Aggravated today by a New York Times story in which striking Verizon workers were forced to argue that their wages weren’t, in fact, “too high”–seeing them make the very valid point that living in the New York area and raising a family on $40,000-$70,000 a year doesn’t actually make them rich–I tweeted angrily:
“How the hell did we get into a world where workers making $60,000 are overpaid but CEOs making millions are overtaxed?”
I don’t tend to have that many Republican or libertarian Twitter followers, but when Kirsten Powers, a Fox News contributor, retweeted me, I was deluged with replies, some of which I’m reposting here (without user names, since I don’t know if these folks would care to share):
“becuase they are paying all those 60k wages. Without them, the people making 60k are unemployed.”
“Who assumes the most risk?”
“Pay is dependent upon what you accomplish for the company. If you make 60K and are not being productive..”
“If you have to threaten people with violence to earn $60K, you are overpaid.”
“because you can’t punish success. It’s anti-capitalist.”
“The workers making $60K accepted it while CEO’s demanded more, but how does the CEO’s wage negatively affect the $60K guy?”
So, some answers, shall we?
CEOs aren’t paying all those $60k wages out of their salaries. Their salaries are what they’re being paid by that same company that’s paying the workers. Running a small business is a different game: in that case, you make what’s left over. You do indeed “assume the risk”. I ran a small business for years–my parents still own it. Some years they took home $250,000. In 2009, they took home less than I did.
Verizon’s CEO assumes next to no risk. He gets paid whether the workers strike or not, whether they concede their benefits or not, and I’ll bet my next paycheck that he’s got a pretty sweet golden parachute set up even if he does get tossed out on his ass.
Taxpayers assumed the risk for Wall Street back in 2007-2008. Once again, those getting mega-rich had zero risk–we bailed them out. But while Wall Street tanked, the wealth of millions of everyday Americans was wiped out. Including, I might add, a lot of public pension funds for the very same public workers that right-wingers and these people on my Twitter feed seem to think are overpaid.
We’ve had 30 straight years of pretty much unabated tax cutting for the rich. And yet a random comment that perhaps the rich aren’t actually undertaxed on Twitter gets me lots of angry retorts–from a lot of people I’d bet aren’t rich themselves. The idea that “you can’t tax success” is ridiculous on its face: that’s what we do every single time we pay income taxes. We certainly didn’t manage to find a way to tax failure, or else Wall Street would be out of business.
Threatening to essentially tank the economy again if you are taxed is economic violence.
And the Verizon workers are demanding more. That’s why they’re striking. Actually, strike that–they’re not demanding more, they’re simply demanding not to give up the benefits that the company is contractually obligated to pay.
Now, the bigger idea behind this. The idea that somehow teachers, call center workers, janitors, secretaries, firefighters, and other so-called middle class workers are not “successful” or “productive”, and thus deserve to have their pay slashed, while millionaires are obviously making bank because they’re more “productive” than the rest of us. The idea that so many people seem to have accepted, that middle-class workers deserve to make less, even when we live in a capitalist economy predicated upon the idea that financial reward is the best and only incentive to do pretty much anything. The idea that only the ultra-rich do it for the money and need mega-compensation (and no taxes) while the rest of us work for the fun of it. The idea that workers daring to ask for a raise is slothful and wrong, while finance managers holding a gun to the head of the entire economy over a proposed regulation on their pay is just how business works.
We’ve basically internalized the fact that we’re a two-class society. “Job Creators” (the wonderfully mythic title assigned to the ultra-rich who are mostly sitting around on their asses waiting for the economy to magically get better so they don’t have to take any of that vaunted risk that capitalism is supposed to reward) and the rest of us.
Yves Smith wrote:
Businesses have had at least 25 to 30 years near complete certainty — certainty that they will pay lower and lower taxes, that they’ will face less and less regulation, that they can outsource to their hearts’ content (which when it does produce savings, comes at a loss of control, increased business system rigidity, and loss of critical know how). They have also been certain that unions will be weak to powerless, that states and municipalities will give them huge subsidies to relocate, that boards of directors will put top executives on the up escalator for more and more compensation because director pay benefits from this cozy collusion, that the financial markets will always look to short term earnings no matter how dodgy the accounting, that the accounting firms will provide plenty of cover, that the SEC will never investigate anything more serious than insider trading (Enron being the exception that proved the rule).
So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their ‘certainty’ amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.
Because of course the mega-rich aren’t “job creators.” Job creators are all of us. We pay taxes and employ federal workers. We buy things, and keep the rich in business. The fact that there aren’t enough jobs right now? It’s not because the rich ain’t rich enough. It’s because the rest of us don’t have enough money, after decades of wages being pushed downward or jobs being outsourced, squeezed, made “flexible” and just plain eliminated. We’re not spending, we’re not buying, and we’re not creating jobs because we don’t have enough money.
It’s a vicious cycle and it’s one that doesn’t look to be stopping anytime soon. The immensely popular solution, according to poll numbers, would be to tax millionaires and use that money to invest in infrastructure–creating jobs, putting money into the pockets of the broke. Even some millionaires are asking to be taxed–Warren Buffett in the pages of the New York Times.
Henry Ford was a union-busting, Nazi-sympathizing jerk, but he understood that to be successful people had to make enough money to buy his product–automobiles. The economy we have right now is the direct result of people no longer understanding that basic concept.
And thus we have people shouting me down on Twitter about cutting the wages and benefits of middle-class workers, while defending the right of the ultra-rich to keep their money. It’s class war, as Warren Buffett himself has said many times, and the best weapon the upper class has is that the rest of us continue to defend them, whether out of some mistaken idea that we’ll someday be like them, or out of a Ralph Nader-style hope that the “super rich will save us” by suddenly coming down from their mountain and hiring people (to do what, exactly?), or out of anger that union workers somewhere might be making more than you and thus a need to cut them down to size.
But maybe that last Twitter commenter is on to something when he says that the $60K employee accepted it and the rich demanded more. Maybe it’s time for all of us to start demanding more.
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