While CEOs Continue to Grab Their Millions,
Why Can’t Workers Get a Share of the Profits?

Let’s ask a simple-minded question: Why should a corporate executive officer (CEO) take home a salary that is 436 times the pay of the average worker? What does he do for the company that is worth hundreds of times more than the workers who make the product, from which the company derives not only its profitability, but its very existence?

We thought that CEO pay would drop when their companies were in financial trouble and needed a federal government bailout. Last February, the Senate passed legislation that put a cap of $400,000 on salaries of top executives of companies that took bailout money. But the House failed to apply the salary cap, and the measure died.

Apparently, CEOs are worth more to our economy than the President of the United States. In 2008, the 20 CEOs, whose firms received bailout funds, obtained pay packages worth 34 times the President’s annual salary of $400,000, according to the Institute of Policy Studies.

The AFL-CIO dutifully runs “Executive Pay Watch” on its web site. We get enraged as we read about the greed and arrogance of the CEOs. But to what end? There is no evidence that we are determined to change the CEOs’ exorbitant pay packages, except to retain it as a moral issue.

Why Don’t Unions Fight for Profit-Sharing as a Moral Issue?

President Abraham Lincoln had it right. He said:

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital and deserves much the higher consideration.” — President Abraham Lincoln.

By producing the goods and services the American people need, the nation’s workers deserve a better deal than they are now getting for their labor. They should start changing the lopsided relationship in which the boss keeps all the profits, no matter how large, for himself, and pays his employees as little as possible.

Workers should demand a share of the profits as their right, based on their contribution to the company. The importance of workers is illuminated when they go on strike, and production ceases.

This kind of profit-sharing is not a novel idea. It is happening in countries abroad where workers are demanding—and often winning—an annual percentage of profits, including bonuses for a variety of workplace activities.

Unions should be entitled to a significant share in management policies, as in Germany. For example, decisions on layoffs should be decided jointly between management and worker representatives.

If unions do not assert their rightful claim to an equitable share in the profits and governance of the country’s major enterprises, they will inevitably decline in membership and strength. We’ve got to aim higher, and we deserve better—Harry Kelber

LaborTalk (4) will appear on Thursday, October 8, 2009.