When the CEO gets a 40 percent raise, what do workers deserve?
This issue is at the heart of the United Auto Workers union’s strikes at assembly plants owned by Ford FN, General Motors GM-N and Chrysler’s parent company, Stellantis STLA-N.
UAW President Shawn Fain had initially called for a 40 percent increase in worker pay over the next four years — a figure based on a roughly 40 percent increase in pay for company CEOs over the course of of the last four years, at a time of stable profits for two. of the three automobile manufacturers.
American automakers are not the only ones paying massive sums to their executives.
CEO salaries and benefits have soared in recent decades, but those of workers have not kept pace.
The ratio of CEO pay to the average unsupervised production worker at America’s largest companies has risen from less than 40 to 1 over the past four decades to nearly 400 to 1, the Economic Policy Institute calculated in 2022.
By contrast, some workers from the Big Three automakers protesting this week on the highway between Ohio and Michigan said they had to work two jobs to survive.
Restructuring the U.S. economy to make things more “fair” for workers and voters is a long-standing goal of President Joe Biden’s economic plan. Capitalism is supposed to work “for the good of the American people,” Biden said, but decades of “trickle-down” tax cuts for corporations and the wealthy in the United States have undermined the system.
As strikes began last week, Biden echoed Fain, saying automakers should offer more of their profits to workers. But the White House has little influence outside the bully pulpit and is instead exploring ways to avoid the long-term economic impact of a walkout.
Attempts to address rising CEO pay in recent decades have not had the desired effect, said Rosanna Landis Weaver, director of wage justice and CEO compensation at As You Sow. a non-profit shareholder advocacy group.
Salaries were kept low, but compensation for top executives through the use of stock options that many viewed as free money increased, she said.
“Every time you tried to reduce compensation in one area, the balloon came out in another – the balloon was never compressed enough to burst, just enough for the air to go elsewhere. »
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