I recently read about a cash-strapped seven-year Walmart employee in Louisiana who says she'd live in her car if she could figure out how to do it. Another Walmart employee claims that many Walmart "associates" actually do that to make ends meet, but it's really not an option for the 52 year-old "front-of-the-store" manager.
The Louisiana woman used to get by on her full-time, $11.60 per hour paycheck, but she's struggling now as a result of her store's decision to cut the hours of full-time workers and increase the hours of lower-paid, part-time workers. Many other Walmarts have done the same, helping America's largest employer emerge from two years of declining profits.
During the corporation's downturn Chief Executive Officer Michael Duke's total 2011 compensation was $18.7 million -- 725 times the wages of Walmart's average worker.
Walmart isn't the only company balancing its books on the backs of its workers, which is one reason why many corporations have turned the corner while more and more Americans hit hard by the recession are still out of work or working for minimum wage or close to it.
There is growing support for a bill in congress that would raise the minimum wage. The legislation would increase the wages of 30 million Americans and provide a much-needed boost for working families and our ailing economy.
While raising the minimum wage is a laudable goal, the widening income gap between the rich and the rest of us must be addressed if we are to salvage the bulwark of our economy -- the middle class.
America is becoming a country of "haves" and "have-nots." Most of the wealth generated by U.S. workers over the last 40 years has gone to the richest 1 percent of our nation, while the middle class has seen no real improvement in their buying power or standard-of-living. And things are getting worse for an increasing number of middle class families who are falling into poverty because of the Great Recession.
You don't have to be an economist to be alarmed by the financial chasm opening up between the rich and the rest of us.
The average CEO made 380 times the wage of the average American worker in 2011. In actual dollars, that comes to $34,053 for the worker, and $12.9 million for the CEO -- a wage disparity far greater than that of any other country.
The median individual wage in 2010 was just $26,364 -- which means that half of all workers made that much or less that year. Significantly, the average wage of all workers is going up because the incomes of the rich are going up; but median income is falling because of the continued erosion of the incomes of the middle class and working poor.
There doesn't seem to be any finish line in this race to the bottom. Big business worships at the altar of the "Free Market" which rewards those who, in effect, impoverish hardworking people to feed the insatiable appetite of the rich. This transfer of wealth to the rich from the poor and middle class is most evident in corporate America.
What can be done to deal with growing income inequality and close the astronomical divide between the billionaires and millionaires and the rest of America?
A maximum wage law.
A maximum wage law would limit the amount of compensation an employer could receive to a specified multiple of the wage earned by his or her lowest paid employees.
In other words, if federal law limited an employer's income to no more than 100 times the wage of his or her lowest paid workers, and, if, for example, those workers made $25,000 per year -- the employer would make no more than $2.5 million per year. The employer's compensation could not increase above that amount unless his or her lowest paid workers got an equivalent raise as well.
The idea is not unprecedented. In a time of massive domestic and economic distress, President Franklin Delano Roosevelt issued an executive order during World War II limiting corporate salaries to no more than $25,000 per year after taxes. The president believed that if middle class fathers, brothers, and sons were putting their lives on the line for just $60 per month, the rich should be required to make some sacrifice too.
FDR's maximum wage proposal was bold and brilliant. Believing that all citizens should help out with the mobilization effort, he refused to be bullied by the rich, and never lost sight of the fact that fair compensation and a thriving middle class are essential elements of a healthy economy -- particularly during a national emergency.
A maximum wage law would actually ensure that "a rising tide [would lift] all boats," and encourage competition while improving lives at every level of society.
The minimum wage certainly must be raised. It's also time to start a national discussion about creating a maximum wage law.
Still smarts that Walmart is a non-union workplace??
By the way, how much does the average union president make???
The inconvenient reality is that a competent CEO maximizing profits makes far more for the shareholders paying the compensation than 380 times the wage of the average American worker.
A truly visionary CEO like Steve Jobs is worth many thousands more to Apple shareholders than your average engineer at Cupertino.
Publicly traded Companies are not public domain outside. They are private entities that have ownership shares available for SALE to the general public who then become owners. They are no more owned by the general public than is an apartment house by the tenants.
In AMERICA what is rock bottom is that our Constitution is an exclusionary document that EXCLUDES from the Federal Government exactly the power you wish it had.
Even now, a Japanese CEO in the top 100 companies makes on average $1.5 million dollars, a German CEO makes $6 million while an American CEO makes $13 million.
I doubt our CEOs can justify that kind of discrepancy--particularly to their stockholders.
Japan is an extremely closed society thus their compensations are extremely low. This has caused great difficulty with Japan expanding businesses in foreign nations. Several VP's make more than their presidents, and many presidents have stocks in the companies worth 100 million plus that is not salary or compensation. The Japanese economy has been rather shallow since 1980.
Please research Japan's immigration and minority population. I liked Japan, but honestly was glad coming back to the USA.
They are a proud people, profusely respectful... yet go to great lengths of clarity making sure you understand you're an outsider if not purely Japanese
I never felt threatened in Japan ... I was always reminded, however, I was at best a tolerated guest who should always consider I might have overstayed my "welcome" guest status
Only progressives despise CEO's salaries, but oddly care less about Hollywood elites, sports athletics, and Jeffery Immelt
Let's say something generous, like, 30x the lowest end worker, as a maximum for the top level worker. That means that if your lowest end worker is earning 10k a year, the most you could earn would be 300k a year. If you want to earn more, you have to divide up the profits amongst the workforce, starting with those on the front lines. If you cannot live with that, you should not be running a company.
Do you really want to know what would happen if you rolled out a policy like this? You'd see companies cut full time jobs to part time jobs and you'd see a lot of contracting out for lower level work thus eliminating quality benefits for a lot of employees.
Let's next insist on a law that all those low wage earners must go to those uneducated professional parasites with their medical problems as Social justice toward equality.
My first company saved hundreds of lives ... mostly minorities. What precisely did deadbeat dads and single moms create or contribute to humanity besides IOU's?
The day America passes a law like that there will be no work for uneducated people. If I have to pay a porter 125k a year, you can rest assured I'll demand a master's degree at minimum
It's far cheaper and easier to enforce forced abortions of single mom's and deadbeat dad's. We equally save humanity for only those willing to contribute more than free dinner plates and Hugh appetites toward future generations.
If you can't support your personal family, you're in no position telling others how to conduct their businesses or spending their profitable success
If a business is profitable, it is not just the top person, the upper echelon, that made that happen. If a business is succeeding because of the work of everybody in it, I think everybody should benefit.
It improves the workplace, for everybody, and frankly, I think no single person should be making millions off of the work of people making barely above the poverty level, if that.
If you disagree, that is fully your right. I am stating we would all be better off if there was a law requiring a touch of equality, for the work done. The amount is debatable, But SOME level of accountablity to workers and their economic status should be enforced on the presidents and ceos of companies.
I do not see a problem with running a business where profits are mostly given to the people in charge, but there has got to be an upwards limit, and even if we agreed on, say, 50 times the minimum, it would be better than what we have now.
A progressive (and at the top, very steep) taxation model against stock option and hedge fund profits would further this cause a lot more.