Skip to content
Catholic Online Logo

By Marshall Connolly, Catholic Online (NEWS CONSORTIUM)

5/28/2014 (10 months ago)

Catholic Online (www.catholic.org)

Record CEO pay grows while employees at the bottom are being subsidized by the public.

There are times when too much is not enough. Shareholders are revolting against gains in CEO pay, as new data shows the average median CEO pay is now over $10 million per year. This is happening as taxpayers continue to subsidize corporate profits by paying taxes for welfare programs while corporate giants pay below-living wages.

I need another raise, but not my employees. Let the suckers--er,  taxpayers subsidize them!

I need another raise, but not my employees. Let the suckers--er, taxpayers subsidize them!

Highlights

By Marshall Connolly, Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

5/28/2014 (10 months ago)

Published in Business & Economics

Keywords: CEo, pay, compensation, minimum wage, costs, welfare


LOS ANGELES, CA (Catholic Online) - From the halls of congress to the executive boardrooms, the nation's top leaders in both government and business are getting raises. Median CEO compensation has now surpassed $10 million for the first time in history, leading some to ask "how much is enough?"

Corporate executives are well paid for their work, and fairly so. The right talent can engineer the correct balance between land, labor and capital to generate profits by providing value to consumers. This is what entrepreneurship is all about. This is the fiduciary responsibility of corporate boards and directors because it is how they build value for shareholders.

A balanced scale is the Lord's delight. Let us teach others.


The ability to do this is uncommon, so those who can successfully lead a business through the highly-competitive economic arena are worth much more than the fellow on the street whose economic sense comes from a single course in high school.

However, how much is enough? At some point, employee wages are just about as low as they can go, costs are reduced to the minimum, and profits top out. After that, compensation for CEOs begins to trade off with dividends and other investments that could build long-term shareholder value. For this reason, shareholders are applying the brakes to CEO pay increases.

Shareholders have recently challenged pay increases for top executives at Chipotle, JP Morgan Chase & Co., Mc Donald's, Target, and Abercrombie & Fitch.

Meanwhile, many of these same companies profit mightily by suppressing wage increases for employees at the bottom. While a minimum wage job is intended to be just that -low paid, it doesn't make sense that a person who works 40 hours per week should still qualify for public assistance in virtually every case. The problem is most acute in urban areas where the cost of living is high.

While there's little compulsion to make minimum wage workers comfortable, since there should be incentive to improve one's own value to employers, thus justifying wage increases, these same workers should not get public assistance to survive -yet they do because their wages are suppressed.

In some egregious cases, workers who have labored for tens of years for the same employer have not received a single raise or a significant raise in pay, despite the fact they have been faithful and reliable and likely perform their work better than a new hire would.

The problem is yours and mine. As taxpayers, we have to close the gap for the worker who puts in 40 hours, but still needs extra from the public to make rent and put food on the table. This is unfair to taxpayers because a corporation that can pay an extra million to a CEO can also afford to pay an extra dollar per hour to its workers.

An extra dollar-an-hour raise would put over $2,000 per year into the pockets of minimum wage workers, which might be enough for a year's worth of groceries for a single person in most places (although maybe not anymore). That would save taxpayers just as much money and then some for every minimum wage worker that subsequently graduated from the welfare rolls.

Of course, the rebuttal is that corporations would cut jobs in the face of compulsory pay increases, but historical data demonstrates this is a popular myth. As long as the pay raise is reasonable, or made in steps, there would be virtually no reduction in the workforces. In fact, the long-term result would be opposite because minimum wage increases are never saved, but spent, which stimulates the economy and causes employers to hire more people to meet rising demand.

The other myth is that prices will rise out of control. Again, historical data shows that marginal price increases are restrained by competition and other economic forces, such as demand elasticity. Ultimately, big business takes the hit, but always seems to find new ways to deliver better value, this improving the market for all over the long term.

And consider this: CEOs are raking in massive pay increases as well as their executive staffs, yet we're not seeing prices spiral upwards because of it.

The people who lose would be those who collect our taxes, skim off enough for themselves, and then dole out the difference in welfare benefits-they'd have less work to do. They'd lose as well as the CEOs who would have to forgo a million dollar pay increase for a year.

Commentator and author, John Stossel once said that "greed is good." He pointed out, quite correctly, that under capitalism people are incentiveized to create value for others in order to get paid. Stossel was correct when he made this assessment, but there's a difference between the greed he spoke of over a decade ago and the greed we see today.

Stossel's greed is the kind of greed for food to eat, a decent car, a nice home. This is the common desire to improve one's lot in life; the hope of Joe Everyman to enjoy opportunities for a better future for himself and his kids.

However, the greed we witness at the top, in Congress and in corner offices, is about avarice, the deadly sin of wanting more for just the sake of more.

Every person who labors has the right to enjoy fair and just compensation for their labor. No person who works should be left in serious want of life's basic necessities, even if their work is considered unskilled. As long as people at the bottom of the economic ladder toil without just compensation, i.e. enough to get by without needing public assistance for themselves, then it is right for us to tell our corporate elites that they've made enough money for themselves and it's time to remember their noblesse oblige.

