“Gentlemen, as you can plainly see: workers’ wages have gotten out of control”

The recent anti-union rhetoric coming out of both the United States (Re: Auto bailout) and Ottawa (Re: OC Transpo strike) is simply disturbing.

The idea that all of the vitriol is directed toward workers as the cause of the problem is simply laughable.  A non-profitable, failing company is a non-profitable failing company no matter what it’s employee pay structure is like.  But I find it interesting that nobody seems to be directing any hatred or anger toward the rate of pay of CEOs and executives who don’t produce anything, but collect a very hansom salary on the backs of workers who actually do the work.  The average salary of CEOs is now more than 821 times that of minimum wage workers and more than 262 times that of the average worker (both unionized and non-unionized).  But yeah, the problem is the workers.

workers-wages

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14 Responses to ““Gentlemen, as you can plainly see: workers’ wages have gotten out of control””


  1. 1 Beijing York 13 December, 2008 at 3:21 pm

    It really is unsettling to see so much misinformation and plain idiocy. Even off-shore, low wage operations are suffering from this global economic crisis. It has nothing to do with unionized wages being too high.

  2. 2 Jamie 13 December, 2008 at 8:43 pm

    The appalling anti-union babble is in preparation for the economic crisis – capital knows it will have to keep down unions. It’s something we have to fight back against, or workers will have a very hard time dealing with the next few years.

  3. 3 Josh 13 December, 2008 at 10:36 pm

    It’s kind of irrelevant though, because there’s only one CEO, so his salary as a percentage of the company’s total payroll is still negligible. Almost all the payroll money goes to workers, not the CEO, so if you want to save money, it has to come from there.

    Now the entire management class added together does add up to significant money, that could be saved by cutting them or their salaries. So why not focus on them instead of the CEO? As usual, the upper-middle-class are the ones oppressing the working class, and taking the lion’s share of the money, but trying to deflect the blame onto the handful of super-rich.

  4. 4 ian in hamburg 15 December, 2008 at 2:10 am

    I remember a really good editorial cartoon from the early 80’s. A steam engine labeled “the economy” is about to head into a tunnel, called “Recession.”

    But the smokestack – labeled profits – gets in the way. Two fat cats are looking at the wheels – labeled wages – and say: Looks like we’re gonna have to cut those things in half to get through.

  5. 5 Michael 16 December, 2008 at 12:03 pm

    I think, if I understood correctly from CBC, that the average pay for GM workers was 26 dollars an hour (or maybe base salary), but the actual cost of employment, due to pension plans, health care etc. was $ 75 per hr.

    This raises the obvious question, why, instead of eve considering a baleout, does the US federal government not use this recession and financial mess to invest in health care. If they instituted a national health care plan for the same amount of money they are wasting on baleouts and handouts, then many companies would have their costs reduced substantially, and might even avoid bankruptcy while preserving jobs.

  6. 6 Nick J Boragina 20 December, 2008 at 1:51 pm

    Unions keep demanding wage increases beyond inflation. Inflation is, partly, tied to wages, so if everyone demanded a 4% raise, inflation would be at least 4% (in a rudimentary way) The problem here is that this only works because there are non-unionized workers who get screwed. Why are you complaining about people who make $25 an hour asking for more when you could complain about people who make $10 an hour who can’t get more?

    As for CEO’s, why not just institute an increased tax bracket for those making absurd amounts of money. 50% over a million and 75% over 10 million seems fair to me.

  7. 7 djn 24 December, 2008 at 12:56 pm

    Look at real wages over the past 30 years, according to Statscan. They’ve stagnated for the middle 60 percent of Canadians, declined for the lower 20 percent, while climbing dramatically for the upper 20 percent.

    The crisis is not being caused by wage increases anymore than was the case in the 1970s when this claim was made again. Large wage increases were demanded in the 60s and 70s because of rampant inflation caused mainly by the war in Vietnam.

    There’s also the long-term decline in the rate of profit to consider when talking about this crisis.

