Labor’s message to corporate America: Time to pay up
BY EDWARD M. SMITH, OPINION CONTRIBUTOR, THE HILL
Here’s a tale of three Labor Days:
In 1928, on the eve the worst economic depression in our nation’s history, economic inequality was at dangerous levels. The top 1 percent gobbled up 24 percent of income. Just 10 percent of workers had unions.
By the mid-1970s, inequality was dramatically reduced, with more than half of the income of the super-rich shifting back to workers. The share of workers with unions reached 28 percent.
But this Labor Day, America is nearly back to 1928, with the top 1 percent claiming 22 percent of income — and the percentage of workers in unions falling to 1928 levels, at 10 percent.
The return to 1928 inequality levels did not happen by accident, and its correlation with the unionization rate is no coincidence. There has been a war on workers and their unions since the 1970s. Along the way, greed spun out of control and our country’s riches, which might have gone to workers, increasingly went to corporate America and Wall Street.
Between 1979 and 2019, the average income of the richest 0.01 percent of households grew more than nine times faster than the income of the bottom 20 percent of earners, while the richest 1 percent of households averaged more than 84 times in income as the bottom 20 percent.
But there is hope — just as millions of workers organized unions in the last century, workers today are celebrating a “hot labor summer” and are saying it’s time for corporate America to pay up.
That’s why more than 300,000 Teamsters workers for UPS stared down the company, winning a historic contract that will reportedly shift $30 billion away from stock owners and back to workers over the next five years in the form of pay raises and safer working conditions.
Before believing the resurrection of the myth that workers’ unions drive companies out of business, consider that UPS’s net income for the fiscal year ending June 2023 was $10 billion. And while UPS workers struggled to raise wages for part-time workers and obtain air-conditioned vehicles, UPS CEO Carol Tomé received $19 million in total annual compensation last year alone.
The Teamsters victory is a win tens of thousands of other workers are fighting to replicate.
More than 170,000 actors and writers are on strike, in part to defend against corporate abuses of artificial intelligence. Major entertainment companies say they can’t afford the workers’ demands, yet Disney’s profits in the second quarter of this year alone were $22 billion; in 2022, then-CEO Robert Chapek was paid $24 million in annual compensation. Last year, Netflix’s two CEOs were compensated nearly $75 million, while the company saw $1.5 billion in profits in the second quarter of this year alone.
The 150,000 workers who build cars for the Big Three automakers are threatening a strike after years of concessions. Over the last decade, the automakers amassed $250 billion in profits, while in the last year the combined compensation of their CEOs was $51 million.
There’s one reason these workers have a fighting chance to improve their own lives and to make America better by reducing inequality: They have a union.
Other corporations, virulently anti-union, are reaping even more extreme profits and executive pay packages. They aren’t fighting their own workers’ organizing efforts to save the companies — they’re fighting to save the inequality that lines their pockets and the pockets of those on Wall Street.
Sundar Pichai, the CEO of Alphabet, the parent company of Google, received $226 million in compensation in 2022. Google, which has been accused of several law violations as it battles efforts by employees to form a union, had $61 billion in profits for fiscal 2022. Apple, which is also accused of breaking the law to prevent employees from organizing a union, had $100 billion profits in 2022 and paid CEO Timothy Cook $99 million. Starbucks CEO Laxman Narasimhan is set to receive nearly $18 million in annual compensation, while the company had $3.8 billion profits in 2022 — and its employees face illegal firings and pay cuts in retaliation for unionizing.
In all, the average CEO-to-worker pay ratio was 272-to-1 in 2022, while U.S. workers’ real hourly wages fell in 2022 for the second year in a row by 1.6 percent. That compares to a 20-to-1 ratio in 1965, when unions were stronger.
Without working people, there would be no UPS, no Disney and no Big Three automakers. It is their labor that makes these companies work. It is a hopeful sign on this Labor Day that workers are seeking to claw back what is rightly theirs. It’s time to pay up. Wall Street and corporate America can more than afford it.
Edward M. Smith is a former union leader and is currently CEO of Ullico Inc., the nation’s only labor-owned insurance and investment company.