America needs FDR’s Second Bill of Rights
Earlier this month, Federal Reserve Board Gov. Sarah Bloom Raskin spoke out about the relationship between pay disparity and our economy. Raskin noted that the income gap between CEOs and workers was the widest it’s been since 1928, just prior to the stock market crash which threw America into a depression.
Just how wide is the gap? According to Governance Metrics International, CEOs saw their pay rise by 27 percent
last year, while the average employee only netted a raise of about 2 percent (other sources say 0 percent to 1 percent). Median CEO pay in 2010 was $9 million, and their average bonus was $2.2 million. It’s no wonder, then, that the wealthiest 1 percent of our population account for 20 percent of our nation’s income.
what about the millions of people who have already lost their homes and healthcare coverage from a recession caused by greed?
Kenneth Douglas, former CEO of Dean Foods knows all too well about executive pay and, like Raskin, he is concerned about the growing income gap between the haves and the have-nots. Douglas ran Dean Foods until 1987 and during his tenure there, he increased sales from $165 million to $1.4 billion. His salary at the time was $1 million, but it could have been more. Peter Whoriskey of the Washington Post interviewed Douglas who told him,”My board said, ‘We want to give you more money as a reward for the company’s success.’” Douglas repeatedly rejected the offers, saying he was “making enough.” Fast forward to 2010, and Douglas’ successor, Gregg Engels, is making $10 million per year. Douglas had a Cadillac. Engels has a private jet.
The Dean Foods story is an example of the moral decline of America’s corporations over the past two decades, but it is also an indicator of far-reaching economic problems. Said Raskin of the growing pay disparity, “The inequality is destabilizing and undermines the ability of the economy to grow sustainably and efficiently. Income inequality is anathema to the social progress that is part and parcel of such growth.”
Kenneth Douglas answered the age old question of “How much is enough?” when he said he could live comfortably on a million-dollar salary. His job was to make an honest profit for Dean Foods, and to reinvest that profit in the company and its workforce. But today’s greedy CEOs and their boards have a different focus, which is to shutter plants in America, open plants in third-world countries, pay foreign workers slave wages, ship the cheaply made prod ucts back into America with very little tariff and sell the products at huge profits which end up paying for exorbitant bonuses and dividends.
And just how profitable are these corporations? Former President Bill Clinton told CNN’s Wolf Blitzer that US companies with overseas operations have $2 trillion in cash that they have not yet committed. And that cash is only taxed at a rate of 5 percent because once upon a time, President George W. Bush said that lower taxes would result in the creation of jobs. He was right, except that the jobs created were in Indonesia, Korea and the Dominican Republic.
President Obama’s solution is to tax wealthy people at a higher rate. But that doesn’t create jobs either, nor would the additional revenue solve our budget problems. As I’ve stated before, only the repeal of bad trade agreements and suspension of tax breaks for hiring overseas workers will make a difference.
But what about the millions of people who have already lost their homes and healthcare coverage from a recession caused by greed? Their suffering could have been prevented had a little known act been passed in 1944.
In his final State of the Union address,
President Franklin Roosevelt proposed enacting the “Second Bill of Rights,” which would have guaranteed everyone the right to a good job and a level of remuneration that would allow the employee to provide for his or her family. It stated that every family has the right to a decent home and access to medical care. And the Second Bill of Rights declared that we would all be protected from the economic fears of old age, sickness, accident and unemployment. Unfortunately, FDR died before the Second Bill of Rights could be enacted. That’s too bad because it would have changed EVERYTHING. Today’s greedy CEOs wouldn’t be able to get away with laying off American workers and running sweatshops overseas. They wouldn’t be allowed to keep all of their obscene profits for themselves. And the Second Bill of Rights would have protected us against the greed of Wall Street.
It’s not too late to revisit FDR’s grand plan, but don’t hold your breath. Republicans and Democrats can’t even agree on a debt ceiling because they’re too busy arguing about light bulbs. Still, wouldn’t it be wonderful if one man’s dream could end a nightmare for all of us?
Jim Longworth is the host of “Triad Today,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).