FROLITICKS

Satirical commentary on Canadian and American current political issues

May 30

History of Racism Unfolded Once Again This Week in the U.S. and Canada

by bcurry

Two events occurred this past week in both countries that underlined the nature of historical racism.  The first is the one-hundredth anniversary of the Tulsa race massacre which took place May 31 and June 1,1921 in Tulsa, Oklahoma.  In its 1996 examination of events, the Oklahoma Commission to Study the Tulsa Race Riot of 1921 was able to confirm 39 dead, 26 Black and 13 White, based on contemporary autopsy reports, death certificates and other records.  However, the commission gave several estimates ranging from 75 to 300 dead, some of whom we now know were buried in unmarked mass graves.  Following the bombings and fires, about 10,000 Black people were left homeless in Tulsa.  Property damage amounted to more than $1.5 million in real estate and $750,000 in personal property (equivalent to $32.65 million in 2020).

The second event is the very recent discovery in Kamloops, British Columbia, of a mass grave containing the remains of 215 children once housed in a former Indian Residential School that closed in 1978.  Canada’s residential schools were compulsory boarding schools run by the government and religious authorities during the 19th and 20th Centuries with the aim of forcibly assimilating indigenous youth.  From about 1863 to 1998, more than 150,000 indigenous children were taken from their families and placed in these schools.  The children were often not allowed to speak their language or to practise their culture, and many were mistreated and abused.  Large numbers of indigenous children were never returned to their home communities.  The school in Kamloops was the largest in the residential system.  Opened under Roman Catholic administration in 1890, the school had as many as 500 students when enrolment peaked in the 1950s.  The children’s remains — some as young as three years old —were found with the help of a ground-penetrating radar during a survey of the school.

What is even sadder about these two events is that they were never part of a history or civics curriculum in the U.S. or Canada until very recently.  The Tulsa race massacre was largely omitted from local, state, and national histories until 2020 when the massacre formally became a part of the Oklahoma school curriculum.  Until a commission launched by the Canadian government in 2008 to document the impacts of the system of Indian Residential Schools, few Canadians would have ever even heard of this part of Canada’s indigenous history.  When I was in high school in the mid-1960s, there was absolutely nothing in our Canadian history books about this “shameful” colonial policy.  It was only in 2008 that the then-prime minister Stephen Harper, on behalf of the Canadian government, formally apologised for the system.  The Canadian government subsequently signed an agreement with the Assembly of First Nations pledging to pay a lump sum in compensation to former students of Indian residential schools, expected to include tens of thousands of affected persons and families.

Systemic racism of course continues to exist today in both countries.  Denying its existence is denying the historical evolution of racially-motivated policies and activities perpetrated by governments and institutions in both countries.  As a society attempting hopefully to improve race relations, we need to be aware of our histories and to discuss their relevance and importance in order to really understand and appreciate our current situation.  Hopefully, as in the case of the above two cases, this much needed discussion should begin among our youth and teachers in our schools.

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May 28

What’s a Billion Dollars? President Biden’s Proposed $6 Trillion Budget for 2022 Fiscal Year

by bcurry

During the Second World War, Canada’s newly appointed Minister of Munitions and Supply, the Honourable C.D. Howe, had allegedly said “What’s a million?” in response to his war spending estimates in 1945 (which totalled $1.365 billion).  This was in response to opposition queries about cutting a million dollars from that budget.  Howe responded that a million dollars from the War Appropriations Bill would not be a very important matter, which of course in those days represented a lot of money.  Howe eventually went on in 1944 to become Minister of Reconstruction in the post-war government’s successful overhaul of the Canadian economy. 

Now one has President Biden’s apparent proposal for a $6 trillion budget for the 2022 fiscal year.  Wow, this is a lot of money!  The budget proposal would call for the most sustained spending in more than a half-century, which forecasts deficits at more than $1 trillion for at least the next decade.  As in the case of WWII funding, the President sees the proposed expenditures as necessary to turn the economy around after the pandemic is over.  Most of the planned new funding would go to building up America’s infrastructure: everything from roads, bridges, public transit systems, passenger and freight rail, airports, water infrastructure, broadband infrastructure, etc., etc.  Already, in addition to the American Jobs Plan, the President has put forward a $1.8 trillion American Families Plan, a massive package that would invest in education, childcare and paid family leave.  To pay for all this, the President plans to increase taxes on the wealthy and to raise the current corporate tax rate.

