Portland, Oregon – the first city to do something about CEO pay
I have watched this story since last October and was pleased to see that by December Portland, Oregon decided to even the playing field in terms of employee vs CEO pay.
Portland took a very bold step forward and while some worry that businesses will be less likely to relocate or stay in Portland, at some point perhaps other states will start to look at doing the same thing.
It seems that Portland is really tired like the rest of us, of seeing these insane CEO salaries when the average employee doesn’t even see a cost of living adjustment each year, much less a bonus.
On average a CEO’s pay happens to be right around roughly 248 times more than his or her employee.
CEO’s also tend to give themselves really, really big bonuses on top of those huge salaries most of the time.
This is a subject by the way that both Donald Trump and Hillary Clinton did agree on during the campaign.
During her campaign Hillary said;
“Middle class paychecks haven’t increased even though corporate profits and CEO pay keeps rising.”
Donald Trump expressed pretty much the same;
“And you see these guys making these enormous amounts of money. It’s a total and complete joke.”
So Portland City Council decided that they needed to do something in an effort to help the average worker.
Increase taxes on businesses with those monstrous gaps; 10 percent on companies whose CEO’s make 100 times the average worker, and 25 percent on CEO’s who make 250 times that.
The new law takes effect this month.
“It’s socially destabilizing, it’s economically destabilizing, it’s politically destabilizing. It is true that in the 50s and 60s, we had an economy that worked for everybody, and that made people feel better about society, it made people feel better about government, and we’ve lost that.” – Portland City Commissioner Steve Novick, an attorney and former U.S. Senate candidate
Steve is also the man behind the push to level that playing field just a little.
Early on in the draft of the ordinance it cited research from Thomas Piketty, who happens to be a really smart guy.
He has studied the issue of rising income inequality and it’s effects on society.
In his 2014 book, Capital in the Twenty-First Century, he argued that rising executive pay is a pretty big contributor to a now widening and destabilizing riff that exits between the rich and the rest of us.
Research also shows overwhelmingly that huge salaries to CEO’s does inhibit productivity and morale in companies that are paying record amounts to CEO’s and 74% of american’s believe CEO’s are overpaid according to a survey conducted last year.
Clearly the fight against income inequality is expanding beyond the calls for higher minimum wages and paid sick leave and now, some are paying special attention to executives’ ballooning incomes.
Sadly this is just one small step, nationwide we’ll still be seeing that huge pay gap for the time being.
Unfortunately in today’s world we face the me, me, me society and many businesses have gotten very used to large officer salaries while treating hard working employees as disposable things.
Cristal M Clark