Cutting CEO Pay and Benefits
Hilzoy has a longish post arguing that, in return for the UAW agreeing to cut pay and benefits to levels commensurate with what their non-union counterparts working in American plants in the South make, auto CEOs should do the same. She notes that the ratio of CEO pay to worker pay has skyrocketed over the years.
My general argument to that line of reasoning is that assembly line workers are much more easily replaced than executives. In this particular case, though, it’s hard to argue that some random person off the street couldn’t run a company just as poorly.
Her coda, however, is still problematic:
Only one addition: this has to include not just salary but benefits, and benefits should be equal to (not greater than) those enjoyed by the average American worker. Until the average worker’s employer pays for his or her home security system or chauffeur, those multimillionaires on Wall Street can pay for those things out of their salaries.
Is it really hard to see why it makes sense for the company to pay to chauffeur its CEOs around and not its low-level employees? Ditto security?
The taxpayers have spent significant sums of money over the past year plus safeguarding Barack Obama’s well-being with highly trained professionals from the United States Secret Service. During this same period, so far as I’m aware, they’ve done zip to ensure that GS-5 clerks at Fort Belvoir don’t get shot. Does anyone have any problem with that?
Similarly, once he takes office, Obama will be provided with 1) a free house to live in, 2) a large staff of cooks, planners, and cleaning people, 3) a vacation home, and 4) a personal jet, helicopter, and motorcade. Does anyone not understand why he gets that and low level executive branch employees do not?
Photo: Peter Kaminski under Creative Commons.