Of course, the Republicans have raised their objections, especially to any increases in personal or corporate tax rates.  A group of Senate Republicans apparently have announced a $928 billion counteroffer on infrastructure.  After all, what’s a few billion dollars less?  Needless-to-say, many Democrats dismissed the Republican counteroffers as being too small.  Sounds familiar.  Another group of Republicans reportedly has suggested using unspent funds from previous coronavirus relief plans to pay for the infrastructure bill.

As in the case of the American and Canadian extensive efforts and massive spending for their economies to fund the war and recover from WWII, it would make sense that similar efforts are required of governments to do the same in order to recover from the damages incurred as a result of the global pandemic.  One way is for a massive investment in the much needed upgrading of our infrastructures, many of which have suffered from past neglect.  Yes, a billion or more dollars is a lot of money, but not when you’re talking about trillions.

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May 22

The Palestinian-Israeli Conflict Once Again Raises the Issue of Bias in Journalism

by bcurry

Back in February 22, 2019, an opinion article in the Washington Post by Jeremy Littau talked about the five myths of journalism.  One of the myths alluded to is the belief that good journalism must be objective.  However, Littau points out that the press in the past was more often than not openly biased.  Indeed, he points out that The American Press Institute says the public has developed a flawed conception of news objectivity by confusing it with lack of bias.  On the other hand, I have read that some believe that younger journalists tend to be more activist, thereby leading to more overt bias in their coverage of news events.  The very terms that they use to describe or portray these events often illustrate such biases.  Some have even demonstrated evident biases through their personal social media outlets.  This can lead to their dismissal by news outlets as it has on occasion in the U.S.

Nowhere was the nature of journalistic integrity challenged more then during the reporting in both the U.S. and Canada on the recent Palestinian-Israeli conflict.  In some cases, choice phrases were borrowed from implicated groups to describe Israel’s attacks on Gaza, such as “indiscriminate airstrikes”.  The phrases “ethnic cleansing” and “forced expulsions” emerged to describe what is happening in the occupied Palestinian territories, phrases often employed by some human rights groups.  Of course, it didn’t take long to discover that input about the conflict on social media was by far more favourable to the Palestinian cause than to Israeli justification for its military actions.  Heartbreaking videos being released and viewed by millions provided clear evidence of the resulting destruction within Gaza.  Not only did these appear on social media, but many were selectively used by news outlets to describe the scene, especially those depicting injured women and children.  The emotive term “humanitarian disaster”, whether justified or not, was repeatedly used to describe the tragic situation on the ground.  Moreover, one would have to do a more in-depth study to assess whether and how many biases did occur among reputable news outlets.  How were journalists influenced in their accounts and by whom?

As Andrew MacDougall, a communications consultant, pointed out: “It’s one thing for an opinion journalist to make such an incendiary claim; it’s another for a straight-news reporter to do the same.”  Despite what journalism schools may proclaim on the need for objectivity, MacDougall sees younger journalists increasingly identifying themselves as activists as much as they do practitioners of the news craft.  Furthermore, this cohort views journalism as a means to an end, a tool to produce the changes it wishes to seek in society.  There is little doubt that journalists can be influenced by accounts of events on social media, but by how much is another story?  It cannot be easy to maintain objectivity in an era of the me-too generation, Black Lives Matter, indigenous issues, systemic racism against minorities, etc., etc.  Activism is most often encouraged on campuses and its influences upon journalism faculties are just as certain to be found on most campuses.

