Editor, Manteca Bulletin,
Sam Pizzigati touched upon more than just the shameful practice of executives making millions on cancer patients in his column. He also made reference to a seldom discussed subject of the pay inequality and the widening chasm of the pay of top executives and the average worker.
Although Bernie Sanders correctly identified this unhealthy trend within corporate America, his solution, never fully explained in detail, was to raise taxes on the rich which has always been the typical offer of liberals and leftist leaning politicians to any of society’s ills. Clearly, most of us agree that a big-time corporate exec making 350 times what the average worker is taking home is obscene and grossly unfair. Whatever that exec’s contributions were — and many times there were none — they were the result of team work involving everybody from sales, marketing, R&D, manufacturing, accounting and so on. So, why shouldn’t they all share the gold on a somewhat more equitable scale than 350 to 1? Sanders’ idea of taxing the corporate exec more will not add a penny more to the take home pay of the Shipping & Receiving guys that were also an integral part of the team.
Sam Pizzigati suggests denying government subsidies to corporations that pay out excessive executive rewards. That might work but what if losing those government subsidies hampers the much needed R&D of that corporation? I’ve got a better idea. Just like we have a graduated income tax system, we could have something similar for corporations in accordance with the ratio of executive pay vs average worker’s take home pay of the corporation. If the stock holders decide to shower their top execs with excessive rewards, their corporation will just have to pay a higher corporate income tax. The government would still not dictate to corporations how much they should pay to their top execs but a graduated tax system, based upon top exec pay vs average worker pay, would serve as an incentive to reward all team members more equitably. There are plenty of examples where the government nudges our free market system just a few degrees in the right direction, such as setting minimum wage, parameters for pension systems, 401k, overtime pay, etc.
The shareholders of big-time corporations would pay closer attention to executive pay, something they fail to do today, and they certainly would have much greater incentive to reward all team players, thereby turning that pendulum back toward a more equitable pay system. A ratio of 350 to 1 of top exec to average worker pay just gives ammunition to the growing number of leftist elements in this country that are eager to dismantle our capitalist free market system. And then we would all suffer equally and equitably!
Peter M Vadasz