November 26th, 2013
1:12 vote to cap “fat cat” CEO salaries in Switzerland
In Switzerland, the ratio of CEO pay to lowest paid workers in their companies has grown today to 43:1 from 6:1 in 1984. By comparison, in the U.S. in 2012, the ratio was 354:1, according to the AFL-CIO,. It is 84:1 in the U.K. The inequality sparked outrage and a movement in response that is sweeping Spain, France, Germany, and the EU which is considering limiting the ratio.
Why not in America?
Bruce Kogut, an over-credentialed biz school professor, told Peter Gumbel of Reuters that Europeans “care more” about inequality than we Americans do. He also said that “collective expiation of guilt and responsibility is lacking” in the U.S. after the Wall Street-manufactured collapse of worldwide economies in 2008. In other words, we are reluctant to blame Goldman Sachs and the others.
Two Swiss political parties — Social Democrats and the Greens — and the Young Socialists created an initiative dubbed the 1:12 for the Nov. 24 election that would amend their Constitution. The proposal was to cap CEO monthly salaries at no more than 12 months of the lowest paid worker’s salary. One month: 12 months. In 2008, the Swiss were outraged that the government bailed out the bank UBS while its CEO was lured from the U.S. with $20 million compensation package (that activists estimated would take a UBS worker 385 years to earn).
The government and all banks and corporations hated the 1:12 initiative. At the start of the campaign, public polls showed a nearly even split 40-40 between supporters and opponents. But as the election drew near, the “fat cat” side, spent heavily on their scare tactics counterattack.
Americans are familiar with the whining by the richest corporations — the new law would undermine national “competitiveness,” slash tax revenues, and convince employers to leave the country — somehow convincing the voting public that it is they who are victims when social justice is realized.
Another obfuscation was to claim that the ratio is too difficult to compute. In the U.S., the 2010 Dodd-Frank law ordered public American companies to report the ratio of CEO to median employee compensation. However, employers ignore the law. The HR Policy Association told Reuters that it is “not worth the cost” to comply.
The election was held Nov. 24. The 1:12 initiative was defeated 65.3% to 34.7%. Proponents promised future election initiatives. And Swiss unions plan future minimum wage campaigns.
The fight over limited exorbitant and unconscionable executive pay is not over in Europe. How about America? We ignore inequality at our own peril.
This entry was posted on Tuesday, November 26th, 2013 at 3:33 pm and is filed under Commentary by G. Namie, Fairness & Social Justice Denied, The New America. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.