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Valuing the Worker

Our levels of compensation are upside down in this skewed economy.

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If one wants to see how out of whack America's values are, propose that the chairman of General Motors be paid $72,000 per year. The response would be deafening outrage that this high-end job would be compensated at such a paltry level.

Suggest that a General Motors line worker be paid $35 per hour, and there would be equal outrage. Compensation at such a high level for such a low-end job would be considered ridiculous.

Of course, $35 per hour for a 40-hour week is just a fraction over $72,000 per year, but somehow this is not enough for a guy in a suit to attend meetings but entirely too much for a guy in coveralls who actually makes the product that is the sole real purpose for the meetings.

Prior to the GM bankruptcy, right-wing pundits asserted that the average autoworker had been unjustly enjoying an hourly wage in excess of $70. But they failed to note that this amount covered benefit-related costs for every single employee, active and retired, including statutory expenses.

The actual hourly compensation for the highest-paid union autoworker was about $35.

They also claimed that this misleading $70 per hour wage added $1,500 to the price of a car. Of course, that additional $1,500 was equally misleading because it was spread across all car models, including the Cadillac Escalade.

But that's the point: to convince the middle- and lower-income classes that what benefits the rich is not only fair but will accrue to the economy and provide cover for the continuing assault on everyone who isn't rich.

Nearly all Republicans — as well as the many Democrats who glean campaign contributions by protecting their wealthy benefactors — would have us believe that the decline of American manufacturing was spawned by the greed of unions and their chiseling, layabout workers, which forced corporations to offshore our jobs. To be fair, there were some union excesses that should have been checked. But excesses at the top endure no scrutiny whatsoever, while paying an American worker even an increased minimum wage provokes a firestorm. 

If an executive were to be paid the very low (by CEO standards) salary of $1 million a year, the wage would work out to $480.77 per hour. But let a working-class stiff ask for a bone with a morsel of meat on it and that's profligacy.

The moneyed class might be shocked to hear this, but most of us don't really care that this disproportionate level of compensation exists or that there is such a thing as a moneyed class at all. We do care about and wonder where the jobs are that we were promised would "trickle down" to us from all that money the rich didn't pay taxes on.  

In 1980, an average CEO made about 42 times what the average worker did. By the end of 2007, that figure had become 345 times. Today, with our economy in shambles, the multiplier for a CEO's compensation has risen to more than 500 times the pay of his average worker.

The bigger problem, however, is not that our executives get so much. It is that our workers get so little. When reflecting on the jobs that have moved offshore, is it truly onerous to pay a few bucks more for a toaster made in this country if it guarantees a job for a fellow citizen — a wage on which he would pay taxes? 

Henry Ford increased the pay of his employees so that they could afford to buy the cars they made. If we are to maintain the domestic tranquility that a stable, broadly enjoyed prosperity has afforded us for more than a half-century, at some point, we're going to have to choose between full employment and uber-cheap goods. We cannot have both.

And we must decide that we are either the United States of America or a random aggregate of 310 million disunited islands looking out only for ourselves. That's the real choice to make as we step into the voting booth — now and in the future.

Occasional Flyer online columnist Ruth Ogles Johnson works in sales and management. She is a former Republican candidate for the state legislature.

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