HomeEconomic IssuesReich: We Should Tax Huge Companies That Treat Their Employees Like Serfs (Video)

Reich: We Should Tax Huge Companies That Treat Their Employees Like Serfs (Video)

Corporate CEOs in America earn, on average, 30 times that of their typical employee. That doesn’t seem so bad, does it? Oh, wait. That was 30 years ago.  Today, executives in large companies pull in 354 times more than their lowly workers. As these corporate leaders continue to handsomely  reward themselves, over the past 30 years the average male American worker has seen no pay increase at all, although they continue to beat out females in the pay game. In the past 14 years, median salaries have actually dropped 10 percent when adjusted for inflation.

Richard Reich, Bill Clinton’s former Secretary of Labor, believes this widening gap between the salaries of princes and serfs is not only grossly unjust, but disastrous for the economy. Mininum wage employees can’t afford to buy stuff, which slows recovery. The fat cats advise their workers to make ends meet by applying for Medicaid and food stamps, which means, in effect, taxpayers are subsidizing the McDonald CEO’s $9,000/hour salary as he whines that minimum wage is too high.

Reich, whose documentary film Inequality for All, came out last year, will testify this week in favor a bill in California legislature, SB1372, which proposes to reset corporate taxes according to the CEO/typical worker ratio. The new law would also disallow loopholes such as subcontracting those low-paying jobs to another company in order to keep their numbers looking respectable. If they do that, companies will have to pay a higher tax.

Conservatives are crying that this bill is too complicated and a job killer, but the opposite is true. Reich maintains that CEOs don’t create jobs. By paying more money to the little guys, you increase their buying power, which improves the economy, expands businesses and creates more jobs.

The law isn’t perfect, but it’s a good start. If it is successful, maybe other states will take notice and do the same.

 For the last 30 years, almost all the incentives operating on companies have been to lower the pay of their workers while increasing the pay of their CEOs and other top executives. It’s about time some incentives were applied in the other direction. 

Watch Reich in the video below:

 

 

About Marie Maginity

Marie Maginity
Marie Maginity graduated from Temple University with a BA in Theatre. A former newspaper reporter/editor, she now works as a freelance writer, actor and Democratic committeeperson in Bucks County, PA
  • Mitch

    A good example for us locally is the newspaper. The current publisher has no journalism talents, he is a corporate hatchet man. His bonuses have grown and grown on the backs of all the employees he has laid off and the previous assets he has sold off. Today a once professional paper seems more like a happenstance parcel, amateurish in it’s scope and continuity.

  • Cath

    yes, this guy has the correct on what needs to be done. alot of the companies, that treat their workers like crap. i wouldn’t be surprised if alot of the conservative politicians want to turn times back to when the 99% were pretty much serfs with the exceptions of smaller time merchants, and clergy. times like that were demeaning beyond belief. i highly doubt any of my fellow working class people want to be called a serf or get on their knees for a CEO and call them “milord”

    • JFischer

      They don’t even want small time merchants. They would not mind if the US (and the world) became a giant ‘company town’ whose residents/employees shopped at the ‘company store.’

    • nolidad

      Cath you would have a stroke and die if you knew that most of the conservative politicians think that CEO salaries are way out of whack (and most of the conservative politicians and everyday folk do think that) Where conservatives differ from liberals is that they do not wish to see big govt. solutions to teh problem (which the fed has no constitutional authority to do anyway), Many remnember the disastrous experiment when Nixon tried to enact wage and price controls. By taxing Corporations whjere CEO’s make hefty salaries you will do one of two things for the most part– force these Corporations to lay workers off, or raise prices to match the increase in their costs (this case taxes). CEO’s do not set their salaries the Board of Directors do and while there is much croneyism there, giving govt. some authority over corp. and theiur policies is bad bad bad.

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