  8. 8 The Big Kahuna 11 February, 2009 at 9:49 am

    Paul,

    While I agree that CEO wages are completely out of control, and I completely disagree with Josh that CEO pay is negligible, I still have to take exception to your statement that, “A non-profitable, failing company is a non-profitable failing company no matter what it’s employee pay structure is like.” Because that just isn’t the case and even the most basic entry level college accounting course would teach you that not all businesses maintain large profit margins or are hyper profitable. In the failing US auto industry for example an average Union worker costs more than $70/hour while the hourly wage of his counterpart in Japan is somewhere in the $40’s. No doubt there are other contributing factors, however, wages are definitely one. Also to state that CEO’s produce nothing is factually incorrect. That’s like saying that mathematicians, scientists, or your college professors produce nothing. What they produce is often of dubious value, but even their junk like the junk built by the US auto industry is production.

    Not to be too nit picky, but while the word hansom in your original post is properly spelled it is incorrectly applied in the context you used it. You should have said, “handsome”. I’m just saying.

  9. 9 RPJ 13 February, 2009 at 2:59 pm

    Actually you have bought into management’s characterization of the union’s pay package, used to justify their solution of wage rollbacks. While wage & benefit costs are indeed part of the problem in their industry, today’s auto-worker is not the root of the problem, nor should he/she bear the brunt of the whole solution. The $70 figure bandied about is based on the company’s wage/benefit cost per “man-hour”. That basically means the math takes all of the company’s wage and benefit costs and divides it by the number of hours currently being worked this year. If you look a little deeper, you will be able to see that today’s real union person doesn’t get that money or even half of that money. These costs relate to pensions and benefits still being paid out to retired workers and laid-off or down-sized workers that were offered packages to entice them to retire when the auto-industry started to shrink after the big boom years (it is still shrinking). The foreign car makers don’t have these costs because they are Johnny-come-latelies to this game and have not built up the numbers of retired workers that are being supported by the older “Big 3”. You are starting to see the same phenomenon happening nationally for everyone as the baby-boom bubble retires and fewer workers are asked to support larger numbers of retirees until the ratio becomes unbearable. What you can’t lose sight of is the fact that Management is proposing to resolve all the ills facing the auto industry by strangling the lowest people on the ladder as always seems to happen. Never mind the fact that their executive salaries are several times higher than their foreign auto company counter-parts and their shareholders have lived handsomely for years on the profits and dividends generated. These elites don’t feel any need to bear an equal share of the pain to get their companies healthy again. Hell, they don’t even want to cut back on flagrant frills such as several private jets each and lavish entertainment events that would make the Romans blush. Talk about “the divine right of Kings” philosophy. The quicker everybody quits counting the peas on the other guy’s plate so they can put all the responsibility for change on someone else, the quicker we will all be able to correct course and start the slow climb to recovery (and I’m not just talking about the auto industry here). This has to be done together folks and it is about time we stopped preserving the fortunes of the ruling classes at all costs. Surely the peasantry (us) are now sufficiently educated that we can’t be hoodwinked as easily as we have always been in the past (giving up our few crumbs so they can keep their tiaras).

  10. 10 The Big Kahuna 13 February, 2009 at 10:21 pm

    Paul,

    I know you’re a busy grad student, but when you have a chance I’d like for you to read an essay by an author we can all agree on, George Orwell, entitled: Politics and the English Language. Afterwards it would be interesting to hear your take on how it applies to commentators like RPJ an others on your blog.

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  12. 12 Ryan 12 September, 2009 at 1:21 pm

    This is appalling. and not for the reasons that all of the other commenters seem to believe. I am astounded that the topic of the “overpaid CEO continues to crop up, as if it were just common sense that executives were just joyriding through their careers, swindling corporations out of the workers’ hard earned pay. Value to a company, and therefore wage, is no determined by what you do, but by how easily you can be replaced. To say “CEOs and executives don’t produce anything, but collect a very hansom salary on the backs of workers who actually do the work” misses the point entirely, and shows very clearly that the author completely lacks the skill set and understanding required to manage anything at all. The truth is that “workers” are a dime a dozen because they’re easy to replace, so there is no incentive to raise their pay. CEO’s are paid higher because their skill sets are rare and therefore valuable. I’m sick of all the anti-executive prattle.

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