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Monday, June 27, 2005

Corporate Welfare for the Rich, As Usual

Yes, at the risk of sounding tiresome, AnonymousIsAWoman is going on yet another rant about the the corporate class and their promotion of corporate welfare for the rich and class warfare against their own employees. The reason it's not more readily apparent is because the same newspapers that report on the perk-laden compensation packages of CEOs on their business page and the benefits cuts and givebacks of ordinary workers on the front page seldom connect these two phenomenon in the same article. Nor do they connect the business news to the political page despite the fact that the high rollers of both parties, but especially of the Republican Party, are often the same corporate moguls and captains of industry that you read about on the business page.

Most people are familiar with the plight of workers in the airline industry who have had wages cut practically in half and lost pension plans they were counting on for retirement due to the business problems of their industry. But rarely do those articles mention how much the various airline CEOs have made in wages, benefits and extra perks on top of the benefit packages, even while their own investors were losing money.

Some of those additional perks include corporate box seats at expensive sporting events (I've been in some of those party rooms and they are luxurious), use of corporate jets, corporate cars with drivers, expensive apartments and homes, maid service, etc. Of course, most of these CEOs, and even other top officers in companies, can well afford to buy these services with the stunning salaries they make. But they feel entitled to letting their companies foot the bill instead because this has become the industry standard, even in companies that are losing money.

And these perks add up to big bucks too. So when you look at the sky high salaries that CEOs and other top executives make, you have to also factor in all the standard retirement benefits, generous pension plans, golden parachutes (yes, they're still around) and also these additional perks.

Today's Washington Post has an article describing some of these perks and explaining why most Fortune 500 companies' top executives get them, even when their companies' stocks are plunging downward and investors are losing money. Although the article doesn't include the salaries and benefits of the CEOs of some of the most notorious failures, those in the airline industry, the Post does name other names in other companies that have failed to be profitable.

At the same time, it's useful to remember that wages for ordinary workers, including middle management, have remained flat in virtually all industries. Many of the same companies that are rewarding their top management for basically not performing well in the market are cutting jobs on the front line. In addition, they are cutting salaries and benefits for those who remain employed.

When so many jobs are either being eliminated due to automation or being shipped overseas to sweatshops, it's hard to object to these cuts, even though you know your top boss certainly isn't sharing the pain.

Which raises several questions.

The first is what happened to leading by example? When a company is losing business, losing profit and losing market share, most sensible people would be willing to sacrifice to turn around the business losses. Back in the old days, company loyalty would be a strong motivator to do this. So would rational self-interest. Nobody benefits when a company goes belly up.

However, when a company starts to improve, why is it that only upper management reaps the rewards and is so unwilling to share them with their fellow employees?

When did we as a society decide it's okay for the top one percent to be so greedy that they grab all the perks without acknowledging that they - or any company - would be successful without all of their employees performing at a peak level.

When a company has a profitable year, it's a given that its upper management will get the largest share of the resulting bonuses. And nobody begrudges it to them. But just as their efforts contributed to the success of an enterprise, so did every other worker who showed up on time every day and did their job effectively. Success should be seen as a joint endeavor where everybody gets rewarded for his or her contribution. Yes, even the janitor who keeps the plant or office clean so other employees have better morale and safe and sanitary working conditions.

Obviously, the CEO, the Vice President, etc., will get a more generous reward than a janitor or factory worker. Most Americans are remarkably free of resentment and are okay with this. As long as they have decent health benefits and make enough money to afford comfortable homes, food, clothing and an education for their children and have some money left over for modest entertainment, most people don't resent it when others have more or fancier items.

In other words, if our needs are met and we are comfortable, we are happy to work and to contribute to the success of our bosses and see nothing wrong with their having more. We accept the reason for such inequity, which is that theirs is a proportionally greater contribution to the overall success, or that they are subject to a greater risk. We understand the greater monetary risks of investment so we don't resent its greater rewards

But when the economy goes bad, when companies are not performing successfully, and when workers are losing their livelihoods, the formula goes awry. If the average working person is asked to sacrifice in hard economic times, they should be invited to share the rewards in the good times. And surely, in hard times, the top executives should share some of the sacrifices. That's what is known as leading by example.

It's also known as accepting personal responsibility for the consequences of one's actions, something the rest of us are frequently urged to do by both business and political leaders. After all, if the reason that executives get such generous benefits and perks is because of their contribution to the success of a business, then surely when that same business fails to thrive, the same executives should bear the biggest burden of responsibility for that failure.

You really, really can't have it two ways. If you are a CEO and you are the major reason why your company succeeded, so you get the most perks, then you are also the major reason when it doesn't thrive and so should give back the most perks. But that's not done.

In fact, even as US Airways recently was forcing more and more cutbacks from its employees, it's CEO went into the very same bankruptcy court that extracted those givebacks from the workers and successfully defended his right to retain his contract for millions of dollars of compensation, benefits and perks. Why?

Because he had a legally binding contract. So did the union workers, but somehow the courts thought the CEOs contract was more binding than the contract of the employees, which the court abrogated to save the airline from bankruptcy.

Yet, a more responsible, more decent CEO could have given back a few mil in perks and benefits and maybe ameliorated some of the harshness of the cuts his employees were enduring. He might have led by example and shown that he too understood the spirit of sacrifice that was required. Instead, he chose to create lasting bitterness by defending his contract and his millions of bucks at others' expense.

By the way, need I mention that this is as much what the continuing judicial battles are about as the so-called culture wars? It's easy for Republicans to misdirect average citizens with battles over abortion and gay rights. But many of the same judges they are fighting so hard to put on the federal bench are dangerous for reasons other than their views on individual liberties. They also hold views that are inimical to workers, such as the right to collective bargaining and to organize and join a union, the right to overtime pay, and other worker justice issues. And as we have seen in the bankruptcy courts, they will take away pension plans from workers while upholding obscenely extravagant perks for top management every time.

Big business probably doesn't care whether a gay couple lives together. But they care very much if they have to pay overtime or honor pension commitments that they made and then underfunded. And that's why they've invested in the Republican Party and the judicial process.

Once again, I am sorry to be tiresome but I have to say, as I always do, it's not the culture wars, it's the class wars you gotta watch to know what's really going on and how to vote.

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