Protests, Not Parades, This Labor Day

trash driverLabor Day is traditionally a time for picnics and parades. But this year is no picnic for American workers, and a protest march would be more appropriate than a parade.

Not only are 25 million unemployed or underemployed, but American companies continue to cut wages and benefits. The median wage is still dropping, adjusted for inflation. High unemployment has given employers extra bargaining leverage to wring out wage concessions.

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity.

CEO pay, meanwhile, has soared. The median value of salaries, bonuses and long-term incentive awards for CEOs at 350 big American companies surged 11 percent last year to $9.3 million (according to a study of proxy statements conducted for The Wall Street Journal by the management consultancy Hay Group.). Bonuses have surged 19.7 percent.

This doesn’t even include all those stock options rewarded to CEOs at rock-bottom prices in 2008 and 2009. Stock prices have ballooned since then, the current downdraft notwithstanding. In March, 2009, for example, Ford CEO Alan Mulally received a grant of options and restricted shares worth an estimated $16 million at the time. But Ford is now showing large profits – in part because the UAW agreed to allow Ford to give its new hires roughly half the wages of older Ford workers – and its share prices have responded. Mulally’s 2009 grant is now worth over $200 million.

The ratio of corporate profits to wages is now higher than at any time since just before the Great Depression.

Meanwhile, the American economy has all but stopped growing – in large part because consumers (whose spending is 70 percent of GDP) are also workers whose jobs and wages are under assault.

robert reichPerhaps there would still be something to celebrate on Labor Day if government was coming to the rescue. But Washington is paralyzed, the President seems unwilling or unable to take on labor-bashing Republicans, and several Republican governors are mounting direct assaults on organized labor (see Indiana, Ohio, Maine, and Wisconsin, for example).

So let’s bag the picnics and parades this Labor Day. American workers should march in protest. They’re getting the worst deal they’ve had since before Labor Day was invented – and the economy is suffering as a result.

Robert Reich
Robert Reich’s Blog

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Comments

  1. Susan says

    Stockhoders who do no work at all? Who do you think invests money into their 401k’s ? It is hard working people saving for retirement. How strange that some people forget who the stockholders of companies are.

    And, yes CEO’s should get paid fairly. After all they work to make the company profitable so many people can have jobs. The more profitable the company the more jobs there are. And the money that goes into stock and profitable 401k plans for workers. Jobs, jobs, jobs. No wonder there are no jobs with that kind of thinking.

  2. Ryder says

    Wait, let me get this straight Robert….

    Obama has us in FOUR military conflicts now… including regime change against a country that was no threat to the US…

    The last time that happened, there were cries like:

    “Not in my name”
    “No war on Libya”
    “No blood for Oil”
    etc.
    etc.
    etc.

    … and you are calling for people to take to the streets, not because we are still interrogating prisoners at Gitmo… not because we are losing a costly war in Afghanistan… apparently all that is ok now that we have a “historic” Nobel Prize winning President in office…

    No, you want us to take to the streets because we aren’t Socialist enough, and need more government intervention and spending, while at the same time we crack down hard on companies in order to convince them to not move operations out of the US? I’m sure if we berate them enough, and pass many more new requirements to do business in the US, they will soon see the light and realize what a business paradise America is, and move their facilities back to the US.

    I’m glad you thought this through carefully.

    You do know that America has one of the highest corporate tax rates in the industrialized world already… right? (State + Federal) Only Japan has higher rates… and surprise… they are in deeper debt than we are.

    I wonder if US businesses are as masochistic as you seem to believe….

    When many, many, many people predicted, long ago, that anti-business policies in the US would drive jobs oversees, and then it happens… don’t you think it’s time to say: “Dang, you were right. My bad.”

  3. Jon Williams says

    I think it would behoove you and others who rightfully criticize obscene CEO pay practices to also write about what the rest of the bunch in American executive suites are taking home. We tend to put CEOs on a pedestal and think of them like sports greats, hence thinking, “Well, it’s just one person, under all that pressure and obviously very talented.” But we need to consider that far more people than that are enriching themselves at least in part by impoverishing those that work beneath them. Stockholders, who do no work at all, amply reward execs who are willing to turn a blind eye to economic injustice.

    • Ryder says

      I’m a stockholder, and I bust my rear 5-6 days a week… I have stock in the company I work for, and in other companies that I don’t. In other words…. working people invest their money. To say stockholders don’t work is just nuts. Maybe some… retired grandmothers, like mine, bought stock when they were working… and hold that stock into their retirement years for income. I hope you don’t have a problem with that.

      I think you are confusing stockholders and investors.

      How do you know that investors *amply* reward anybody? I’m sure it’s like most things… some CEOs get paid a great deal, others get paid little, most somewhere in the middle.

      What you have to understand is that there is no such thing as “economic injustice” in a world where there are employment regulations. Since we have employment regulations aplenty, if you adhere to them, then that is all you need to do. The question of justice falls away, because the reasonable answer now is “Well, we’re adhering to all employment laws… what else do you want?”.

      It’s just like speed limits…

      You will never hear a cop say “I am ticketing you because your speed was endangering drivers around you.” (the concept), you will only hear: “I’m ticketing you because you were driving 75 in a 65 mph zone” (the law).

      Laws REPLACE concepts. Progressives, passing labor laws, have thus killed off the concepts they were seeking to address.

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