Not only are American corporations continuing to lay off workers, but a new analysis by the Economic Policy Institute shows that for first time since the 1980s, the pay of almost all employees at all income levels has been dropping. Even professional salary workers in the top 10 percent are losing ground. It's true that benefits have been rising, mainly because medical costs are soaring. But companies are pushing more and more of those health-care costs back on to their workers.
With so many people out of work, companies assume their employees will accept the pay and benefits cuts because they have no choice. People want to hold on to their jobs.
But there's one group whose pay is not dropping. Reports out this month are showing top CEOs doing remarkably well -- even in companies whose share prices are plummeting. Both the Chairman and the CEO of Merrill Lynch pulled in over $14 million last year, including $7 million bonuses, despite the fact that Merrill's stock price dropped like a stone and the firm laid off 6,500 workers.
Five of the nation's biggest airlines reported historic losses last year. They laid off thousands of workers, got wage give-backs from the remaining rank-and-file, and are seeking billions of dollars from Congress. But -- get this -- theCEOs of these airlines all got raises.
The CEO of American Airlines actually pushed his employees to accept pay cuts, while secretly creating generous bonuses and bankruptcy-proof retirement plans for himself and other top executives. That move ultimately cost him his job. But this is only the most flagrant example. Across corporate America, the compensation of top executives continues to rise, often well into the 8 digits,while just about everyone else's pay is dropping.
Corporate public-relations types say the big executive pay packages are justified in hard times like this because retaining the CEO and other people atthe top is more important than ever. But you've got to wonder: Why is it so important to keep a CEO who's been in charge of a company that's going down thetubes? What are the corporate directors thinking? If they believe employees whose pay packages are shrinking while CEO pay is expanding are going to put inthe extra effort to make their companies profitable, they don't understand human psychology.
The fact is, it's times like this, when the going is hardest, that people need to feel they're in the same boat. That's the only way they'll pull together. And it's times like this when employees must pull together. Front-line employees who are closest to customers, technologies, and production systems are often in the best position to know how to deliver better products and services more efficiently -- so their commitment is crucial Most employees will accept a cut in pay and benefits and continue to work hard-- if they think everybody in the company is sharing the burden. "Shared sacrifice" is what the CEO of American Airlines asked his employees for.But he didn't share in the sacrifice. It's just plain naive to expect employees to pull together when the big boys in the executive suites are pulling companies apart.
