This Week

Labor Day honors work — and workers. We need Labor Day. We need, even more, to honor work 365 days a year.

Last week, three national watchdog groups and two federal agencies released data that document just how systematically our U.S. economy dishonors work. Those who toil deserve to see the fruits of their labor. In the United States today, this week's Too Much helps make plain, they don't.

Greed at a Glance: Finally, Transparent Concrete

Future historians, the UBS investment bank predicts, will look back at the early 21st century as “the golden age of profitability.” Corporate profits, says a new Commerce Department report, are now running at nearly unprecedented levels. What's fueling the profit boom? Sinking wages and salaries. Since 1970, the share of gross domestic product going to wages and salaries has shrunk 8.3 percent. If the 2006 American economic pie were divided into 1970-sized slices, with workers today receiving the same share of the nation's gross domestic product workers received in 1970, each American household would this year receive about $9,600 more in paycheck income . . .

The annual Census Bureau figures on incomes in the United States — released last week for 2005 — don't tell us much about America's upper-income set. One reason: Census statisticians don't tally income dollars over $999,999 a year. Census statisticians, on the other hand, can tell us a geat deal about how well everyone under $999,999 is doing. The short answer for 2005: not very well. The typical nonelderly U.S. household, notes a Center for Budget and Policy Priorities analysis of the new Census data, earned $2,000 less in 2005 than in 2001, a recession year. At the bottom of the income ladder, worse news. The average poor person fell $3,236 below the poverty line in 2005, the biggest such gap on record. Households in the most affluent 5 percent, by contrast, saw their 2005 incomes jump 3.1 percent, or $8,400 — and that figure, remember, ignores all income over $999,999 . . .

In Manhattan these days, as just about everywhere else in the United States, residential properties are going unsold as people wait for dipping prices to dip even deeper. And what do people who need a roof over their heads do while they're waiting? They rent. In Manhattan's most exclusive enclaves, the rush to rent is sending rental rates soaring. One eight-room penthouse “with Hudson River views” is listing for $45,000 a month, or $540,000 a year. The number of Manhattan apartments going for over $10,000 a month has surged, in just a year, by 54 percent. Landlords, meanwhile, are finding plenty of renters, even at five-digit rents. Wall Street's top five investment banks, Bloomberg news points out, paid out $20 billion in bonuses last year . . .

Architects solve problems. For the right price, any problem. The latest proof? The just-announced “transparent concrete garage,” a remarkable creation from the studio of Tapio Spellman and Christian Grou, the architects behind the Munich football stadium. Their new $211,000 garage addresses the incredibly vexing problem that faces every proud luxury car owner: How do you flaunt a fabulous car that has to sometimes sit in a garage? The Spellman and Grou answer to that riddle, designed specifically for the flashy Citroën C6, features “light-transmitting concrete with transparent sliding ‘doors’ to the sides.” Owners needing a bit of privacy can “flip a switch” to make “the polycarbonate-based LCD layers turn opaque electronically.”

Billionaires for Bush — the merry pranksters who hail each other as “brothers in bullion, sisters in stock options” — are taking to the airwaves. Their new show, Billionaire Radio, premiered Labor Day weekend on KPFK in Los Angeles, with a cast of characters that includes “Debbie Taunt,” “Ona Bentley,” and the ever-popular “Ivanna Haverdahl.” Billionaire Radio may soon be nationally syndicated. For now, if you're outside L.A., you can catch the show online at KPFK's streaming archive.

Still Failing: America's Biennial Economic Report Card

Some nations in the world today work fairly well for average families. Some don't. Unfortunately for average Americans, they happen to live in one of the latter.

That's the inescapable conclusion that burns between the lines — and the columns and rows of data tables and charts — that make up The State of Working America 2006/2007, the just-released tenth edition of the biennial factbook from the Washington, D.C.-based Economic Policy Institute.

Middle-income Americans, EPI's latest factbook details, are working harder — and more productively — than ever, but taking home less, after inflation, in their paychecks.

“Productivity growth has been seen as the tide that lifts all economic boats," says EPI President Larry Mishel, "but today we're seeing more and more Americans running harder and harder but not moving forward, while the big boats zoom further ahead.”

Since 2000, incomes for typical U.S. families have dropped 2.9 percent, this at the same time the economy has been registering a robust 16.6 percent gain in productivity.

