Walmart CEO Mike Duke makes approximately $11,000 an hour. Think about that -- $11,000 every hour. Think about an hour of your day, the tasks you accomplish, and the compensation you receive from your employer. If you are an average American worker, you could add up all your daily work hours and that of your close friends, family, and fellow coworkers and it still won't even come close to what Mike Duke makes in a single hour of his work day. He was the 46th highest paid CEO in America in 2012, according to Forbes.
American CEO's are the highest paid in the world. As of 2011, Corporate CEO's in America make 340 times what the average worker makes. As a comparison, in 1980, CEO pay was only 42 times more than the average worker. For decades now, the compensation packages of the top one percent have been steadily increasing -- income inequality is a runaway train, with the divide between the corporate oligarchy and the average citizen growing larger and larger every year. Even in the aftermath of the Wall Street induced economic crash, CEO pay continued to grow.
The wages of the middle- and lower-class have suffered and stagnated at the hands of corporate leadership, regardless of business performance or shareholder value. The top dogs are rewarded by rubber-stamping company boards. The phrase "income inequality" has become a gross understatement -- it might be more fitting to call it "income tyranny," as corporate America has created a new class of CEO monarchy, who believe they are entitled to everything and accountable to no one. Perhaps nothing illustrates this issue better than their suppressing their federal minimum wage -- stagnant at $7.25 an hour; and far behind the minimum wage in 1968, which inflation adjusted, would be $10.50 today. Moreover, worker productivity has doubled since 1968.
The defense from the corporate world is that such enormous pay packages are necessary to attract the top talent in the business world and to reward them for their efforts. The people of Switzerland don't buy it -- after billions in losses by banking giant UBS and the cutting of thousands of jobs by pharmaceutical company Novartis, nearly 68 percent of Swiss voters supported a referendum to give shareholders the final say on executive compensation. American CEO's should take note of this reaction by an outraged citizenry.
The first step in addressing the issue of income inequality in the United States is raising the federal minimum wage. President Obama recently called for raising the minimum wage to $9 an hour by 2015. (Candidate Obama in 2008 supported raising the minimum wage to $9.50 by 2011.) But $9 is far too little -- if adjusted for inflation based on the 1968 level, workers making the federal minimum wage would be making at least $10.50 an hour today.
According to a recent Gallup poll, over 70 percent of the American public support raising the minimum wage. Many economists agree that it would stimulate the economy through larger sales volume, not harm it. Large companies such as Walmart and McDonald's (who employ over two-thirds of low wage workers) have profited off the backs of the working poor for far too long. Last week, Costco CEO Craig Jelinek joined the fight by calling for raising the minimum wage to above $10 per hour. More corporate CEO's should follow his lead so they can catch up with 1968.
In a letter sent to Walmart CEO Mike Duke in January, I explained the plight of 30 million American workers currently scraping by on wages lower than the 1968 minimum wage, adjusted for inflation. "Walmart has about one million workers, give or take, in the U.S [making between $7.25 and $10.50 per hour]..." I wrote. "Raising your workers' wages to a $10.50 minimum would cost your company less than $2 billion (deductible) on U.S. sales of more than $313 billion. Fewer Walmart workers would have to go on varieties of government relief. Some of that $2 billion would go to Social Security and Medicare, with more going back into purchases at Walmart. Employee turnover would diminish. If Walmart joins with many civic, charitable groups and unions to press Congress for legislation to catch up with 1968 for 30 million American workers, good things will happen. You and your fellow executives will feel better. Your public relations will improve. So will our economy."
I asked Mr. Duke to call me if he had any interest in taking the lead on this crucial matter. I have yet to hear from him. Last weekend, my associates and I protested outside several Walmart stores in Connecticut. (Check out this video of the rally.)
It is time for a movement of the people to restore a level of minimal fairness to the compensation of working Americans and catch up with 1968.
Visit timeforaraise.org for information on our efforts to raise the minimum wage and how to get involved, and check out the AFL-CIO's Executive Paywatch site for data and information on the out-of-control CEO pay levels.