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May 15

To Mask or Not to Mask? That is the Question.

by bcurry

This past week, Director Rochelle Walensky of the Centers for Disease Control and Prevention (CSC) announced the CDC ‘s recommendation that anyone who is fully vaccinated can participate in indoor or outdoor activities, large or small, without wearing a mask or physical distancing.  Subsequently, President Biden reiterated the CDC’s recommendation in a press conference, suggesting that if Americans wanted to get rid of their masks, they should get vaccinated.  However, as in everything about COVID-19, there is again confusion as to what this actually means.  As it pertains to states and municipalities, there are those that had already lifted masking restrictions and those that indicated they will continue the restrictions for the time being.  Labour groups and others warned that employees at stores, restaurants, bars and other businesses could be left exposed to the coronavirus from customers and could be forced into the unwanted role of “vaccination police.”  Who will have to police the need for a mask and how will one prove that one has received sufficient doses of a vaccine to be fully immunized?

In Canada, there continues to be a reluctance to remove masking requirements, particularly indoors, because of the existence of remaining hot spots and high case rates in some regions.  This is despite the fact that almost half the population has received their first vaccine shot.  Except for a very few anti-mask groups, Canadians appear to be more willing to maintain the course.  As with the general approach to the pandemic, Canadians have been supportive of lockdowns and other preventive measures.  Unlike Americans, Canadians did not portray masking as a political issue, a perception propagated by several prominent American leaders including former President Donald Trump.  One has to ask how individual liberties take precedent over the health and safety of the community at large and the impact on front-line workers?  With close to 600,000 COVID-related deaths in the U.S. to date, Americans and their leaders appear to have already answered this question.  Indeed, several mask supporters were voted out of office in a number of jurisdictions and threats were made against politicians and officials in other places over restrictions.

The experts have made it clear all along, whether vaccinated fully or not, wearing masks helps to control the spread of the virus within the community.  The CDC’s declaration is seen by many as being to soon and too fast given that the number of cases in certain states and localities remains high.  It appears that the agency’s approach has quickly gone from one extreme to another. Add to this the fact that the agency still recommends fully vaccinated people wear masks on planes, buses, trains and other forms of public transportation, as well as in health care settings, correctional facilities, homeless shelters, and where required by state and local governments, or businesses.  No wonder Americans are confused once again!

As far as I’m concerned, even with having been vaccinated, I will continue to wear a mask as long as it is deemed appropriate, especially in indoor public spaces.  I believe that most Canadians feel the same way.  It’s the least selfish thing that one can do under the circumstances. 

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May 9

Reopening of Businesses Brings With It a Shortage of Workers

by bcurry

As immunization of populations against COVID-19 accelerates in the U.S., Canada and the European Union, the lessening of restrictions will allow more and more businesses to reopen, particularly in the leisure and hospitality sectors.  However, in the U.S. and Canada, federal governments had introduced additional unemployment benefits and stimulus checks to provide financial assistance to people who lost their jobs during the pandemic.  Many of the pandemic-related programs are expected to continue to the end of this summer.  However, as more businesses reopen, there will be a demand for workers to return.  The apparent data currently indicates that many workers are reluctant to return to former employment at this time for a number of very valid reasons.  Employers say it is increasingly difficult to attract job seekers to an industry whose future is more or less tied to whims of the coronavirus and the uncertainty of vaccination campaigns. 

The fact of the matter is that there continue to be pockets of COVID outbreaks in both the U.S. and Canada, regardless of increased immunization within the population.  The chances of front-line workers being exposed to the coronavirus remain high with the arrival of more contagious variants.  A good deal of uncertainty still exists.  With the unemployment benefits in place, one cannot blame many workers for being cautious about returning to employment, especially that which involves low-paying jobs.  In addition, women in particular are affected by the lack of affordable and safe daycare for their children.  Remember that in many jurisdictions, schools remain closed and on-line learning, where available, continues to offer a safer option.

Several American states, more so than Canadian provinces, have moved quickly to open up their economies.  However, despite everything, the pandemic is definitely not over.  Indeed, the so-called ‘third wave’ has been worst in terms of hospitalizations, especially among younger Americans and Canadians.  Case loads are still far too high, threatening to overload health care systems.  For this reason, some governments are reluctant to move too quickly in reopening businesses deemed non-essential.  Here in Canada, until a certain proportion of the population is fully immunized, governments actually prefer that many non-essential workers remain at home.  However, in the U.S., some Republican governors have started slashing jobless benefits in their states, hoping that the loss of generous federal aid might force more people to try to return to work.  Other states now require residents to prove they are seeking jobs to continue collecting benefits.

