Inequality, Again

The news that an additional 1,300,000 Americans fell below the poverty line last year got some media coverage, but little analysis. The fact that one out of every eight Americans now lives in poverty (defined as annual income for a family of four of $18,810 or less), and that the poverty rate among children (17.6%) is now the highest it has been in ten years, doesn't seem to be that important to the mainstream media; certainly not as important as Paris Hilton's latest lover, for example, or Michael Jackson's latest victim, or Scott Peterson's latest infidelity.

But these continually troubling numbers are of vital importance to the health and well-being of scores of millions of individuals. Even more important than the raw numbers however, are the trends that they illustrate. And the most important of these trends is indicated by the Census Bureau finding that, once again, the share of aggregate income for the lowest 20 percent of Americans fell. Yes, while the poor get poorer, those who are already rich continue to find ways to enrich themselves even further.

While wages for America's workers in private industry rose only 2.9 percent last year, to a full-time national average of $40,745, according to the Bureau of Economic Analysis, a study by Mercer Human Resource Consulting of 350 of the largest U.S. firms quoted in the "Washington Post" found that the median salary and bonus for chief executives rose 7.2 percent to $2.1 million. And that doesn't include stock payouts and other long term compensation, which brought the median overall compensation for CEOs to $6.2 million. Even that is not all:

“Along with salary, bonuses, stock, and options, executives were rewarded with a variety of perquisites. Some were also reimbursed for the taxes they owed on those perks. And some were paid to hire personal financial advisers to help them manage their millions, including their personal income taxes. “

Let's just look at that again -- while tens of millions of American families struggle to survive on incomes of less than $20,000 a year, their bosses are having their taxes paid on country club memberships and private jet flights.

Of course, these $6 million a year CEOs are two-a-penny these days. On Wall Street, the financial titans pay themselves an average of $20 million annually, with Citigroup paying Sanford Weill $30 million last year, Merril Lynch forking over $28 million to E. Stanley O'Neal, and A.G.Lafley cleaning up at Proctor & Gamble with $26.1 million. There are even reports that the more American jobs get shifted overseas, the more those particular CEOs get paid, with Forbes writing that "average CEO compensation at the 50 companies outsourcing the most service jobs rose by 46 percent in 2003 from a year earlier."

This extraordinary largesse even extended to that special breed of creature called "an outside director", part of modern capitalism's "self regulation". These rich folks, who in general have completely failed to stop managerial ravages of shareholder value at Enron, WorldCom, Hollinger and others, saw their compensation jump 19% last year to an average of $140,350 for a few luxurious days' work.

As the old song goes:

It's the same the whole world over,
It's the poor what gets the blame,
It's the rich what gets the pleasure,
Ain't it all a bloody shame?