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Executive pay, worker wages out of balance

Asgr. George Higgins, the labor priest, once told a reporter he believed labor unions would ultimately survive “because people need to organize.”

No greater proof of the need to organize exists than the current economics landscape and the growing awareness that the economic growth heralded day after day is not evenly distributed.

In their 1999 Labor Day Statement, the country’s Catholic bishops write:

“On this Labor Day Americans have much to be grateful for: economic freedom, low inflation and economic growth. But our prosperity is not being widely shared. Too many have been left behind and the gap in family income continues to widen. The top 5 percent of the population takes a larger share of personal income today than similar people did 30 years ago (a 16 percent share in 1968, 24 percent in 1996). While the share of income going to people in the middle 60 percent has declined by nearly 10 percent over the same period. The decline is even sharper for those in the bottom 20 percent. This trend is part of the reason why we need a strong, active, democratic labor movement.”

The simple fact, caught eloquently in a century’s worth of church social teaching, is that those in the middle or at the bottom of the economic ladder have the same human yearning for -- and right to -- economic security as those at the top.

No one in U.S. Catholic circles knows that better today than Higgins, who has worked tirelessly on behalf of labor, and we are delighted to carry more of his words on our pages. It is heartening to hear of new signs of vitality among the labor movement, which has taken considerable steps in recent years to clean up its act.

“When their wages stagnate while their companies prosper, working people are told that their effort and skill aren’t valued,” Higgins said. “And, when health care and pensions are cut back, working people are told that nobody cares what happens when they get sick or grow old.”

That’s not the language -- nor the concern -- of the nation’s popular money shows and magazines. The news outlets that endlessly tout the “robust” nature of the U.S. economy and the limitless potential of globalization are not likely to peer closely at the realities that give the lie to such analyses.

There is, indeed, a casualness to today’s cruelties, a kind of easy acceptance of the inordinate and still growing gaps between rich and poor.

One of the best illustrations of that growing distance is the gap between executive pay and worker pay. The Institute for Policy Studies and the group called United for a Fair Economy, in a recent study, “A Decade of Executive Excess: the 1990s,” report that in 1980, the average CEO was paid as much as 42 factory workers; in 1998, as much as 419 workers.

According to the report, the sixth of its kind, corporate profits rose 108 percent during the 1990s. In that period, worker pay rose 28 percent, before adjusting for inflation, while CEO pay rose 481 percent.

“If average production worker pay had risen at the same rate as CEO pay” during he same period, “worker pay would be $110,399 today, rather than the current $29,276,” according to the report. “The minimum wage would be $22.08, rather than the current $5.15 an hour.” Pay packages for U.S. executives were way out of proportion to their counterparts throughout the rest of the industrialized world. Further, many who have enjoyed exorbitant compensation have earned their money heading companies involved in illegal behavior, worker exploitation and the marketing of such products as cigarettes.

Of course, wishing for an absolutely level playing field is not only unrealistic but probably unwise. However, it is dangerous to continue on a course where wages and expectations and, in the end, a sense of security, are so wildly out of balance. The only chance for a wide and lasting remedy is strong unions and access to collective bargaining.

National Catholic Reporter, September 3, 1999