In a time of endemic economic insecurity, prompted by a deadly pandemic, the top 1% and 0.1% realized immeasurable gains. According to the Economic Policy Institute, CEO compensation rose from $20,351,000 in 2019 to $24,194,000 in 2020—over 351 times the pay of workers. Whereas worker pay has stagnated over decades, the rich are feasting on low-interest rates, borrowing huge sums of money against their wealth. Elon Musk, for example, has leveraged more than $150 billion of his stock as loan collateral. Current policies allow the rich to get richer while the poor get poorer.
It is not just CEO compensation that has increased, but also their deft tax evasion schemes. The “buy, borrow, die” strategy allows executives to secure loans without exercising stock options, therefore avoiding a capital-gains tax. Dollars that can be used for improving the nation’s infrastructure, education, and healthcare are instead being pocketed by egotistical billionaires launching toys into space.
With inflation at a 39-year high, working-class Americans are struggling to pay grocery, facility, and housing expenses. Despite this, the federal minimum wage rests at a measly $7.25. Workers living paycheck to paycheck cannot fathom the injustice of millionaires and billionaires profiting off of their unappreciated labor; look no further than the failed effort to unionize Amazon in Alabama. Essential workers are the backbone of the economy, yet basic needs such as healthcare and paid maternity leave are left unmet.
Even allowing the argument that top-earners are good for the job market and philanthropic endeavors, there is no sound justification for economic inequality, especially in a time of uncertainty.
To curb the unchecked rise of CEO compensation, inequality must be addressed through policy. The top rate marginal tax rate set by the IRS, adjusted for inflation in 2021, was 35 percent. Considering that the rate was 94 percent during World War II, there is no excuse not to make the top 1% pay their fair share and lower the tax burden on low and middle-income earners. Increasing corporate tax rates for firms that exhibit extreme worker-CEO compensation gaps can also apply pressure. And of course, anti-trust legislation and greater shareholder say in CEO pay are critical to maintaining checks and balances.
For a nation built upon the ideal of equality, the wide gap between the poor and the rich is profoundly undemocratic. Nonsensical talk about “trickle-down economics” is all but a distraction from the greater power oligarchs wield on our nation’s politics. Plutocrats concerned chiefly with their self-interest have the microphone on policy issues when it should be the workers who sustain their wealth. The exploitation of working-class Americans by corporate greed must come to a swift and decisive end.
Solid argument, Sami. I hope to hear much more from you in the near future.