We hear it all the time that the rich get richer and the poor just keep getting poorer, and I'll be the first to tell you that I agree to some extent that capitalist corporate America has gotten away from itself and has helped to bring some validity to this argument. America's CEOs are paid enormous amounts of money and still the American worker struggles to make ends meet. The companies' boards will always tell you that it is essential to maintain quality people with attractive compensation. When we are talking tens of millions of dollars in salaries and bonuses, this goes beyond compensation. This is corporate America sucking enormous sums of money from the shareholders, and robbing the pockets literally of the other employees of the company. Let's not forget that the CEOs are also employees. Performance doesn't appear to be a deciding factor anymore in how much someone will be paid.
There needs to be serious delving into the practices of compensating CEOs and other high-level corporate executives by the US Government, and there needs to be more of an outcry from America's shareholders. Frankly, America's workers should be rather vocal about this as well. Right now we don't have this public outcry and therefore nothing will change. I'll not go into the other contributing factors here such as the disaster of NAFTA, which has sold many hundreds of thousands of American jobs down the river, or the fact that we have been far too lenient regarding our trade practices with countries like China. That's for another topic.
Take into consideration a recent article that stated that the financial industry which has lost hundreds of billions of dollars in the crash of the subprime and housing markets last year paid out a record $80 billion in salaries and bonuses. CEOs who took on too much risk, turned a blind-eye to predatory lending practices, and failed to see problems developing were paid better than they ever have been in the past. How can this be justified as appropriate compensation? Meanwhile the top financial firms have been slashing jobs, arguing that cuts are necessary due to market conditions. Once again the upper echelon aren't willing to make sacrifices of their own, or take responsibility for bad decision making. Are these the same quality people we want to attract to the highest posts in corporate America?
Capitalism is not a bad thing when it works properly, and I'm a strong proponent of it. But when we leave a huge divide between how we compensate at the lowest and highest paid levels within the corporate structure, when we reward bad behavior with higher pay and bigger bonuses, do we not also lose the strength of the argument that capitalism is the best idea for the free world?
It is certainly something to think about.
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