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In my post from a couple of days ago, I linked to and quoted from this from Yahoo quoting former Labor Secretary Robert Reich:
In addition, while the economy has been expanding for nearly three years and hiring is picking up, Reich notes, “we also see some major declines in terms of median wage. And that’s particularly true for the bottom 90 percent.”In the past, economists argued that wage growth lagged in part because employers were spending more on benefits like health care and pensions. But that hasn’t been the case in the past few years. A recently released study from the National Institute for Health Care Reform shows that in 2010, the percentage of Americans with insurance who got insurance from employers fell to 53.5 percent, down sharply from 63.6 percent in 2007. “At the top of the talent chain, employers are providing very generous health insurance, deferred compensation, and everything you can imagine,” notes Reich. “But as you go down the job ladder, particularly to people who are doing routine jobs, they’re getting less and less. There has been a substantial erosion of health care benefits for the bottom 90 percent.
As I surfed the various news sites this morning though, I did find a couple of articles pointing out that some groups are still seeing their salaries and benefits go up, so all is not lost.
In the “No CEOs Left Behind” category, we have this article from today’s (April 4) USA Today, “CEO pay soars while workers’ pay stalls”:
At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.Two years of scaling back amid tough economic times proved temporary as three-quarters of CEOs got raises in 2010 — and, in many cases, the increases were substantial.
This blog post from Reuters written by a corporate board member points out a few of the problems with executive pay:
There are several factors at play as the remunerations committee and the board as a whole try to weave together pay packages.Compensation consultants.
…snip…
Personal feelings.
…snip…
A disconnect from today’s reality.
…snip…
A lack of direct accountability.
I especially like that third point. A disconnect from today’s reality indeed. And speaking of disconnects from today’s reality, we have this from Bloomberg today on rising Wall Street salaries for most:
Most Wall Street (S5FINL) employees got higher salaries in 2011, with the biggest bumps going to those at boutique banks and alternative asset managers, according to a survey by eFinancialCareers.com.The online survey of 2,860 financial professionals found that 54 percent received salary increases — excluding bonus — and 40 percent reported no change from 2010, according to an e- mailed description of the survey’s findings. Workers at so- called bulge-bracket banks got an average increase of 3 percent, compared with a 14 percent gain for people at boutique banks and a 13 percent raise for those at fund managers.
When year-end bonuses were included, average pay last year fell for workers at companies including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM)’s investment bank amid declining revenue. As year-end bonuses dropped, some banks raised base salaries that in past years contributed just a fraction of pay for senior employees.
But no matter what happens, we can be assured that Jamie Dimon will find something to whine about. Why just this morning, the Commodities Futures Trading Commission has fined JPMorgan the astronomical sum of $20M to settle charges related to the Lehman Brothers bankruptcy. TWENTY MILLION DOLLARS! (/Dr Evil voice) Why based on JPMorgan’s reported profit from 2011 of $19B, that’s a whopping .1%. By my rough math, that is less than a half day’s worth of profits.
And because I can:
Cross posted from Just A Small Town Country Boy by Richard Taylor



20 Comments

What’s all this communist BS about “wages and benefits”? A millenium ago, we all worked at clubpoint, and we liked it that way. /feudalism
Last year my friend got notice of his/her impending layoff from Pfizer. A few weeks ago the CEOs annual pay was announced… following all the layoff annoucements, his compensation tripled. And today Pfizer announced that they were cutting severance packages.
My friend fully appreciates the fact that s/he’s got a job and is getting a severance package. But knowing this cut comes on the heels of the CEOs mega-salary increase is… umm… no doubt somewhat annoying to many people who are getting axed.
Capitalism is destroying us and the planet. It must be destroyed before it destroys us.
Randall, I’m not sure some of those early death prehistoric men and woman archaeologists have found weren’t from the first riots against the bad bosses.
A B-I-L is only getting $11 an hour, yet he has worked there for 30 years. Last year he had shoulder surgery, because of the type of hard work he is did. It is repaired, but he isn’t allowed to go back to that job, because it wouldn’t take long to re-injure it, with a future repair unlikely. Their wages were kept low for over a decade to get top-notch health benefits. Their benefits have dropped, but pay hasn’t gone up. Sounds like a pay cut to me.
Yep
It pretty much makes no difference what happens at a company, the CEO pay and benefits increase.
It is hard assed work driving companies down the drain doncha know
To add to the problem of a household;s finance rents are going up as more underwater mortgages cause move outs. Healthcare has increased. So form a share of disposable income point of view household have less disposable income and benefits. Also expect more total unemployment over lifetime and longer working years.
