Let’s consider an imaginary company in America, a publicly-traded corporation with 1000 employees who have just announced annual profits of 100 million dollars.
Their accountants say that they owe 10% in government taxes, so the question arises about where the remaining 90 millions go. There are three groups with legitimate claims on the company profits: management, shareholders and regular workers.
Forty years ago the average CEO’s salary in America was twenty times more than one of the company’s line workers; today the ratio has climbed to an astonishing two hundred and seventy. If we take the average worker’s salary as $50,000, that gives the CEO annual compensation in multiple millions.
That is how the cake is divided. The corporate executives and the shareholders are represented at the table when the profits are divvied up and they take good care of their interests, but the workers have no voice in the decision-making. The result is that, despite big increases in corporate profits, ordinary workers’ salaries have barely matched the inflation rate since the 1970’s. Surely a classical example of a rigged system where the majority of those who contributed to the company’s success have no say in the distribution of the profits.
In the same 50-year period union membership has declined dramatically. Now only 6.4% of private sector workers carry a union card; the figure was about five times that in the 1970’s. The union contracts negotiated at that time ensured steady improvements in the lives of workers and their families. In addition there was a strong ripple effect on the wages and conditions of non-union workers as employers felt that they had to remain competitive in their salary structure.
The dramatic growth in income inequality in the United States is closely related to the decline in union membership.
Even today union workers earn up to 30% more than similar employees in companies that do not have an organized voice. And trade union members nearly always have better healthcare, vacation and pension benefits.
Public sector workers, especially in the tri-state area, are highly unionized and their wages, pensions and working conditions reflect a powerful voice at the negotiating table. As a retired teacher, I am grateful that I am represented by a strong union, the United Federation of Teachers.
It is hard to see how the lot of most private-sector blue-collar workers will improve without a strong voice at the corporate table. This will entail an unlikely spurt of growth in trade union membership or legislation in Washington that would mandate this change.
Unfortunately, Republicans would strongly oppose any legislative proposal in the direction of worker representation on company boards. Their recent taxation policies clearly favor corporations and the rich. They promise that higher company profits will somehow dribble down and result in salary increases for workers – a very dubious proposition that doesn’t meet the common sense test.
Democrats usually get the support and financial backing of the big unions and their economic and taxation policies are much more likely to favor the middle class. President Obama did raise taxes on the affluent to help fund the Affordable Care Act, and Hillary Clinton promised that, if elected, she would propose a bill that would encourage some profit-sharing by companies – surely a step in the right direction. Still, overall, Democrats lack conviction in this regard and show no plans to address these issues.
Of all the Christian denominations, the Catholic Church has been most associated with supporting workers’ rights. From Pope Leo the X111’s revolutionary encyclical Rerum Novarum in 1891 to John XX111’s Mater et Magistra 70 years later to many statements by the present pope, Rome has been clearly in the workers’ corner, favoring their demands, including the right to organize and to negotiate a living wage. Mater et Magistra goes further, asserting that workers should be co-owners and thus sharing in the profits of the enterprise where they work.
Unfortunately, very little is heard from the pulpits on the glaring injustices suffered by ordinary workers. Why are there no outraged church voices raised against the immorality of stagnant employee wages and reduced worker healthcare benefits when companies are making record profits and CEO’s are raking in millions? Instead we have top leaders with names like Ryan and Brady disgracefully leading the charge for improving the lot of the already well-heeled.
The millions of workers who in frustration voted for Trump last year must surely realize by now that this administration in Washington does not respond to their needs. They should rally around an assertive trade union leader – like a Cesar Chavez or a Mike Quill – to realize the power of worker solidarity. A tall order for sure, but otherwise the remuneration of top management compared to the pay of ordinary workers will widen even further.