As CEO Salaries Rage, at $5.15 Stays the Minimum Wage
So much for the American dream.
Last week, while the Economic Policy Institute released a report finding that American CEOs earn 262 times that of an average worker, at the same time Congress voted against raising the minimum wage. The message from our government to the vast majority of American workers was loud and clear: the rich should get richer and everybody else should struggle.
The Institute reported that while the typical worker earns $42,000 a year, the average CEO pulls in a staggering $11 million. For just one day of work, the average CEO earns what the average worker is paid for a full year. This staggering gap in earnings is not an age-old disparity; in 1965, CEOs earned 24 times as much as the average worker, one-tenth the disparity of today. Adding insult to injury is that there is not even a discernible "trickle-down" effect to those far below CEOs on the salary totem pole: the chief executives of 11 of the largest companies were paid $865 million over the last two years even as they presided over a total loss of $640 billion in shareholder value.
Congress appears unperturbed by such mind-boggling CEO profits, perhaps since big business and government are best friends, if not disturbingly intertwined. For instance, in 2000, Treasury Secretary Paul O'Neill earned $56,400,000 as CEO of Alcoa, which happened to be the single worst American polluter during Paul O'Neill's tenure. During Dick Cheney's much publicized tenure as CEO of Halliburton, the company generated $30,000,000 in revenue from business deals with Iraq under Saddam Hussein.
While this tiny portion of our society continues to sit atop greater and greater amounts of wealth, Congress (more specifically, Senate Republicans) blocked a bill that would have raised the minimum wage for millions of struggling American employees. Since 1997, the minimum wage has been stuck at a measly $5.15 an hour, even though prices --- for housing, food, education, gasoline, etc. --- have risen dramatically. Relative to the cost of living, the federal minimum wage is as low as it has been in over 50 years. Since 1968, the percentage change in the real value of the U.S. federal minimum wage is -37.
As a result, despite the misconception that only the unemployed live in poverty, of the 37 million destitute people in America, many have jobs. Communities throughout this country, from the urban north to the rural south, suffer not just from high unemployment rates, but from the tribulations of thousands of people who work full time but still live below the poverty level.
Earning the stagnant minimum wage that Congress hypocritically refuses to raise, the average full-time minimum wage worker garners only $10,712 a year, which is a mere $900 more than the federal poverty level for one person, and $2,500 less than the poverty level for a couple. It is no wonder that, in 2000 (and no doubt today), there was not a single county in the United States in which a full-time minimum-wage earner could afford a one-bedroom apartment.
We need not scratch our heads to figure out why so many of my clients in the South Bronx, both the unemployed as well as those with jobs, are having such a difficult time making ends meet. When a minimum wage job cannot even keep someone out of poverty (particularly if that person is trying to support a child, parent, or spouse), something is terribly wrong. Those of my clients who make the perilous and ultimately destructive choice to sell drugs overwhelmingly do so to pay rent, feed and clothe their children, and assist sick relatives. The majority of them would make safer, better choices if there were jobs available that paid them wages that lifted them out of poverty, wages that were both personally and practically rewarding (but then there would be fewer people on the street selling drugs, thus fewer people to arrest, prosecute, defend, and imprison, and we would then not need as many police officers, prosecutors, defense lawyers, judges, prisons, and correction officers --- oh, the horror!).
So while CEOs' bank accounts are tearing at the seams, if not outright bursting, tens of millions of Americans live in poverty and/or live paycheck to paycheck struggling to pay for medicine, education, and rent. Yet, in the face of stark evidence of the widening chasm between haves and have-nots, our government refuses to raise the minimum wage, while happily raising its own pay, securing tax breaks for the rich, and attempting to eliminate the estate tax.
If that is what has become of the American dream, I hope this country soon wakes up.