Government is not a business. Nor should it be run like Donald Trump’s business. Let me count the ways.
As other countries outlaw corporate bribery of foreign or domestic companies, the Trump Administration has scrapped the laws binding American Companies’ business standards of conduct as set forth by the FCPA( ), calling it a “ horrible” Law. In November, Trump withdrew from the Executive Industries Transparency Institute, a 15 yr old Global Standard against corruption in managing revenues from oil, gas and mineral extraction.
Makes you think why would an Administration sanction bribery and where are their ethics in business? Judging by the number of lobbyists and attorneys selling influence for money in Trump’s Administration, bribery is encouraged and condoned. This isn’t normal everywhere. The EU is enforcing bribery Laws. They have a cost as shareholders and workers could achieve higher returns on investment and wages would increase without bribes, totaling in the Billions.
The Economist takes up another interesting concept: CEO pay ratios to medium employees pay. The ratios are astounding. During Plato’s era, when asked what should the ratio be between worker and boss, he thought a boss could make 4x the amount of his worker. Centuries later when JP Morgan was queried, he suggested 20x the pay of his employees. Today’s CEO makes on average 130x the salary of their employees and there are several standouts who make up to a 1000x their employee’s salary. Marathon oil is one.
Noting this egregious disparity in compensation, Portland, Oregon has decided to levy a tax on corporations whose CEO‘s earn more than their standard: 10% tax on firms earning 100x their employees and 25% tax on corporations paying their CEO’s 250x their employees. Lawmakers in six states, including California, Illinois and Massachusetts are considering this law. A benefit would be increased state revenue for needed Infrastructure repair and sensible affordable housing for employees.
Donald Trump’s response to CEO compensation disclosure was an executive order to the Dept of Treasury with instructions to scrap the Law enacted by Dodd Frank, stating that CEO salary ratios are not germane to investor decisions. What about the employees? Don’t you think they have a right to know what the Boss and upper echelons earn? It is especially necessary to have wage transparency in this age of Inequality and lack of funds to maintain America and Americans.
Do you think the average worker will continue to work with enthusiasm when they know they can never succeed in this “gig” Economy? Indeed, considering the emphasis on Business and their elite CEO’s, there is no room for growth at the bottom. Only the top are protected. All companies listed on the stock exchange were previously required by Law to disclose the ratio between CEO compensation and the compensation of their median employees.
If you think your wages are stagnant, if you believe you are in a boring job with no way to move up the corporate ladder, You are right to feel resentment toward Donald Trump and the corporations, the lobbyists and enablers he favors. By government policy, he is making the American worker’s life miserable!
My 2 cents, after analyzing this week’s Economist. ( 5/25-6/1) The Affair. Why Corporate America loves Donald Trump.
As a caveat, I would direct my readers to prior Posts, written when Obama was President. I recommended that Obama tax all CEO Government contractors, approximately 10%, if their salary exceeded a ratio of 100 x’s their employee’s compensation. Now we have years of facts showing that ratio between CEO compensation and employee median wages. The average ratio is 130%, one of many reasons for our State of Inequality.
See you Tuesday and we’ll chat.
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