“We all need to take responsibility."That's what President Obama noted yesterday in terms of limits to be placed on executive pay as part of the ongoing financial crisis and any more "rescue" money for bankers on Wall Street. As the New York Times reports today, the earlier efforts under the Bush administration did include some provisions on limits to executive compensation, but were "intentionally left them lax."
This issue raises a deeper question for me as to whether it is time to really reconsider, as a moral and ethical proposition, that corporate executives like the bankers Obama was talking about, should be paid so significantly more than ordinary workers (say a bank teller). The AFL-CIO has an interesting page on their website where they list some examples of executive compensation for numerous corporations. Just browsing through the list, it is astonishing that any one person should be paid so much. Should the CEO of AT&T, where I have my telephone service and Internet account at home, be paid 21 million dollars a year? How does that compare to the technicians and officer workers who run the day to day operations of the company?
When so many executives trot on down to Washington and testify before Congress about their need for more public resources, they would not really suffer personally if they said no. Sure, these folks might lose their jobs, but as the recent controversies over bonuses on Wall Street in 2008 suggests, some higher up folks are still getting paid a lot when the company does not make a profit. And, this is on top of large salaries and stock options.
So, I guess I am wondering if all this bluster about limiting executive pay will lead to some deeper thinking about how fundamental inequality leads to disproportionate access to public resources. Will bankers benefit more than ordinary workers? As a historian, I am hopeful we will think critically about how any public money is spent to meet these economic challenges. When we look back to the New Deal, which followed in the wake of the great depression of the 1930's, these resources were not always spread around equally. Local politics, class, race, and gender influenced who got federal money. Even though times and circumstances are different, we have reason to remain vigilant.
Historian Lizbeth Cohen, the author of one of my favorite books about the impact of the New Deal at the local level, has recently called for such historical sensitivity as we face this current crisis. As she argues,
"Nonetheless, it will be important to learn from the past and ensure that the jobs created by today’s economic stimulus package are available to all Americans. Despite elite fears at the time, desperate Americans were not seeking a revolution in the 1930s. What they wanted was a more moral capitalism that gave them a fair shake. I think Americans in 2009 want very much the same thing."Perhaps there is a lot more to think about than limiting executive pay...
2 comments:
I agree wholly with the fact that there should be some kind of limit on executives' salaries. $21mil is out of hand, when that is what he is going to make no matter how well the company does. However, I think the limits should have limits. Exec salaries, in my mind, should be a percentage of profit. A proportion of what they help the company earn. They'll do better work in marketing and sales. It would force them to work harder, hopefully for us, the consumer.
There are those who don't deserve their positions of power, but most have gotten that rank for a reason. They're smart people. Keep them in that position, but force them to work for the consumer because now that have achieved the pinnacle of their field, what else is there to work for?...unless their money depends on it.
Just wanted to say that my mother works for AT&T, and they are such crooks! In fact, a strike just ended with my mother's branch.
Interesting.
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