---


Pope Francis: end world hunger through 'Prayer and Action'


Copywriter 2015 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for March 2015
Universal:
Scientists: That those involved in scientific research may serve the well-being of the whole human person.
Evangelization: Contribution of women: That the unique contribution of women to the life of the Church may be recognized always.


Rosaries, Crosses, Prayer Cards and more... by Catholic Shopping .com


Comments


More Business & Economics

Meet the billionaires who pledged to give up their fortunes to change the world Watch

Image of

By Talia Ramos (NEWS CONSORTIUM)

Through the "Giving Pledge," men and women belonging to the upper crust of the society, with billions of dollars in their name, commit to donating a large chunk of their fortune, whether through their lifetime or through their will. Coming from the majority of their ... continue reading


World's discarded electronic junk building up into massive toxic dump Watch

Image of Less than 16 percent of global e-waste is being diverted from landfill into recycling and reuse.

By Catholic Online (NEWS CONSORTIUM)

Television sets, washers and driers, stereos - broken, discarded, and then thrown away, are creating a massively toxic waste dump of gargantuan proportions. The irony in all this "e-waste" is the fact that precious metals such as gold and silver are also thrown ... continue reading


Australian father-and-son team raises $10 MILLION for beehive project Watch

Image of The beehive symbolizes productive activity, and for father and son Cedar and Stuart Anderson of Australia, their project was literally that.

By Catholic Online (NEWS CONSORTIUM)

The beehive symbolizes productive activity, and for father and son Cedar and Stuart Anderson of Australia, their project was literally that. Nearly 30,000 people have funded their "Flow Hive" project on Indiegogo for $10 million dollars. Not bad at all for such ... continue reading


'Slow ya roll' Obama. You spoke too soon? Job growth suddenly slows down Watch

Image of

By Catholic Online (NEWS CONSORTIUM)

Intent on rallying the nation on its improved economy, U.S. President Barack Obama appears increasingly aware that threats are gaining speed that could derail job growth. LOS ANGELES, CA (Catholic Online) - "Our economy has been growing, we've got momentum," ... continue reading


Federal taxes unbelievably through the roof for February Watch

Image of Uncle Sam took in a lot of cabbage for the first few months of 2015. Why is the U.S. still trailing a momentous deficit, then?

By Catholic Online (NEWS CONSORTIUM)

Uncle Sam took in a lot of cabbage for the first few months of 2015. Inflation-adjusted federal tax revenues hit a record $1,185,613,000,000 in the first five months of fiscal 2015. Why is it that the U.S. federal government still ran a $386,537,000,000 deficit ... continue reading


Top 10 most financially important cities in the world Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

New York City is still the most important center in the financial world, according to the latest ranking made by the Long Finance in The Global Financial Index 17. In the latest rankings, it was observed that more cities in Asia are becoming important within the world ... continue reading


Apple topples AT&T from Dow Jones in reflection of iPhone's dominant position Watch

Image of The move by S&P Dow Jones Indices had been widely anticipated since a seven-for-one stock split in June 2014.

By Catholic Online (NEWS CONSORTIUM)

Largest company in the world, Apple will join the Dow Jones Industrial Average to replace AT&T. The change reflects the dominant position of the iPhone maker in the U.S. consumer economy today. The figures tell the tale: Apple has a market capitalization of ... continue reading


'Underage Red': Sephora shocks consumers with inappropriately named lipstick shades Watch

Image of

By Hannah Raissa Marfil (NEWS CONSORTIUM)

With lipstick shades called "Underage Red" and "Lolita," the cosmetic retailer brand Sephora is under fire once again. Using names that refer to young girls being described in a sexualized manner, the lipstick shades grabbed the attention of shoppers, eventually ... continue reading


Oprah Winfrey sadly shuts down Harpo Studios forever Watch

Image of 61-year-old, Oprah Winfrey continues to play an active role in Hollywood, despite the ending of her talk show and now Harpo Studios.

By Abigail James (NEWS CONSORTIUM)

Oprah Winfrey is set to shut down production at her Chicago-based Harpo Studios by the end of 2015. After much thought, the billionaire mogul has decided production for her personal network OWN will be better done in Hollywood. LOS ANGELES, CA (Catholic Online) - The ... continue reading


SHINY, RED APPLE: Computer giant is now twice as big as world's second largest firm, ExxonMobil Watch

Image of Strong sales of the larger-screened iPhones resulted in the largest quarterly profit reported by a company, with device sales rising 29.5 percent in the final three months of 2014 to $74.6 billion,

By Catholic Online (NEWS CONSORTIUM)

How big is Apple? The creator of the iPhone and tablets is SO BIG that it is now currently twice as big as its second-closest rival, ExxonMobil. This is being reflected in the stock market, where shares in Apple jumped 2.7 percent at the start of the week to ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, First Peter 5:5-14
5 In the same way, younger people, be subject to the ... Read More

Psalm, Psalms 89:2-3, 6-7, 16-17
2 for you have said: love is built to last for ever, ... Read More

Gospel, Mark 16:15-20
15 And he said to them, 'Go out to the whole world; ... Read More

Saint of the Day

Saint of the Day for April 25th, 2015 Image

St. Mark
April 25: The second Gospel was written by St. Mark, who, in the New ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter