GM announced on Wednesday that it will offer buyouts and early-retirement packages ranging from $35,000 to $140,000 to every one of its 113,000 unionized workers in the United States who agree to leave the company.
Yet these workers will have no health insurance if they accept this offer. Many are too old to be retrained easily into new jobs, and there's little chance that they can find any jobs at all in the economically downtrodden ares where the factories are, thereby forcing these workers to move to new cities. And even if they can find jobs, there's little to no chance that they will be paid as well as they were and receive both healthcare and pensions. In all of this, there is no discussion about the CEO's or the top managers of these companies taking pay cuts, nor is there a discussion on the part of shareholders to settle for less profit and less return on their investments in the near-term in exchange for helping these workers and these families.
So what is our commitment to? Ever-more profits? Ever-more dollars? Or to children and families? Surely wisdom and common sense would tell us, "It doesn't have to be one or the other. We can have greater and greater profits AND protect and serve families." But it's becoming increasingly clear that greater and greater profits come at the expense of families.
How much profit is enough? And what is the cost of doing business as usual?
9 comments:
Your argument does not make sense. You say that greater and greater profits come at the expense of families when it is actually reduced profits cause distress for families.
Your comment 'how much profit is enough" scares me. I can only pray that people with your economic literacy never get in a position to determine this by fiat.
BTW, Lenin and Stalin already tried it. It doesn't work.
Miller
Reduced profits cause distress for companies and shareholders. They pass their distress on to families. This is done in the name of "restoring profitability." But how many of these families will profit from such a move?
At GM, members of the board of directors receive $200,000 a year paid in cash and stock for their work, plus up to $30,000 for chairing a board committee or being a member of the audit committee.
Chief Executive Rick Wagoner earned a salary of $2.2 million, a bonus and other compensation of about $2.6 million, and stock options for 400,000 shares in 2004, the most recent year for which figures are available. Vice Chairman Bob Lutz and former Chief Financial Officer John Devine each earned a salary of $1.55 million, plus a bonus and stock options.
Salaries vary widely for white-collar workers. But highly skilled employees such as those in the engineering and design areas can earn $100,000 or more annually.
Blue-collar workers earn about $27 an hour, or $56,160 a year at 40 hours a week and no overtime.
source: http://www.freep.com/apps/pbcs.dll/article?AID=2005601110463
Rabbi Michael Lerner, editor of Tikkun magazine, writes about "the new bottom line":
"Today, institutions and social practices are judged efficient, rational and productive to the extent that they maximize money and power. That's the Old Bottom Line. Now Here is the NEW BOTTOM LINE for which we advocate: We believe that they should be judged rational, efficient and productive not only to the extent that they maximize money and power, but also to the extent that they maximize love and caring, ethical and ecological sensitivity and behavior, kindness and generosity, non-violence and peace, and to the extent that they enhance our capacities to respond to other human beings in a way that honors them as embodiments of the sacred, and enhances our capacities to respond to the earth and the universe with awe, wonder and radical amazement."
source - http://www.spiritualprogressives.org/nsp-tenets
What we are discovering is that institutions and organizations that gain at the expense of others, i.e., that profit from suffering, are not sustainable. This is not about Lenin or Stalin or revolution. It's about survival. How do we increase the likelihood that our species and our core values will survive?
That's an interesting, though frightening comment by voter. I'm always impressed by how someone can miss the simple mathematical logic of what happens to the rest of the population when a few are 'making' 10 or 11 million a year. In a finite pool of money, that means that some will make significantly less. But I'm friendly with several families that are in that category, they are truly clueless to what life is like for most of the people. Nice folk, but unaware of what it's like to need dental work done and not get it, because there's simply no money to do it.
Using the old boogey man of communism is a typical response of the clueless, too. Communism was a desperate, and yes, foolish, response of people so poor that they figured anything was better than what they had. What I find truly frightening is the increased number of people in that circumstance today. Does anyone remember the LA riots? There were some desperate people, nothing to lose, valued their own so little that they set fire to it.
Even if the liberal bleeding heart scenario is not your thing, the simple logic of what happens in human society when too many are too poor and hopeless should drive us to find a solution. Even if you don't give a tinker's d*** for the rest of humanity, you should understand that gated communities won't really keep them out if they are angry or hungry enough.
The reason things have been so wonderful in this country is for a long time there has been a middle class. A large body of the population has been reasonably well off. They've had access to medical heating and cooling and the occasional vacation.
We've now got a growing population of wealthy elite and it's not spouting communist ideals to recognize that. It's simply statistics. Simple math further reveals what that's doing to those who are not part of the population whose wealth is growing exponentially. Unlike you, Peter, I do fear revolution will be what people choose as a desperate solution. It won't solve the problem, but desperate people sometimes seek desperate measures.
To me, the logical alternative is the slow, but legal change of our society through the rule of law, recognizing that allowing people to have such disproportionate wealth and control is not democracy, but aristocracy. Yes, I'm saying tax the wealthy.
Gotcha Riley!!! Your entire argument is based on your belief there is a "finite" amount of money. Econ 101 would have taught you this is simply not the case. New money is created every day through manufacturing/creativity, innovation, and velocity. Once you base your argument on this false premise, everything else you say means nothing.
Furthermore, even if you paid the CEOs nothing and distributed that money to all the employees in GM, the average worker may be lucky to get 20-30 bucks. I guess that is your idea of leveling the playing field.
I believe it was Thomas Jefferson who said that if you gathered up all the money and distributed it evenly, within a generation it would be back in the hands of the people who had it in the first place. With the velocity of money today, it would likely occur now within 5 years or less.
BTW, I make about 25K/yr. The difference between you and I is that I was not raised to be jealous of those with more. I was not taught,like you obviously were, that in order for me to be raised up, someone else had to be taken down.
miller
Furthermore, let's relate what you believe to education. More money you say? See this:
D.C.'s Distinction: $16,344 Per Student, But Only 12% Read Proficiently
Posted Mar 23, 2006 in - "Human Events-Online
The District of Columbia spends far more money per student in its public elementary and secondary schools each year than the tuition costs at many private elementary schools, or even college-preparatory secondary schools. Yet, District 8th-graders ranked dead last in 2005 in national reading and math tests.
D.C.'s public elementary and secondary schools spent a total of $16,334 per student in the 2002-2003 school year, according to a Department of Education study. That compares to the $10,520 tuition at St. John's College High School, a District Catholic school that sends almost all its graduates to four-year colleges."
I'm interested to see how you blame this on corporate greed! Let's hear it.
Miller
Further to your comments that big-wigs make too much and because they make too much the little guy does not get his fair share, try this on for size:
GM employs 300,000 people. Let's say our hypothetical fatcat makes 20 mil (I exagerate the dollar amount to further make my point). 20 mil divided by 300,000 poverty stricken workers (making 60k BTW) would give each one of them a big fat $67 bonus!!!
As I said before, ripping someone else down will never lift you up.
miller
Hi, Miller. I can see that this topic means a lot to you!
Let me try and address your last couple posts in order.
RE: D.C.'s Distinction: $16,344 Per Student, But Only 12% Read Proficiently - on the surface, this seems pretty obvious: D.C. schools spend a lot but get very little return on their investment. Conclusion? Giving D.C. schools more money won't solve the problem.
But let's dig a little deeper. You mention the $10,520 tuition at St. John's College High School, a District Catholic school that sends almost all its graduates to four-year colleges. Look at the annual income of the parents who send their kids to D. C. public schools and compare that to the parents who send their kids to St. John's College High School. What you'll more than likely see is that parents who send their kids to D.C. public schools make exponentially less money per year than do parents who send their kids to St. John's.
What difference does this make? Well, dig a bit deeper and you'll see what I mean. In the case of St. John's parents, there is a strong likelihood that both parents graduated from college. In the case of D.C. public schools, the majority of parents are single mothers who did not go to college. Therefore, there is an automatic assumption in the homes of the St. John's students that (a) they are able to go to college and (b) they are expected to go to colllege. Not so in the homes of the D.C. public students. If anything, parents have to work at least twice as hard to not only afford college, but to instill intheir children that college is both attainable and possible. This is NOT to say that D.C. students can't go to college. Of course they can, and many do. But it is much, much more difficult to do so.
Furhter, because they make more money, the St. John's parents are able to afford after-school tutoring like piano lessons or dance classes or extra help in math. Not so the D.C. public parents. In addition, the St. John's parents can afford to send their kids to summer camp. Not so the D.C. parents. What difference does this make? A significant body of research indicates that whatever achievement gains are made by poor minority kids over the course of the academic year, these gains are lost over the summer. The end result is that poor minority students take one step forward, then two steps back.
The idea behind your argument is that spending more money won't help the problem. Maybe not. The other point is that it seems that D.C. public spends more per pupil. But if you factor in all the after-school tutoring that the St. John's kids get, the summer camps, and the priceless influence of being raised by two college graduates who EXPECT you to go to college, you'll see that the money pales in comparison.
If we were to allocate funds to provide free, high-quality, after-school tutoring to D.C. students and provide funds to allow them to attend fun, enriching summer camps, we'd see measurable improvement in learning outcomes.
But, because you and many others insist that more money won't solve the problem, the likelihood of this happening is slim to none.
Finally, your argument assumes that D.C. public schools instruction is as good as the instruction at St. John's. This may or amy not be the case with some schools in D.C. But because teachers in D.C. public schools and most other urban school districts have had their professional judgement as educators taken away from them and replaced by canned curricula such as Success for Alll and Open Court, the likelihood is that instruction is much worse in D.C. public schools as a whole than it is at St. John's. So if instruction really is much better at St. John's, can't we assume that students will do better?
In most private and parochial schools, class sizes are much, much smaller than public schools. So given the advantages these students already enter school with, coupled with better instruction and smaller class sizes, you want to tell me that the extra $5,824 that D.C. public school students receive is going to compensate?
Also, don't forget that private and parochial schools like St. John's can achieve the kind of results they get because they get to control who enters and who does not. Publlic schools have to take them all: the trouble-makers, the drug addicts, the gang members, the jocks, the brains, etc., etc. This is what makes them PUBLIC schools.
RE: "big-wigs make too much" . . .
The solution is not to take the 20 million made by the fact-cat CEO and divide it by 300,000 workers.
The solution is to focus on why CEO's need to make so much. How much is enough? And why is wealth and power concentrated into less than 1% of the population? How much do these folks need? How many jets? How many trust funds?
It is often said that to whom much is given, much is owed. Rather than looking at taxation as a burden, the top 1% of the population might look at taxation as their way to help other people, to help GM workers transition from their jobs, to end hunger, to alleviate suffering.
But this shift would require a massive restructuring of priorities. Or would it?
But it would never happen. Or wouldn't it?
Naively or blindly or optimistically, I believe it not only can happen, but it will happen. I believe a fair, just world is possible. I believe the human commmuntiy is possible. I believe we can lift each other up.
NY Times, 4/11/06, reports some top CEO pay for 2005:
Ray Irani, Occidental Petroleum - $63 million
Bruce Karatz, KB Home - $43 million
William Greehey, Valero Energy - $40 million
John Mack, Morgan Stanley - $39 million
Henry Paulson, Goldman Sachs - $38.9 million
Richard Fuld, Lehman Brothers - $37.6 million
My personal favorite:
Harold McGraw III, McGraw-Hill - $16 million
I'm still not sure what one does with $63 million per year and how that might differ from making $64 million or $62 million. For example, if Mr. Irani had been paid $64 million instead of a mere $63 million, would he have spent the additional $1 million on a couple of jets, a Ferrari, and a medium-sized island in the South Pacific?
How much is enough? And if we genuinely believe that these CEO's (almost all of them white men, by the way) deserve this much, then what does that say about our values? What do poor children in the inner-city deserve?
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