This past week, it was reported that just 266,000 jobs were added in the U.S. which was a disappointment since expectations were high for a hiring surge in April.  It was anticipated that potentially a million Americans would have returned to work.  Regardless of the impact of unemployment benefits on employment hesitancy, the fact is that many front-line workers continue to be concerned about the pandemic in their industries.  For obvious reasons, people don’t want to be bringing home the virus to their families.  Also, A Pew Research Center survey earlier this year found that 66 percent of the unemployed had “seriously considered” changing their field of work, a far greater percentage than during the Great Recession.  People are now more aware of the potential dangers of such outbreaks, and would be more inclined to seek other less hazardous employment.  As reported for example, grocery stores in the U.S. shed over 49,000 workers in April and nursing care facilities lost nearly 20,000 workers.  The same considerations can be found among Canadian workers in these and other sectors.  In addition, more affluent Americans and Canadians are retiring early because their retirement portfolios have surged in the past year and the pandemic may have taught them that life is too short.

In conclusion, what the pandemic has done is force many of the affected unemployed to reassess their future.  Employers will have to also reassess their employment benefits, working conditions and levels of compensation in order to attract and recruit workers.  As a consequence of the pandemic, the eventual result will most likely represent a major change in the operation of labour markets in most industrialized countries, including those in the so-called ‘gig economy’.

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May 7

Big Problems When a Handful of Superstar Cities Thrive and Much of a Country Struggles

by bcurry

If there is one thing that the pandemic has highlighted it is the existing economic disparity between so-called “superstar cities” and the rest of a country.  The pandemic clearly demonstrated that there are significant differences in how communities are capable of tackling outbreaks.  Federal policies in recent decades have arguably reinforced the disparities.  In the U.S., research and development (R&D) expenditures went primarily to California, Maryland, Massachusetts, New York, Virginia and Washington, D.C.  In Canada, the majority of R&D expenditures went to Ontario, British Columbia and Quebec.  Within each state and province there are cities that benefited the most, such as Boston, Los Angeles, Toronto or Vancouver.  In addition, their populations grew while populations in smaller urban and rural areas decreased, particularly as people moved into those centers offering the most employment opportunities and public services.

With the decline in manufacturing in both countries and the rise of the information economy, it was only natural that new businesses, especially in knowledge-based industries, would set up in superstar cities.  After all, they had the needed labour force and infrastructure, including broadband services, educational institutions and R&D facilities.  As populations got bigger, with many higher paying jobs, the tax base increased.  A greater tax base allows these communities to offer their population more attractive social amenities, education opportunities and high-standards of health care.  Meanwhile, in the rest of the country, a shrinking population over decades reduces the tax base, leading to under-investment and deterioration of the physical environment and public services, causing even more jobs and people to go elsewhere.

Even in the superstar cities, the results of the pandemic will alter the nature of people’s work environments, particularly for those who will continue to work from home.  The whole notion of urban densification will change with workers being able to work from more remote locations situated outside of the urban core.  This will have an impact on infrastructure development, including public transportation hubs, schools and health care facilities.  No need to worry, for superstar cities will most likely be in an economic position to accommodate these changes.

At no time in our history has there been such a need for major changes as to how we look at urban development.  These emerging developments, demographic and technological, are occurring at an unbelievably fast pace.  The question will be whether national, state/provincial and local governments can adjust fast enough to meet the challenges?  In one way or another, everyone in the country is going to be affected, positively or negatively.  The pandemic has simply accelerated the need to develop national urban strategies, something which to date has not been done effectively if at all.