But more than incomes are dropping for average Americans. Back in 1979, over half of American workers could count on an employer-provided pension. Between 2000 and 2004, only 45.5 percent of workers carried the security of a job-based pension.

Health security is bcoming scarcer, too. Four of every ten U.S. adults, the new State of Working America notes, currently go without needed health care because they can't afford it.

As a nation, the United States could easily "afford" to do better. Of all the developed nations of the world, only Norway now has a higher per capita income — that's total income divided by total population — than the United States.

But America's income sits starkly concentrated at the top. One result: The United States has become a nation that tolerates levels of poverty that would be considered a national disgrace in the rest of the developed world.

In the United States, 17 percent of families take home less than 50 percent of the nation's median income. The comparable figure in Norway: only 6.4 percent. In the United States, 21.9 percent of children live in poverty. In Norway, 3.4 percent.

Numbers like these tumble at you from every angle in the new State of Working America. Lurking behind all these sobering inequality numbers: the shrinking presence of unions in America's workplaces. In 1978, collectively bargained union contracts covered 26 percent of American workers. The 2005 figure: 14 percent.

The Year's Most Enlightening CEO Pay Report

Late each summer, after four months of executive pay reports from the Wall Street Journal, the New York Times, and over a dozen other national and regional media outlets, the Institute for Policy Studies and United for a Fair Economy release an annual analysis that places all these executive pay reports in a more accessible — and revealing — perspective.

Executive Excess 2006, the new analysis the two groups published last Wednesday, continues that tradition — with a host of eye-opening comparisons. Consider just two:

• In 2005, CEOs of Pentagon contractors averaged $7,737,400 in compensation, over 44 times the $174,452 pay of Army generals with 20 years experience — and over 190 times more than the $25,085 annual pay of an Army private in combat.

• In 2005, top oil company CEOs averaged $32,659,383 in take-home, 518 times the pay of average workers in the oil industry.

Overall, big-time CEOs in Corporate America pocketed  411 times the pay of average American workers in 2005. The new Executive Excess places this figure in perspective, too. In 1990, CEOs only made 107 times what average workers made. The 1980 difference: 42 times.

Should today's sky-high CEO pay numbers bother us? Executive Excess believes they should — and takes the time to spell out the reasons why. Lavish executive paychecks in the defense industry, the report notes as an example, tend over time to distort the democratic process. They give powerful, well-connected defense industry executives a intense personal incentive to press for military solutions to world problems.

These military “solutions” have certainly paid off since 9/11. In the four years right after the 9/11 attacks, top defense industry executives saw their pay double over their take-home in the four years before 9/11.

What can be done today to limit executive profiteering? Among other steps, notes Executive Excess 2006, the nation needs “a meaningful cap” on executive income.

Through new procurement rules for Pentagon contracting, the report points out, the federal government could “deny defense contracts to companies that pay their top executives more than 20 times what their lowest-paid worker at the company receives.”

Interested in learning more about Executive Excess 2006? You can read the full report online. Last week, two Executive Excess co-authors, Sarah Anderson and Chuck Collins, also had op-eds on the report published, as did Too Much editor Sam Pizzigati, who edited this year's Executive Excess edition.

Stat of the Week: Picking the Right Genes

The surest way to become rich in the United States today? "Be born that way," advises the just-released Economic Policy Institute data sourcebook, The State of Working America 2006/2007.

Between 1969 and 1979, nearly one in five Americans — 18.7 percent — moved from the middle 20 percent of income-earners to the most affluent 20 percent. Between 1989 and 1998, only one in about eight middle class Americans — 12.6 percent — reached the nation's most affluent fifth.

Between 1984 and 2004, incomes of typical American families increased at about half the rate that typical family incomes increased between 1954 and 1974, a drop from 119 to 63.1 percent.

Quote of the Week: Our Common Stake in CEO Pay

“We support reforms that give shareholders more access to corporate data, more say about executive pay decisions, more of a voting capacity to depose rubber-stamp corporate directors.

“But men and women throughout American society, not just corporate shareholders, have a stake in how corporations pay their top executives. Why should we let shareholders be the ultimate arbiter on the size of CEO rewards when these rewards can and do create incentives for CEO behaviors that hurt people who aren't shareholders?”

Institute for Policy Studies and United for a Fair Economy,
Executive Excess 2006, August 30, 2006

---

Want to receive the Too Much online newsletter in your email box every Monday? Learn more about Too Much and then sign up here for a free subscription!