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I’d like to apply his concept to one real-life example. I’m quoting numbers and dates from memory here, but they’re certainly accurate enough to explain that concept, which is my objective:
I read a report about the highest paid CEOs in America. The CEO of Capital One made $205 million in 2005. One man, one year. I had a Capital One card back then and had to call Capital One’s customer service department three times while I owned it. All three people I talked to had strong accents, so I asked them where they were.
They said, “Well, I’m in my office.” I responded, “No, I mean which country?” Two said India and one said Mexico. I have no way of knowing, but I’m guessing those people make $1 an hour or maybe $5 a day, and that’s what allows the CEO to make his $205 million. (For the record, I have nothing against India or Mexico.)
Now imagine that the CEO was smitten by his conscience (hey, quit laughing) and allowed the board of directors to drop his pay to “only” $12 million a year, which is still “rich” by any standard. That one pay cut would free up $193 million of Capital One’s payroll money. I did the math. Divide $193 million by $50,000, and the answer is 3,860. That means that 3,860 Americans could be hired at $50,000 per year to do Capital One’s customer service. At $40,000 per year, they could hire 4,825 Americans, with zero increase to their overhead.
That’s almost 100 new $40,000 jobs per state. Then, Ford could sell more cars instead of closing their factories, Sears would sell more appliances, privately owned retail stores could stay open, etc., etc., and that would definitely help our economy get back on its feet. And that’s from only one CEO, one company. Multiply that by 10 or 20.
Please don’t send letters of rebuttal saying I’m advocating government authority to dictate American wages. I would never do that. What I am advocating is that our CEOs and their boards of directors take a close look at what their greed is doing to this country and its people.
And, by continuing to shrink American’s middle class, they are also shrinking the market for their own products right here in the United States, ultimately hurting themselves as well. By spreading the wealth, they help American employees financially, and that will help those employees support their families and buy the goods and services an economy like ours needs to sell to keep it going.
That’s not socialism or Marxism, that’s just a free-market economy operating at its ethical and unselfish best. It’s taking care of their employees, our economy and, over the long haul, themselves — all by simply “spreading the wealth.”
That’s always the fair thing to do, but there have been times in our history when it has been vitally important, and this is definitely one of them.
Terry Schmeckpeper is one of 13 Tribune community columnists, whose writing appears on the Sunday Opinion pages.
