I’ve enjoyed the long weekend this year. It’s been a much-needed respite from a hectic summer.
But as the holiday ends, my mind keeps returning to the history of Labor Day. It’s been around for over 100 years–and its original focus was to “exhibit to the public the strength and esprit de corps of the trade and labor organizations of the community, followed by a festival for the recreation and amusement of the workers and their families.” That focus has changed through the years…placing more emphasis on the “economic and civic significance of the holiday.”
It seems, though, that as the years have passed, we have given less and less respect to those who actually do the labor that allows us to eat, wear clothing, have comfortable homes. We have tended to say that those who are the “head honchos” are the ones we ought to look up to, ignoring the fact that many of them have risen to their positions because of the efforts of those who labor.
This year there have been calls and demonstrations in support of raising the minimum wage–which has been at $7.25 since 2009. That means that a full-time, year-round worker makes just over $15,000 a year…just barely above the poverty level for a single-person household ($11,490). And the value of that wage has been falling over the last forty years. In 1968 (when I was finishing college), the federal minimum wage was $1.60 an hour–but if it had kept up with inflation, workers making the minimum wage in 2013 would be earning approximately $10.70 an hour. That extra $3.50 makes a lot of difference!
Another issue that keeps coming to mind during this holiday is the CEO-to-worker pay ratio. I’m not at all opposed to CEOs receiving fair valuations–but somehow we’ve gotten things skewed. When so many workers make somewhere around $20 an hour and the CEO makes $15,000 an hour, something is terribly and obscenely wrong. In the United States, the CEOs of the S&P 500 Index companies made around 354 times the average wages of workers. How do we compare with other countries?
- United States – 354
- Canada – 206
- Germany – 147
- Spain – 127
- France – 104
- Australia – 93
- Sweden – 89
- United Kingdom – 84
- Norway – 58
- Poland – 28
So I guess the question in many ways comes down to this: If a company CEO-to-worker ratio is lower than the US average and if they pay their workers what many would consider a living wage, will they flourish or fail?
For me, the answer is found in a comparison between Costco and Walmart. Disclaimer – I have a membership at Costco, and our daughter works there. However, having said that, there does appear to be evidence that when workers are paid a living wage and are treated with respect, the company will flourish. According to an article posted in June, here’s some interesting information:
- Average cashier salary
- Walmart – $8.53
- Costco – $15.60
- Average pay for low-level managerial position
- Walmart – $44,774
- Costco – $53,956
- CEO compensation
- Walmart – $19.3 million ($1.3 million salary, $4.4 million bonus, $13.6 million in stock grants)
- Costco – $4.9 million ($650,000 salary, $200,000 bonus, about $4 million in stock options)
- Recent quarterly year over year earnings
- Walmart – up 1.1%
- Costco – up 19%
So…as this Labor Day holiday draws to a close, I want to say “thank you” to all who work to provide my needs and wants…and also to say that I think it’s time for us to make some changes.