This has nothing to do with management. The order of the day is loot an pillage, pure and simple. The blog link about corporate boardroom insulation and unaccountability is insight into Romney’s interpersonal clumsiness.
Don’t forget to thank Mr. Reich for speaking at an Outsourcing World Summit. I wonder what he said.
International Association of Outsourcing Professionals . . .The 2012 Outsourcing World Summit.. . .Summit speakers are drawn from both within and outside the field of outsourcing. Global business leaders have included John Sculley, former CEO Apple Computers, Gary Wendt, former president, chairman and CEO of GE Capital Services, and Fred Brown, past chair, the American Hospital Association. Robert Reich, former U.S. Secretary of Labor, and vice presidential nominee Jack Kemp have addressed Summit delegates.
I know what he said — outsourcing isn’t a problem.
“Outsourcing isn’t to blame for the slow recovery. The jobs recovery has been anemic because there hasn’t been enough demand to restart the jobs machine. . .Despite the long-term trend toward outsourcing IT jobs, there will continue to be plenty of IT work in the United States in years to come. In the next five years, outsourcing won’t amount to much. At most, we’re talking about a few hundred thousand jobs subtracted from an American labor market that is likely to generate 10 million new jobs.” — Robert Reich, April 22, 2004
Nothing new here for anyone who has been paying attention. Sadly, most people are engrossed with Survivor, American Idol and countless other moronic diversions. The water is simmering approaching the boiling point and yet the frogs haven’t the instinct or the intellect to jump out of the pot.
If this keeps up, I’m going to have to move from advocating for a cap on executive pay to advocating for the decapitation of executives. A few hundred CEO heads on a few hundred pikes would do wonders for responsible business practices, I should think.
My former boss once came in and addressed us about how times were tough for all of us, noting “I have a Porsche, but I can’t afford to buy a backpack for my kid.” Yes, he really said that. When he left, we took up a collection for the backpack. Least we could do, really.
Successful people are assholes. God bless America.
I have my axe blades sharpened and ready…
Laura,
May I refer you Thunderclap Newman’s only CD.If you weren’t around in the summer of 1969, it’s on YouTube and has 1 great and, unfortunately, timeless song. BTW, I believe I have a tumbrel still in my garage. You can borrow it anytime to carry your ax and a few bound passengers.
My retired husband went back to work part-time at the local military contractor where he used to work. At a meeting yesterday all the engineers were vehemently complaining about the cuts in benefits (no pension), the cuts in medical coverage while the premiums go up, and the pay freeze. (Of course these are the same professionals that just voted down a union and are Republican/conservative). What they found out was that the cuts are NOT coming from the arms manufacturer – they are coming directly down from the Energy Department! The decision for these cuts by-passes the Dept. of Defense, the navy military brass, and the contractor’s corporate CEO’s. So here you have our own government undermining the well being of its citizens behind the scenes. Unbelievable.
Same here …
This youtube video is helping me sharpen my imagination, too (hide the kiddies – seriously) …
Thanks for providing this quote. Makes it kind of obvious where he really stands.
Do you have a link to the entire speech where this comes from:
“Outsourcing isn’t to blame for the slow recovery. The jobs recovery has been anemic because there hasn’t been enough demand to restart the jobs machine. . .Despite the long-term trend toward outsourcing IT jobs, there will continue to be plenty of IT work in the United States in years to come. In the next five years, outsourcing won’t amount to much. At most, we’re talking about a few hundred thousand jobs subtracted from an American labor market that is likely to generate 10 million new jobs.” — Robert Reich, April 22, 2004
THe BBC today covered riots sparked by a Greek retired pharmacist, 77 years old, who committed suicide outside the Greek parliament building. He left a letter urging strong action against the new Greek leadership I
if they’re not voted out — and they don’t stop grinding down the people, hang’em from the lampposts.
http://www.bbc.co.uk/news/world-europe-17620421
The written report left out part of the letter read on the BBC radio this morning: If he thought he could have support from others, he would have wielded a Kalashnikov in armed revolt.
Suicides have reportedly doubled in Greece during the austerity imposition. The BBC link has other links, info.
So, how bad does it have to get to cause people to push back? I’m not sure, but I figure Bloomberg and Kelly fear that the Occupy Wall Street movement might prove very effective at bestirring the American public. Thus the heavy handed approach toward people in the early marches and gatherings this year.
I found only this press release about Reich’s upcoming speech in 2004, and it looks like only a short portion of his intended remarks.
How bad should wages be? From the CEO ? Corp. pt. of view Indentured Servitude or even Slavery would be nice.