Today, Arianna Huffington posted one an article that made me especially thoughtful. For the last several years, Americans have felt the pain of the shockwaves created by some sizable problems in the financial sector. What Arianna brings to light goes far beyond Wall Street however.
Amid all the arguments made, this particular quote stuck out to me: "Thirty years ago, top executives at S&P 500 companies made an average of 30 times what their workers did -- now they make 300 times what their workers make." Now, I am all for the American Dream, and the belief that people should be able to rise to whatever heights that they can bring themselves up to, but 300% more than the people that do the work to make you successful? That means if the average worker is bringing in $40,000, their execs are making TWELVE MILLION dollars! The imbalance there is stagering.
Before I go to far, let me say that I totally value the worth of being in charge, and having the responsibilities that executives and business owners have. Being in charge means that you carry the biggest responsibility. You are responsible for the company, its image, and the people who work for you. That's a lot to carry around, and certainly one should be well compensated for all that work. What I can't say- and I say this as someone who was and will again be the boss- is that this stress and responsibility is worth 300 times that of those who work for me.
Another concern that I have with big businesses is that unlike true Capitalists- who I view the vast majority of SMALL business owners to be- most of these execs are not the ones that suffer if their business is. When my business did well, so did my finances. When my business struggled, so did my budget. That's part of the trade off. The company's success rests on your shoulders, so you should reap the rewards. So to should you shoulder a large portion of the burden when things aren't going well. When companies are laying off hundreds of thousands of employees because their budgets got out of control, but then turn around and give their executives multi-million dollar bonuses, there is a significant problem. The workers aren't the ones that make decisions which lead to a company's success or failure, the execs are. While the workers are the foundation upon which a company is built, the overall effect that an individual at the "bottom" has on a major company's bottom line is miniscule, and yet they are the ones that are feeling the pain. They are the ones who are having their benefits cut, losing their jobs, and not getting raises.
More infuriating is the fact that for the average American, a 10% cut in benefits or pay is earth shattering. To an individual making several hundred thousand or worse several million dollars, such a cut isn't felt in nearly the same way. The cost of insurance, health care, food, and living for the execs doesn't scale with their income. Basic needs and a decent quality of life can be met with some semblance of a baseline. The closer your income is to that baseline the more traumatic it can be to lose any of that income.
I don't believe that everyone should make the same amount of money. I do believe that those who take risks and work hard should receive financial benefit for what they do. What I don't believe is that anyone needs to be so far out above the people they work with that there isn't even a comparison. I believe in Capitalism, but many in this country who now call themselves Capitalists aren't actually upholding the values they claim to. When a man or woman has been able to put themselves in a nearly unassailable position, where the above average man with grit and determination can't ever even dream of competing with them, you have simply created a new type of royalty. The system we have today more closely resembles feudalism than the dreamed Capitalism, with only the fringe of small and medium sized business owners struggling to maintain their rightful foothold or true Capitalism in the country and system that this country was originally built on.
