Exploiting the Economic Crisis to Attack Unions
Jan 20, 2009
Canada’s top 100 CE0s ’earned’ $1 billion last year - enough to pay 20,000 workers a salary of $50,000 each. Sadly, hard facts like this are never allowed to get in the way of an attack on unions.
Last year the heads of the 100 largest companies in Canada ’earned’ an average of $10 million each. Collectively, they took home $1 billion dollars - enough to pay the wages of 20,000 workers earning $50,000 each.
That kind of absurd economic plutocracy has been developing for years, part of a growing culture of greed and entitlement that led directly to the economic collapse we’re now enduring.
One of our political leaders recently proclaimed that “we’re all in this mess together.” That might be true at some level, but we sure aren’t all in the same place in the mess. The CEOs who drove their companies into the ditch will walk away with their millions of dollars in severance and their multi-million dollar annual pensions. The workers who lose their jobs with those companies will, if they are lucky, qualify for Employment Insurance (EI).
The irresponsible greed straddled the border: financial investment companies in the U.S. paid their money managers some $38 billion dollars in bonuses in 2007, an increase of 6% over the year before, even though there were massive losses in the market value of their securities. These bonuses were paid to 186,000 money managers, an average of $201,500 per employee.
In 2008, the bonuses fell, by 40%. But the drop would have been much more severe, perhaps as much as 70%, had it not been for the U.S. government’s bailouts. The average managing director at an investment bank, a title typically earned after eight years on the job, will have received a bonus of $625,000 in 2008.
That’s down from last year, but it is still 15 times the income of the average American household. Top bankers could receive as much as $1 million – in bonuses. Even a bond trader just out of business school would have gotten as much as $170,000 bonus money in 2008. One apologist says, with unintended irony, that the firms “can’t afford to lose talent."
Congress failed
The U.S. government rescue only limits the salaries of five top executives of each of the participating financial firms, and even those limits are token - unenforceable. Congress did nothing to restrict Wall Street firms from using taxpayer funds to boost the compensation of other investment bankers.
Now compare all this to the response of the same government to the auto industry. The Bush administration made aid to the auto companies conditional on U.S. auto workers taking a wage and benefit reduction, down to the level of the non-union workforce of Honda, Toyota and Nissan. Some of this non-union work takes place in ‘right to work’ states where workers don’t even have the right to join effective unions.
So who do we conclude is more guilty of excessive compensation – the bond trader who makes hundreds of thousands in bonuses from the bailout, or the autoworker who makes way less than that for a year’s work?
In Canada, the CEOs of our banks are on the list of the absurdly highly paid, but the bank bailouts here made no mention of executive salaries. Yet here as well, the autoworkers, who earn less per year than our CEOs make per week, must pay a heavy price if that industry is to get a bailout.
Stephen Harper’s government has been less precise about how much workers have to give up but he has been no less clear that the price of aid is lower autoworkers’ salaries. One supposes that it was the unionized workers who decided to build gas guzzlers and the highly profitable SUVs, instead of more saleable cars, and who let the quality of the products lag behind those of imports. Why blame the mere executives, the CEOs and CFOs, when it’s so clear that unionized wages are the problem? Why indeed.
Of course it’s not just unionized autoworkers who are identified as public enemies whose wages have to be controlled - at least according to the right-wing opinion punditry.
Scapegoating workers
Public sector workers too, we are told almost daily, with their allegedly unreasonable demands and their ostensibly total job security, must be brought under control if we are to avoid armegeddon.
Amazing. Not one public sector worker made $10 million last year. Few made 1% of that. All through the 90s public sector workers were subject to layoffs and wage freezes and wage rollbacks and legislative imposition of contracts. But the amount of antiunion vitriol being directed to public sector workers because they dare to have unions would lead an observer to think that the biggest economic problem we have is union wages in the public sector.
The ill-fated Economic Update brought forward by the Tories included public sector wage controls and even wage rollbacks as a matter of course, and these moves were considered so obvious they didn’t even attract much debate. Now even the RCMP is having to face a unilateral reversal of an agreed upon wage increase because, to the right wing, wages of those at the working level are always the problem. It’s bailouts for banks but wage controls for public sector workers.
Meanwhile, Finance Minister Flaherty brags about massive Tory tax cuts, and the federal government’s independent budget officer says that looming federal deficits are the direct result of deliberate policy changes like tax cuts, not the economic slowdown. Again, it’s tax cuts for corporations and wage controls for unionized workers.
In fact, every economist who can add knows that the worst thing we could do right now is to cut workers’ wages anywhere. The economy needs to be strengthened from the bottom up. Pumping money into the banks will not re-inflate the economy, will not ensure that money is spent in our communities. Cutting the jobs and incomes of workers will prolong the slump, not resolve it.
Hard facts are ignored
But facts are never allowed to get in the way of an attack on unions. As usual, whatever the facts or circumstances, for the right wing, ‘they have seen the enemy, and it is always us.’
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