TOO MUCH—Chronicles of Inequality [Jan. 20, 2014]

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The Economy Hub/ This blog from Pulitzer Prize-winning Los Angeles Timesbusiness columnist Michael Hiltzik regularly spotlightsthe games plutocrats play — and the price the rest of us pay.

In 2012, Goldman CEO Lloyd Blankfein took home $26 million. Bank clerks nationally, the University of California at Berkeley’s Labor Center reported last month, only average $24,100 a year. Lloyd Blankfein last year likely took home somewhere close to 1,000 times the pay of his bank’s lowest-paid workers.

Elsewhere in America, CEOs at major financial and corporate enterprises are pulling down over 350 times average U.S. worker pay. No other nation sports a pay gap that wide. But other nations are catching up. Canadian CEOs took home 105 times average Canadian pay in 1998. They’re taking home 171 times today.

What can we do to reverse these widening gaps? Toronto-based public policy analyst Peter MacLeod has one idea. We need, he says, to start “naming and normalizing” a more rational and equitable standard for who gets what.

We need, in effect, to start honoring enterprises that practice fair pay and stop rewarding — with our consumer and tax dollars — those enterprises that are making our societies ever more unequal.

Last summer, with support from the Canadian foundation world, MacLeod founded a new international effort to put this new standard in place. His new initiative — Wagemark — has already begun certifying those enterprises that pay “competitive, responsible and sustainable wages.”

To gain this Wagemark certification, enterprises must pay their top earner no more than eight times the pay of their workforce’s lowest-paid 10 percent.

This eight-times standard may seem hopelessly utopian in a world where corporations routinely pay executives hundreds of times what they pay workers. But at least 90 percent of all businesses, MacLeod last week told Too Much, are currently operating “in a 15-to-1 or better universe.”

The “most conspicuously equitable” of these small- and medium-sized employers make up the initial core of Wagemark-certified organizations. Some of them — like the Bellwoods Brewery — already enjoy wide name recognition, and this spring Wagemark will be announcing many more such enterprises.

Wagemark-certified companies, nonprofits, and public agencies have all had an independent accountant or auditor confirm that their organization meets the Wagemark eight-times pay standard.

The word about Wagemark’s certification process is beginning to spread. News stories on it have so far appeared in most all the major Canadian news outlets, and last month Upworthy introduced Wagemark to a broader online audience.

“This could have huge possibilities,” the Upworthy piece noted, “for folks who want to spend their dollars with companies who actually treat people well.”

Some international outreach has begun as well. In Denmark, the nation’s largest newspaper gave Wagemark a front-page coverage that sparked a week of national dialogue, in the press and talk-radio, about equity and pay.

In Scandinavia, MacLeod would learn from this discussion, “people don’t find the eight-to-one ratio particularly radical.” And Americans back in the middle of the 20th century, he adds, wouldn’t have considered an eight-times standard all that radical either.

Back then, even the largest American corporations seldom had pay divides between top executives and workers that went wider than 30-to-1 — and America prospered. With a relatively narrow corporate pay gap in place, a mass middle class, the world’s first and finest, took root.

The American CEO-worker pay gap today is running over 10 times wider than that 30-to-1 of the mid 20th century, and MacLeod regularly runs into apologists for this wider divide.

“Are you saying,” he like to ask them, “that executive talent today has become ten times scarcer or ten times more productive than executive talent back then?”

No evidence, MacLeod points out, supports that contention. What has changed over the past half-century? Our cultural pay paradigm, how we value workers and their work. Pay differentials that would have seemed unconscionable only a few decades ago now seem business as usual.

Wagemark is aiming at nothing less than challenging today’s suffocating sense that pay excess at the top reflects some inalterable market inevitability.

But efforts like Wagemark, MacLeod stresses, can never succeed in isolation.

“Our executive pay problem,” he explains, “has been growing for decades, and it’s going to take pressure from a lot of different directions to change course.”

The folks involved with Wagemark see their work as a complement to campaigns for minimum and living wages and drives to make tax systems more progressive. And they’re also building for the long run. They’ve designed their certification process to be completely self-sustaining.

Enterprises seeking the right to showcase their Wagemark status will pay a small fee to go through the certification process. The Wagemark Foundation will be devoting this fee income to maintaining a registry of certified fair-pay employers and commissioning original research on how pay disparities impact the effectiveness of our enterprises.

Coordinating all this will be a small Wagemark paid staff.

“We’re as much about building a conversation,” Wagemark chairman MacLeod explains, “as an organization.”

The Wagemark team has no illusions about Fortune 500 companies getting on line anytime soon to apply for eight-to-one ratio certification. But they do see Wagemark making concrete contributions to a process that gradually ups the heat on corporations that continue to brazenly manufacture inequality.

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Wagemark hopes to work with city officials, for instance, on incorporating pay ratios into the government procurement process, by giving firms that meet the Wagemark pay ratio standard a leg up in the contract bidding process.

“We’re really excited about starting small at the municipal level and then expanding,” says MacLeod. “Check back with us in five years!”

Interested in learning more about Wagemark and how your company, nonprofit, or public agency can apply for Wagemark certification? You’ll find completebackground and application information online. And a video, too!

Dean Baker, David Brooks’ Primitive Defense of the Rich, Center for Economic and Policy Research, January 17, 2014. A demolition of the latest high-profile case for ignoring inequality.

Sam Polkjan, For the Love of Money, New York Times, January 19, 2014. A must-read insider look at wealth addiction on Wall Street.

Alyssa Battistoni, Alive in the Sunshine, Jacobin, January 2014. How the rich ruin the environment.

Learn more about Too Mucheditor Sam Pizzigati’s new history of the forgotten triumph over America’s original plutocracy.

Among these numbers: The world’s 200,000 ultras hold over $5 trillion in real estate, about 3 percent of all the world’s real estate value. Not too shabby for a cohort that makes up only 0.003 percent of the world’s population.