The income gap between corporate executives and the average worker is wider than ever and still growing. Corporate profits and executive salaries are surging, while workers are having difficulty just making ends meet. Millions of Americans must work two or even three part-time jobs to keep up with bills. Many of the jobs being created today lack benefits, the chance for mobility, and long-term job security.
The financial gap between corporate executives and the average American worker is wider than ever. Corporate profits and executive salaries surge, while workers' wages barely keep up with inflation. Millions of Americans cobble together two or three part-time jobs to keep up with bills. Many of the jobs being added today lack benefits, the chance for mobility and the security of long-term stability.
U.S. corporate profits surged 87 percent from the third quarter of 2001 to the end of 2003, while wages and salaries grew only 4.5 percent. Last year, the average C.E.O. was paid $9.2 million dollars, including stock options. For those C.E.O.’s remaining in the same position from 2002 to 2003, their cash wages increased 14.4 percent — well below the average return to investors in their companies (34 percent) but considerably higher than the increase in wages for most American workers (2 percent). Excluding the value of options granted in the last two years, those C.E.O.'s received, on average, total compensation of $5.9 million, up 23 percent from an average of $4.8 million in 2002. Compensation of 7,500 top executives over the last decade totaled $177 billion; almost $100 billion of that came from options and restricted stock grants.
Contrast that picture with that of the rank-and-file worker caught in a major squeeze: For those with jobs, their wages barely keep up with inflation. Those without jobs cannot find new jobs equivalent to the ones they have lost. For the 85 million people who hold office or factory jobs below the rank of supervisor or manager, their average hourly wage, $15.46, is up only 3 cents since July 2003. That wage is rising at an annual rate of less than 2 percent, barely enough to keep up with inflation, mild as it now is. Today more than 28 million people, about a quarter of the working-age workforce, work full time yet still earn less than the income that marks the federal poverty line for a family of four: $9.04 per hour, a full-time salary of $18,800 a year. Child care workers can't afford the care they provide for their own children, and retail workers cannot pay for the goods they sell to others.
Millions of Americans are underemployed, working at jobs for which they are overqualified, or cobbling together a working life of two or three part-time jobs to keep up with bills. Many of the new jobs being added today come without benefits, the chance for mobility and the security of long-term stability. Americans are working for less pay than they have worked for in the past. The sectors of the economy adding jobs pay an average of $14.65 an hour, while those discarding jobs pay $16.92. Five of the 10 fastest-growing occupations over the next decade will be of the menial, dead-end variety, including retail clerks, janitors, and cashiers. More people are working part time than ever: In November 2003, for the first time, the number exceeded 25 million. Many are classified as "involuntary" part-time, either because they could not find full-time jobs or because their employers had put them on part-time schedules: 4.9 million in November, an increase of 600,000 from a year ago and 1.6 million since the recession began in March 2001.
Workplace Fairness demands immediate action from policymakers and legislators to prevent the gap between corporate executive and average workers from widening any further. Federal legislation to limit corporate executive pay, closer scrutiny of compensation practices, and requiring companies to expense stock options will help curb the tide, as will demands from consumers and stockholders for more responsible compensation practices. It is essential to immediately raise the federal minimum wage to a level which will lift workers out of poverty, and which is scaled to inflation to prevent workers' interests from being held hostage to political whims. Allowing more workers to unionize will also boost wages at the lowest level, so we support strengthening labor laws so that low wage workers can bargain for better wages and benefits. We support the efforts of the living wage movement to boost salaries to a level which keeps full-time workers out of poverty.
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