. I'd be stupid to say that businesses aren't important to our economy. But people are vital to our businesses: people to make things, people to sell things, people to service things, people to buy things. We are not doing a very good job of taking care of our people, our workers.

A Modest Proposal
So here are my hopes for the New Year, for a new administration, for a country tired of the feudalism that US business has become.
1. Family Wage jobs. Jobs where one earner can support an entire family. Not at poverty level, but at a comfortable level. And none of this crap about shortened work weeks or enforced holiday unpaid “vacations.”
2. An end to Federal financial support of businesses. Microsoft needed no bailout because it produced what people wanted. John Deere isn't asking for money. Even the loathed Wal-Mart succeeds by giving people what they want at prices they can afford.
3. Please, oh please: decent health care for everyone, even people without cushy union jobs . That includes dental, eyeglasses, mental health. Health care in this country was better before it was co-opted by the insurance companies. Let's get it back.
4. A cap on executive earnings and benefits for all publicly-traded companies and all tax-exempt entities, tied to lowest-earner wages.

Where's the Beef?
Okay, where will we get the money? We can't literally - or legally - extract it from the pockets of the already-rich (can we? No? Damn!). But we can offset the cost of (for example) health care by pooling all the money used currently for lousy, ineffective, costly public health programs: Veteran's care, Medicaid, various health clinics and so forth. That will at least make a dent. Include the amount employers pay for employee health care. Include the amount people currently pay for health care out of their own pocket. Look at what other countries do, and Americanize it.

For the hourly-wage improvements, the best - the only, as far as I know - way to achieve that is to unionize, and strike as necessary. It's painful, it's ugly, and it works.

Perhaps when we get US workers off food stamps, Aid to Dependent Children, WIC and other aid programs, there will be a little more cash in the economy.

We can make this work the way it should: for the people, by the people.