CEO pay report shines a light on the fact most of us are falling behind

The US has long been the poster child for political tomfoolery, rising inequity and un-ironic hypocrisy, with the current goings-on in Congress being somewhat par for the ever-sinking course.

Large swaths of the Republican party that have gone off the deep end see no problem in reversing course from the stances they took when the former guy was in the White House.

Overspending, tax cuts for the wealthy and resultant deficits weren’t an issue until Joe Biden was elected. That’s doubly so with the party taking control of the House of Representatives.

Low-information voters and outright lies may have helped Republicans pass damaging tax reforms, but as with all money matters with government in the States, there’s a certain element of aspirational hopes involved: Many Americans see themselves as middle class, with a good chance of becoming wealthy, at which point they too will benefit.

It’s a formula that allows for the kind of inequalities that go beyond those found in Canada, Europe and other advanced economies. Still, we may be seeing some increase in awareness, despite business and government intentionally forgetting the lessons of 2008.

As it does every year, the Canadian Centre for Policy Alternatives brought the issue of inequality into stark relief with its report on the compensation of Canada’s top 100 CEOs. By 9:43 a.m. on January 3, that select group had already pocketed $58,800 – what it takes the average wage earner an entire year to make.

The report shows the country’s highest 100 paid CEOs make an average of $14.3 million, based on 2021 figures. That’s 243 times the

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average income, up from the previous high of 227 in 2018.

“If you measure this massive pay disparity in time, less than an hour after the first working day of the year begins, Canada’s highest-paid CEOs will have already made $58,800 or what it will take the average worker the entire year to make,” says CCPA senior economist David Macdonald of the report’s findings. “You could call CEO pay the breakfast of champions.”

While inflation hurts workers, it’s great for corporate profit that have hit historic highs, he notes. When profits go up, executive bonuses are driven way up. In 2021, variable compensation (bonuses) made up 83 per cent of the best-paid CEOs’ total compensation, up considerably from 69 per cent in 2008.

“We think of inflation as bad for everyone, but for CEOs it’s the gift that keeps on giving. Historically high profits based on historically high inflation mean historically high bonuses for CEOs,” Macdonald says. “When times are bad, like during the pandemic, CEO bonus formulas are altered to protect them; in good times, like 2021, the champagne never runs dry.”

It’s a message advocates for real, public-oriented reform want us to take to heart, one that first gained some traction with the Occupy movement and, later, within the election campaigns in Canada, Europe and even the US (the Bernie Sanders effect, not Trump’s fake populism, quickly dropped in favour of personal gain).

Such movements gained some ground only to break on the battlements of public apathy and entrenched corporate interests. While casting some light on the inequities of the system, the movement’s failure to breakthrough echoes the string of letdowns that followed the financial collapse of 2008, as politicians of all stripes sold out the public interest to corporations lobbying against regulation and accountability.

We got platitudes – lip service – but no action.

What did stick from the Occupy experience are the 1% and 99% labels. Not just catchy, they are appropriate as they show the growing economic inequities in our society: a handful of people got richer even as the majority of us took a hit. That’s a problem in itself, but the real story lies in the fact that those who have profited are responsible for the poor economy, having lobbied for the deregula- tion, trade and fiscal policies that created the mess.

After taking inflation into account, weekly earnings are now lower than they were during the worst of Canada’s 2008-09 recession, resulting in a dangerous mix: Canadians are feeling the squeeze of shrinking disposable incomes, a rising cost of living, and record-high household debt. We can add to that list housing shortages and skyrocketing prices in the last few years.

To be sure, reports such as this latest from CCPA aim at the emotions of class warfare, of which we could use more. That’s precisely what’s missing from political debate, here as assuredly as in the US. Much of the public discourse is really just a distraction from the bigger issue, namely the framework of our civil society. That has more to do with regulatory matters than it does with particular spending choices.

In short, it’s about who benefits from the political and economic systems we’ve created – and let’s be clear: they are manmade, not pre-ordained. For much of the postwar era, it was a large segment of the population. For more than 40 years, however, the number of beneficiaries has grown smaller, increasingly in favour of the wealthy and corporate classes. Everybody continues to pay, but fewer and fewer profit.

Conservative governments, funded by those who’ve seen the most benefits, have certainly led the charge against the types of advances that came out of the Depression/ Second World War experience, including regulations governing minimum wages, working conditions, the environment, corporate ownership and financial services, to name a few. But they’ve been joined by their major opponents here (Liberals), in the US (Democrats) and the UK (Labour) as money influences the debate.

Decision after decision that has been harmful to the middle class has been couched in just the opposite terms – supporters knowing full well you can’t sell policies by saying a handful will make out like bandits at everyone else’s expense.

As with drops in corporate taxes and shifts to consumer taxes, the goal is to shift the burden to you. This will continue transferring wealth to those already making the biggest gains while contributing to the debt loads of middle-class Canadians trying to maintain their position as real incomes – both pre- and after-tax – continue to fall.

It's all about the math, even if it doesn't add up.

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DYER: On the persistence of politicians

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→ from burnout.

She didn’t use that word, but it’s clearly what has happened. As she said herself: “I know what this job takes, and I know that I no longer have enough in the tank to do it justice. It's that simple.” The hardest thing is knowing when to stop, but she has figured it out.

Is this because she’s a woman? Probably not. Margaret Thatcher went down fighting after 11 years in office, and only assassination removed India Gandhi after a total of 16 years in power.

Is it because she’s a new mother? Perhaps in part. She’s only the second national leader to give birth while in power, and having an infant and then a toddler at home is one of life’s most exhausting experiences, even if you have a great deal of help from your partner.

Her own assessment is that she can’t do the job justice any more, and that’s greatly to