Editore"s Note
Tilting at Windmills

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September 21, 2003
By: Kevin Drum

UNIONS AND CEOs....Jake Rosenfeld read this New York Times article on unions and wasn't impressed. Me neither:

Corporations have often complained that union demands are so outlandish that labor seems ready to drive them out of business. Companies like Bethlehem Steel, Pan Am and Studebaker attributed their demises largely to overambitious union demands.

But this week, amid a burst of major contract agreements, even corporate executives are acknowledging that labor's first concern has changed from demanding more and more to making sure that companies and jobs survive.

....[But] even when unions do moderate their demands, some industrial experts argue, unions are still not giving up enough to make their employers truly competitive in a global market.

Jake has his own take on this, pointing out that Wal-Mart, for example, which faces no international competition at all, stubbornly refuses to treat its workers as anything other than pack mules anyway.

But I have a different question. Apparently "some industrial experts" have suggested that "unions are still not giving up enough to make their employers truly competitive in a global market." So my question is: can the Times find "some executive compensation experts" to tell us that "top executives are still far too highly paid to make their companies truly competitive in a global market"?

Because while the real pay of unionized workers has indeed increased over the past 20 years, it hasn't increased much. Executive pay, on the other hand, has skyrocketed, increasing as much as 10x despite the fact that companies are not generally any better run today than they were in 1980, when CEOs earned about 40x the average wage compared to today's 500x.

So if staying competitive in a global market is so critical and who can argue with that? how about if CEOs start limiting their pay increases to the rate of inflation? How can we possibly expect American business to compete in a global market when our executive class continues to make outlandish demands that make them far more expensive to employ than their counterparts in Germany and Japan?

It's a mystery.

Kevin Drum 10:49 AM Permalink | Trackbacks

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