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May 3

There is a Catch-22 in Pipeline Issues Between Canada and the U.S.

by bcurry

Following Joe Biden’s inauguration as U.S. president, he took the widely expected step through an executive order of cancelling the cross-border permit for the US$14.4-billion Alberta-to-Texas heavy oil pipeline, the Keystone XL pipeline. The decision marks the third time a U.S. president has blocked the construction of this pipeline.  Next occurred the decision by Michigan’s Governor Gretchen Whitmer last November which ordered Calgary-based Enbridge to shut down its nearly 70-year-old Line 5 pipeline by May 12, 2021.  Line 5 carries each day up to 540,000 barrels of crude oil and natural gas liquids across Michigan and under the Great Lakes.  Line 5 is part of Enbridge’s mainland system carrying fuel from Alberta’s oil sands to the Midwestern U.S. and Eastern Canada, especially to refineries in Sarnia, Ontario.  Not surprisingly, President Biden’s and Governor Whitmer’s decisions were applauded by environmentalists and Indigenous groups on both sides of the border.

The difficulty is that Canada is the world’s fourth-largest producer of crude oil, and the U.S. is its top customer.  While past incidents have occurred where crude oil leakages in pipelines, including those which are part of Enbridge’s mainland system, the alternative means of transportation via rail and trucking also represents serious safety issues.  This potential danger was clearly demonstrated in the fiery derailment in July 2013 in Lac-Megantic, Quebec, which killed 47 people and wiped out part of the town.  From an economic point of view, the transport of crude oil and natural gas liquids by pipeline is the most efficient and least costly option.  Realistically, any transition within the U.S. or Canada away from fossil fuels will take time.  While the elimination of fossil fuels makes good environmental sense in light of climate change, there continues to be a dependence on fossil fuels for servicing our industries, running our transportation hubs, producing electricity and heating our homes.  Both countries have to cooperatively work together towards achieving environmental goals without creating bad relations between our governments and citizens.

Back in January, Alberta’s Premier Jason Kenney asked the Canadian government to push the U.S. government to reimburse the $1.5 billion it stands to lose from the cancellation of Keystone XL and to reimburse TC Energy, the project proponent, for the money it has sunk into the project.  Alberta took an ownership stake in 2020, representing more than $1 billion in taxpayer money to fund the construction of the pipeline.  The Biden administration’s decision to block the Keystone XL pipeline has put Prime Minister Justin Trudeau in a very difficult situation, one which he has raised with the President.  On the one hand he has to support Alberta’s oil and gas industry.  On the other hand the Prime Minister has agreed reduce in Canada’s greenhouse gas emissions by 40 to 45 percent within the next decade.  This brings Canada in line with the Biden administration recent pledge to slash U.S. greenhouse gas emissions by 50-52 percent from 2005 levels by 2030.

Critics of the decision to shut down the Line 5 pipeline note that 6,500 good-paying jobs in Sarnia, Ontario, are on the line.  A further 23,500 indirect jobs in that same region could also be impacted, and thousands more across Ontario and Quebec.  Line 5 also feeds into Line 9, which carries oil to refineries in Montreal and Lévis for Quebec’s supply needs.  According to Minister of Natural Resources Seamus O’Regan, Line 5 delivers 66 percent of the crude oil consumed in Quebec.  This means that besides Alberta, the Premiers of Ontario and Quebec are extremely unhappy with the Michigan Governor’s position.  Any decision to move crude oil and natural gas liquids by alternate means is considered less safe, more costly and realistically not viable given the vast quantities that have to be transported.  This is your Catch-22.  For this reason, both Canada and the U.S. need to work much more closely to resolve all relevant issues pertinent to their respective constituents.  Our continuing good trade and political relationships are in the balance.

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May 1

May Day is here, but where is organized labour?

by bcurry

Today is May 1rst, a day celebrated in many countries as ‘May Day’, including in Canada and less so in the U.S.  It should be noted that May Day is one of the most important holidays in communist countries such as China, North Korea, Cuba and the former Soviet Union countries.  Since the late 19th century, unions and worker groups have celebrated the first day in May as an International Workers’ Day, since referred to as May Day.  In North America, May Day largely grew out of the 19th-century labour movement for worker’s rights and an eight-hour workday in the U.S. and Canada.  In numerous cities, there will be parades, picnics and celebratory gatherings by both unionized and non-unionized workers and families.  However, historically, both the U.S. and Canada chose to celebrate the contribution of workers on an alternative national statutory holiday in September, ‘Labour Day’.  So much for the history lesson.

