Recent Items

CEOs Call for Wage Increases for Workers to Address Inequality! What’s the Catch?

Yves here. This post describes how the recognition among the super-rich that it might behoove them to share more with the peons is entirely about their self-interest, and even then, rather narrowly conceived. It still seems astonishing that what passes for our elites today seem unable to grasp that the risks of widening income disparity are bigger than they conceive. It’s not just the threat of violence. For instance, poor and lower income populations with inadequate access to health services are a breeding ground for public health disasters. Moreover, public health studies have repeatedly found that highly stratified societies produce shorter lifespans, even for among the top echelon. We quoted the Financial Times’ Michael Prowse in 2007 in one of our very first posts:

But recent epidemiological research suggests that finance ministers, too, may some day be required to issue health warnings. There are good reasons to believe that policies that promote greater economic inequality – such as budgets that slash top tax rates – cause higher rates of sickness and mortality….

In Britain, these new arguments are most closely associated with Richard Wilkinson, a professor at Nottingham University’s medical school. Wilkinson has spent much of the past two decades painstakingly assembling the evidence for a link between inequality and sickness. But researchers elsewhere, such as Ichiro Kawachi and Bruce Kennedy of the School of Public Health at Harvard University, have independently confirmed many of his claims.

Those who would deny a link between health and inequality must first grapple with the following paradox. There is a strong relationship between income and health within countries. In any nation you will find that people on high incomes tend to live longer and have fewer chronic illnesses than people on low incomes.

Yet, if you look for differences between countries, the relationship between income and health largely disintegrates. Rich Americans, for instance, are healthier on average than poor Americans, as measured by life expectancy. But, although the US is a much richer country than, say, Greece, Americans on average have a lower life expectancy than Greeks. More income, it seems, gives you a health advantage with respect to your fellow citizens, but not with respect to people living in other countries….

Once a floor standard of living is attained, people tend to be healthier when three conditions hold: they are valued and respected by others; they feel ‘in control’ in their work and home lives; and they enjoy a dense network of social contacts. Economically unequal societies tend to do poorly in all three respects: they tend to be characterised by big status differences, by big differences in people’s sense of control and by low levels of civic participation….

Unequal societies, in other words, will remain unhealthy societies – and also unhappy societies – no matter how wealthy they become. Their advocates – those who see no reason whatever to curb ever-widening income differentials – have a lot of explaining to do.

By Jim Hightower, a national radio commentator, writer, public speaker, and author of the new book, “Swim Against the Current: Even a Dead Fish Can Go With the Flow.” (Wiley, March 2008) He publishes the monthly “Hightower Lowdown,” co-edited by Phillip Frazer. Originally published at Alternet

Peter Georgescu has a message he wants America’s corporate and political elites to hear: “I’m scared,” he said in a recent New York Times opinion piece.

He adds that Paul Tudor Jones is scared, too, as is Ken Langone. And they are trying to get the Powers That Be to pay attention to their urgent concerns. But wait — these three are Powers That Be. Georgescu is former head of Young & Rubicam, one of the world’s largest PR and advertising firms; Jones is a quadruple-billionaire and hedge fund operator; and Langone is a founder of Home Depot.

What is scaring the pants off these powerful peers of the corporate plutocracy? Inequality. Yes, amazingly, these actual occupiers of Wall Street say they share Occupy Wall Street’s critical analysis of America’s widening chasm between the rich and the rest of us. “We are creating a caste system from which it’s almost impossible to escape,” Georgescu wrote, not only trapping the poor, but also “those on the higher end of the middle class.” He issued a clarion call for his corporate peers to reverse the dangerous and ever-widening gulf of income inequality in our country by increasing the paychecks of America’s workaday majority. “We business leaders know what to do. But do we have the will to do it? Are we willing to control the excessive greed so prevalent in our culture today and divert resources to better education and the creation of more opportunity?”

Right on, Peter! However, their concern is not driven by moral outrage at the injustice of it all, but by self-interest: “We are concerned where income inequality will lead,” he said. Specifically, he warned that one of two horrors awaits the elites if they stick to the present path: social unrest (conjuring up images of the guillotine) or (horror of horrors) “oppressive taxes” on the superrich.

Motivation aside, Georgescu does comprehend the remedy that our society must have: “Invest in the actual value creators — the employees,” he writes. “Start compensating fairly (with) a wage that enables employees to share amply in productivity increases and creative innovations.” They have talked with other corporate chieftains and found “almost unanimous agreement” on the need to compensate employees better.

Great! So they’ll just do it, right? Uh … no. But he says he knows just the thing that’ll jar the CEOs into action: “Government can provide tax incentives to business to pay more to employees.” That’s his big idea. Yes, corporate wage-hike subsidies. He actually wants us taxpayers to give money to bloated, uber-rich corporations so they can pay a dab more to their employees!

As Lily Tomlin said, “No matter how cynical you become, it’s never enough to keep up.”

First of all, Georgescu proposes this tax giveaway to the corporate elite could “exist for three to five years and then be evaluated for effectiveness.” Much like the Bush tax cuts that helped drive the economic divide, once the corporate chieftains get a taste for a government handout, they will send their lawyers and lobbyists to Washington to schmooze congress critters into making the tax subsidy permanent.

Secondly, paying to get “good behavior” would reward bad behavior, completely absolving those very CEOs and wealthy shareholders of their guilt in creating today’s gross inequality. After all, they are the ones who have pushed relentlessly for 30 years to disempower labor unions, downsize and privatize the workforce, send jobs offshore, defund education and social programs and otherwise dismantle the framework that once sustained America’s healthy middle class. These guys put the “sin” in cynical.

If we want to fix income inequality, Larry Hanley, president of the Amalgamated Transit Union, has a solution. In response to Gerogescu’s offer of charity to corporations Hanley wrote: “Strengthen labor laws, and we can have democracy and equality again.”

Print Friendly, PDF & Email