Sunday, September 03, 2006

Labor Day, 4

An article in America magazine, titled Justice in Executive Compensation, addresses some important issues for American Catholics to think about this Labor Day weekend. It is written by Edward M. Welch, an attorney and a professor in the School of Labor and Industrial Relations at Michigan State University, East Lansing, Michigan.
The [former] Federal Reserve chairman, Alan Greenspan, has spoken about “infectious greed” in American corporate leadership. Business Week has pointed out that while rank-and-file wages increased over the last decade by just 36 percent, pay for chief executive officers climbed 340 percent. The magazine commented, “When C.E.O.’s can clear $1 billion during their tenures, executive pay is clearly too high.” A commission appointed by the business-oriented Conference Board has similarly noted the public’s anger over excessive executive compensation. It argued that limits must be instituted in order to restore the confidence that the American public has lost in corporations.
. . .
Estimates indicate the C.E.O.’s of large American corporations make 400 to 500 times the compensation of average workers. This is up from about 42 times the average compensation in 1980 and 15 to 20 times the average compensation in Japan and Germany today.

The author goes on to suggest solutions to this problem based on principles of Catholic social justice. A good read on a rainy day here in upstate New York.