The fact is that May Day is celebrated much more in Europe where countries have long ago implemented universal health care systems, extensive social welfare nets, labour standards laws and other programs aimed at improving and protecting the livelihoods and health of workers.  This is why European countries did not need to introduce very many new assistance programs during the current pandemic, as their existing programs, including paid sick leave and unemployment benefits, cover most of the labour force.  Europe remains a relative stronghold of social democracy in which higher levels of taxation fund national health care systems as well as programs that automatically help those who lose their jobs.  In this way, European countries generally seek to limit economic volatility.  In addition, unions play a greater role in Europe than in the U.S., often sitting on management boards in countries like Germany, Sweden, the U.K., Austria, France and several others.  Together with a right to elect work councils, this is often called “codetermination” — something rarely seen in the U.S. or Canada.

On the other hand, the American economy has been described as a study of inequality, with risks and rewards stretching to extremes, and failures often capable of precipitating disaster, as unemployment frequently separates people from their health insurance policies.  This has forced the U.S. to be much more dependent on economic growth and emergency relief injections if something goes wrong, as it has under the current pandemic.  The Biden administration is pouring trillions of dollars into supporting American families and communities adversely affected by the pandemic, hoping to stimulate the economy as the U.S. emerges eventually from government-imposed shutdowns.  Increasing economic growth is expected to continue, but there are questions as to just who will benefit from such growth?  Recent studies have indicated that the rich have gotten richer.  Wall Street has thrived versus the evident losses experienced by the Main Street economy, especially small businesses and their workers.

With the decline in private sector unionization in the U.S. and Canada, there are fewer and fewer workers willing to march on this May Day.  The pandemic may have greatly knocked the wind right out of the unions’ sails.  There is also every indication that the pandemic may further reduce the number of good paying blue collar jobs, leaving many workers scrambling to secure employment in lower paying non-unionized jobs.  Alas, it is really difficult to happily celebrate this year’s May Day, or next Labour Day for that matter.

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Apr 27

Biden Administration to Study Decline in Union Membership in U.S.

by bcurry

This past week, President Biden announced the formation of a White House task force to promote labor organizing in an attempt to potentially use the power of the federal government to reverse a decades-long decline in American union membership.  Some of this may have been brought on by the recent failed attempt by the Retail, Wholesale and Department Store Union to organize 6,000 workers at Amazon’s warehouse in Bessemer, Alabama.  Amazon has argued that its management did not threaten or intimidate workers.  However, past evidence has shown that Amazon is more than capable of dissuading its workers from joining a union in its more than 800 warehouses which employ over 500,000 people nation-wide.  While Amazon did not admit to violations of labour laws, the company promised in a settlement with federal regulators to tell workers that it would rigorously obey the rules in the future.  Good luck!

The historical decline in union membership in the U.S. is well documented.  The U.S. Bureau of Labor Statistics said the total number of union members fell by 400,000 in 2012, to 14.3 million, even though the nation’s overall employment rose by 2.4 million.  The percentage of workers in unions fell to 11.3 percent, down from 11.8 percent in 2011.  By 2017, union membership was 14.8 million, representing just 10.7 percent of those workers.  The unionization rate for private-sector workers was only 6.3 percent in 2020, reflecting the net effect of declines in both the number of union members in the private sector and the steep drop in private-sector employment. 

Private sector membership particularly declined sharply in the manufacturing sector largely due to the reality that when organized labour dug in its heels, manufacturing companies never thought twice about shutting a factory and transferring production to another country.  Now, the largest sectors involve service industries and high tech companies which are very difficult to organize, especially among low paying jobs and where turnover is high.  Lifetime job security once offered by unions in the manufacturing sector no longer exists, leaving workers vulnerable to company pressures not to organize.  In some cases, as in high tech, companies offer enough benefits to make the need for unions a thing of the past.  Management-side lawyers argue convincingly that many employers have gotten better over the years at heeding workers’ concerns, making unions less necessary.  William Spriggs, the A.F.L.- C.I.O.’s chief economist, acknowledged that unions were doing poorly in manufacturing, retail and elsewhere in the private sector, which has been adding jobs even as union membership continued a slide that has lasted for decades.

