Philly Inquirer "Rich Man Poor Man" Labor Day Editorial:Telling it like it is!

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http://www.philly.com/inquirer/opinion/20100906_Editorial__Rich_man__poor_man.html

Posted on Mon, Sep. 6, 2010

Editorial: Rich man, poor man

As the nation marks Labor Day, the plight of middle-class families demands greater attention.

The recession that began in December 2007 has not eased its grip on the average worker. Unemployment in Pennsylvania in July was 9.3 percent; it was 9.7 percent in New Jersey.

And too many of the fortunate workers who still have jobs are falling behind because of stagnant wages, lost home values, and dwindling savings.

The Keystone Research Council, a nonprofit group in Harrisburg, found that median household income in Pennsylvania fell $2,400 in the first seven years of this decade, even before the worst of the recession took hold.

Meanwhile, fat cats grow fatter. The CEOs of the 50 companies that laid off the most workers during the recession enjoyed salaries 42 percent higher than the pay of other corporate chiefs, one study found.

Former Schering Plough chief Fred Hassan led the list of shame, receiving $49.65 million in compensation in 2009. After his company's merger with Merck, 16,000 employees were laid off.

Johnson & Johnson's William Weldon was paid $25.57 million while the firm laid off 8,900 workers. Verizon CEO Ivan Seidenberg took home nearly $17.5 million while laying off 21,300 employees.

Nice work if you can get it.

Compare those shocking salaries with the median wage for workers of $44,770 - for men, that is. Female workers still earn less, a median wage of about $36,600. Over her lifetime, a female college graduate will earn an average of $1.2 million less than her male peers.

Aside from the perennial gender gap, it's clear overall income inequality is growing. Corporate leaders know it, too, which is one reason so many are resisting a new law that requires companies to disclose the ratio between CEO compensation and the average worker's pay.

The KRC study found that, if a typical worker's pay had risen equally with the rate of top wage earners since 1979, middle-class families would be earning between $5,600 and $7,500 more per year in today's market.

While middle-class wages have stayed flat, families are paying more out of pocket for their health care, too. The Kaiser Family Foundation said family health premiums have risen 3 percent this year, but workers are paying 14 percent more on average as employers shift more of the cost to employees. That means the average family is paying $482 more this year for health care.

These factors and others, including higher taxes, are causing more families to raid their retirement savings early. Fidelity Investments, for example, has reported a sharp increase this year in the number of people tapping their 401(k) accounts for "hardship" withdrawals. They're doing it to prevent their homes from being foreclosed, or to pay for their children's' college education.

The Great Recession is almost three years old, but it could take many years before many workers get back on their feet.

CEOs are Sociopaths - Thom Hartmann

Thom Hartmann nails this one. CEO's taking in hundreds of millions while millions are unemplyed are simply sociopathic. Read if you are willing to rethink the cultural assumptions of our corporate capitalism run amok. - Rick
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http://www.commondreams.org/view/2009/07/27

Published on Monday, July 27, 2009 by CommonDreams.org

Profiling CEOs and Their Sociopathic Paychecks

by Thom Hartmann

The Wall Street Journal reported last week that "Executives and other highly compensated employees now receive more than one-third of all pay in the US... Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total US pay in 2007, the latest figures available."

One of the questions often asked when the subject of CEO pay comes up is, "What could a person such as William McGuire or Lee Raymond (the former CEOs of UnitedHealth and ExxonMobil, respectively) possibly do to justify a $1.7 billion paycheck or a $400 million retirement bonus?"

It's an interesting question. If there is a "free market" of labor for CEOs, then you'd think there would be a lot of competition for the jobs. And a lot of people competing for the positions would drive down the pay. All UnitedHealth's stockholders would have to do to avoid paying more than $1 billion to McGuire is find somebody to do the same CEO job for half a billion. And all they'd have to do to save even more is find somebody to do the job for a mere $100 million. Or maybe even somebody who'd work the necessary sixty-hour weeks for only $1 million.

So why is executive pay so high?

I've examined this with both my psychotherapist hat on and my amateur economist hat on, and only one rational answer presents itself: CEOs in America make as much money as they do because there really is a shortage of people with their skill set. And it's such a serious shortage that some companies have to pay as much as $1 million a day to have somebody successfully do the job.

But what part of being a CEO could be so difficult-so impossible for mere mortals-that it would mean that there are only a few hundred individuals in the United States capable of performing it?

In my humble opinion, it's the sociopath part.

CEOs of community-based businesses are typically responsive to their communities and decent people. But the CEOs of most of the world's largest corporations daily make decisions that destroy the lives of many other human beings.

Only about 1 to 3 percent of us are sociopaths-people who don't have normal human feelings and can easily go to sleep at night after having done horrific things. And of that 1 percent of sociopaths, there's probably only a fraction of a percent with a college education. And of that tiny fraction, there's an even tinier fraction that understands how business works, particularly within any specific industry.

Thus there is such a shortage of people who can run modern monopolistic, destructive corporations that stockholders have to pay millions to get them to work. And being sociopaths, they gladly take the money without any thought to its social consequences.

Today's modern transnational corporate CEOs-who live in a private-jet-and-limousine world entirely apart from the rest of us-are remnants from the times of kings, queens, and lords. They reflect the dysfunctional cultural (and Calvinist/Darwinian) belief that wealth is proof of goodness, and that that goodness then justifies taking more of the wealth.

Democracy in the workplace is known as a union. The most democratic workplaces are the least exploitative, because labor has a power to balance capital and management. And looking around the world, we can clearly see that those cultures that most embrace the largest number of their people in an egalitarian and democratic way (in and out of the workplace) are the ones that have the highest quality of life. Those that are the most despotic, from the workplace to the government, are those with the poorest quality of life.

Over time, balance and democratic oversight will always produce the best results. An "unregulated" marketplace is like an "unregulated" football game - chaos. And chaos is a state perfectly exploited by sociopaths, be they serial killers, warlords, or CEOs.

By changing the rules of the game of business so that sociopathic business behavior is no longer rewarded (and, indeed, is punished - as Teddy Roosevelt famously did as the "trustbuster" and FDR did when he threatened to send "war profiteers" to jail), we can create a less dysfunctional and more egalitarian society. And that's an important first step back from the thresholds to environmental and economic disaster we're now facing.

This article is largely excerpted from Thom Hartmann's new book "Threshold: The Crisis of Western Culture."

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class and What We Can Do About It," and "Cracking The Code: The Art and Science of Political Persuasion." His newest book is Threshold: The Crisis of Western Culture