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on back of the little guy

High CEO pay built
on back of the little guy

Over the years, I’ve noticed that no matter whether the economy is up or down, or how well-trained workers are, many employers, large and small alike, insist that wages be kept low to ensure a competitive edge. The cold, hard fact is that real wages have not risen in more than 20 years. And that’s what American workers live on: real wages. That’s what we use to pay real mortgages, put real groceries on the table, pay real property taxes and finance real college tuitions for our kids.
We’re working harder, longer, better and faster than ever before, just to keep up. Our incentive? Fear. If we’re worried about unsafe working conditions, if we complain about minimal wage increases, we are reminded that there are thousands of willing workers just waiting to take our place at half our pay.
At the same time, we read story after story about the steady increase in executive compensation.
Why is high pay linked to better performance only when it comes to the executive suites? Why do the same people who understand that financial compensation motivates CEOs and top executives fail to grasp that the guy swinging the hammer on the new corporate headquarters feels the same way?
The argument is that underpaid executives not only perform poorly, but are more apt to jump ship.
I agree. The same argument applies to workers on the lower rungs of the ladder. The carpenters in my local union are consummate professionals: When they’re on a job, it gets done right the first time. They’ve been well-trained and take pride in doing a top-notch job. For this, they are paid a decent wage, which includes health and pension benefits. Like other union members, however, we have come under attack in recent years for our wages and benefits, which are said to be “too high.”
But the fact is, you get what you pay for.
It is particularly galling to see jobs go to non-union contractors who try to make good on their low bids by using less- qualified workers whose craftsmanship often is shoddy and many times has to be redone. It’s not the fault of the workers: They simply lack training and experience, which costs time and money that non-union contractors won’t invest.
It’s like turning over your entire marketing department to a newly minted business school grad whose main qualification is the fact that he–or she–is willing to work for a fraction of what you’d have to pay to get someone with experience.
Penny-wise and pound-foolish, as Benjamin Franklin used to say.
The recent stratospheric levels of executive pay may be keeping morale high in the executive suites and boardrooms of the Fortune 500, but down here in the streets of America they’re demoralizing workers who are shedding blood, sweat and tears for tiny raises that barely show up in their paychecks after taxes.
What are ordinary workers supposed to think when Fortune 500 companies, which have been firing “excess workers” as regularly as a snake sheds its skin, pay millions to the top brass who pass out the pink slips?
Noting that American CEOs are paid as much as 12 times what CEOs in other leading industrial nations are paid, former Harvard University president Derek Bok asks, “Are American CEOs 10 or 12, or even two or three, times better? It would seem implausible.”
American CEOs lead the world in pay, if not performance, which leads to my next question: Why is so little executive compensation tied to company performance?
In 1993, 56 of 350 large industrial and service companies surveyed by William M. Mercer Inc. reported net losses. Unfazed, most of them (73.2 percent)went ahead and paid performance bonuses to senior executives. The highest bonus was $4 million, the lowest $25,000; the median was $491,000, the same as the year before.
In my business, I’d be laughed out of town if I went in and asked for a bonus after one of my walls or concrete forms fell down due to sloppy work on my part. Thanks to extensive union training and experience, this doesn’t happen. But I can guarantee you that if it did, we’d make darn sure the problem was corrected immediately. We understand that our professionalism and reputation are on the line.
And maybe that’s the problem.
In the mad dash for short-term profits, nothing is sacred. Not experienced workers, nor their families, whose lives and futures depend on regular paychecks. And not the communities that dry up and blow away after layoffs and plant closings.
But you can’t squeeze blood from a rock.
Top executives’ million-dollar salaries depend on the fingers of the folks on the job, just like the salaries of every employer in America depend on the heads, hearts and hands of millions of American workers.
But however little they pay us for them, those hands are still ours. And one of these days, when our hearts are overwhelmed by the injustice of overpaid executives, we may decide to use our heads and take our hands from our work.
And then where will you be?
(Ronald Pettengill is president of the Rochester and Vicinity Labor Council, AFL-CIO.)


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