The primary piece of federal legislation governing federal labour rights is the National Labor Relations Act which has been around since 1935.  It was explicitly introduced to encourage collective bargaining, but that the law had never been fully carried out in this regard. The principal federal agency established by the Act, the National Labor Relations Board (NLRB), has no power to impose monetary penalties against employers who openly obstruct union membership drives.  The NLRB’s enforcement remedies are few and weak, which means its ability to restrain anti-union employers from breaking the law is limited.

The situation in Canada is somewhat the same.  Since Statistics Canada began measuring unionization through household surveys, the overall unionization rate within Canada’s private sector (15.2% in 2014) has been declining for over 30 years.  This was partially offset by high public sector union density (71.3% in 2014).  The growth of the service sectors in both countries is not expected to significantly change labour markets in the near future.  It will be difficult to organize workers in companies such as Amazon and Walmart, and there is little that governments can do.  Regulatory bodies can simply ensure that the rules are being followed, but they cannot force workers to join unions.  While the Biden administration may be able to bring the National Labor Relations Act into the Twenty-First century, the fact is that economic and industrial changes will most likely determine future unionization rates.  Despite the fact that President Biden is a strong supporter of unions, there is only so much that he can do to reverse the existing decline in these rates.  And that’s not much!

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Apr 25

CEOs Continue to be Overpaid Despite Significant Layoffs in Several Sectors

by bcurry

A recent New York Times report notes that Chief Executive Officer (CEO) pay remains stratospheric, even at companies battered by pandemic.  For years now, I have been studying how CEO compensation has steadily been on a ridiculous climb whereby, according to the Economic Policy Institute, CEOs of big American companies now make on average 320 times as much as their typical worker.  The report notes that in 1989, that ratio was 61-1.  From 1978 to 2019, compensation grew 14% for typical workers.  During the same period it rose 1,167% for CEOs.  The same situation holds true in Canada where, for example, between 1995 and 2007 there was a 444% compensation increase for top Canadian CEOs.

Add it all up and it’s clear that executive pay is on the rise once again despite the millions of workers affected by layoffs due to the pandemic.  Executive compensation is again rising at a much higher rate than employee pay, inflation or even corporate performance.  The old justification that they deserve it based on performance doesn’t wash in many cases.  The Times article noted the following companies’ CEO compensation for last year.  Boeing’s CEO, David Calhoun, was rewarded with some $21.1 million in compensation despite Boeing having had a historically bad 2020.  Norwegian Cruise Line barely survived the year, but the pay of Frank Del Rio, its CEO, was doubled to $36.4 million.  Hilton’s CEO Chris Nassetta received compensation worth $55.9 million in 2020 despite nearly a quarter of the corporate staff members being laid off as hotels around the world sat empty and the company lost $720 million.  General Electric’s CEO, Larry Culp, received $73.2 million last year and could collect well over $100 million more, thanks to a recently updated pay plan.  GE is still reeling from years of mismanagement.

The above noted examples are just a few in a continuing saga of CEOs being outlandishly paid for simply being CEOs, despite companies having difficult times as a result of the pandemic.  Firms will argue that much of this ridiculous situation is a result of how the market has evolved over the years regarding competition for so-called top managers.  They pay lip service to the importance of supporting their workers, but still believe that their CEOs deserve more than 300 times the compensation of those very same workers.  In Japan, and throughout much of Asia for that matter, there’s a much more balanced approach.  In 2007, Japanese CEOs were making on average only 10 times to 15 times more than their base level employees.  When their companies don’t do well, Japanese CEOs insist on taking a comparable pay cut unlike most American and Canadian CEOs.

A sad part about this pandemic on the economic front is that it continues to contribute to the growing societal inequalities that have needlessly evolved over the several decades.  To deal with the economic impact of the pandemic and the deficits incurred by governments at all levels, there needs to be an increase in taxes on multi-millionaire CEOs and billionaires, most of whom have evidently benefited from soaring stock markets.  Failure to deal with increasing inequities will result in more societal pain and poverty.

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