Numbers show the sacrifice isn’t shared

Income Growth Pie ChartAs the economy struggles to rebound and local, state, and federal legislators seek to address cash-strapped budgets, the buzzword has been “shared sacrifice.” But the AFL-CIO’s annual Executive Pay Watch report shows that CEOs of major companies, unlike their employees, haven’t made too many sacrifices. In fact, CEOs from S&P 500 companies received, on average, $11.4 million in total compensation in 2010— a 23 percent increase from the previous year!

Shared sacrifice? Not so much. We sure don’t know any workers who got 23 percent raises last year.

What’s equally troublesome is that the widening abyss between what executives make compared to everyday workers is not a recent phenomenon. Whether or not the economy is booming, the income gap in the United States is startling — the bottom 90 percent of Americans earned only 36 percent of the country’s income from 1979 to 2007.

As much as they might like to maintain the status quo, it’s unsustainable for CEOs to keep funneling money to themselves and away from their workers. In a consumer-driven economy, workers need to earn enough to spend money on the products and services those companies make! And the best way to ensure that they do is by letting workers have a seat at the table to negotiate better pay through collective bargaining. In fact, MIT economists Frank Levy and Peter Temin found that income inequality across all of society has increased as union membership declined.

If we all are to enjoy a healthier economy — for CEOs and workers alike — we need a political climate that’s not hostile to workers and respects their right to form unions.

Graphic courtesy of the Economic Policy Institute.

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This entry was posted on Wednesday, April 27th, 2011 at 11:52 am and is filed under General, Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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