Further Evidence of the Rich Becoming Richer and Workers Poorer
Plundering of the U.S. Economy During the Pandemic
A recent report by Sarah Anderson of the U.S.-based Institute for
Policy Studies (IPS) entitled "Pandemic Pay Plunder" provides
details of the extent of CEO corruption and plunder of social wealth
during the pandemic. Average CEO expropriation of value from the
socialized economy rose 15.9 per cent in 2020.
Under the cover of declaring they would forgo salary increases
during the pandemic, CEOs cashed in company stock options and vested
stock, greatly increasing their personal wealth. Stock-related
components make up roughly three-fourths of total CEO expropriation of
value according to the IPS.
In contrast to the 15.9 per cent increase of CEO expropriated value,
the U.S. Labor Department (USLD) reports working class individual
reproduced-value representing workers' wages and benefits from the sale
of their capacity to work increased just 1.8 per cent in 2020.
The sharp difference in workers' reproduced-value and CEO
expropriation of realized added-value during 2020 meant the
CEO-to-worker difference in claims on new value jumped from 276.2 times
in 2019 to 307.3 times in 2020. This figure represents the average
multiple of CEO expropriated value to workers' wages and benefits.
U.S. Annual Price Inflation Now at 4.2 Per Cent
Workers' average claim on the new value they produce for the sale
of their capacity to work increased 1.8 per cent during 2020. This was
just 0.2 per cent above what the USLD analyzed as the 1.6 per cent
increase in the cost of living for the year generally called price
inflation.
The USLD notes that price inflation dropped for several months
during the early months of the pandemic but has since risen
significantly, especially in 2021. For the previous 12 months to the
end of March 2021, the annual price inflation rate jumped to 2.6 per
cent and in just one more month to the end of April, the annual rate
has soared to 4.2 per cent. U.S. workers are confronted with the task
of fighting for large wage increases just to keep pace with the rapidly
rising cost of living. Price inflation also bodes ill for interest
rates on borrowed money including mortgages as lenders will want to
push rates higher.
Carnival Cruise Lines
Regarding CEO expropriation of social wealth, Sarah Anderson gives
the example of Arnold Donald, CEO of Carnival Cruise Lines. She writes,
"After the pandemic shut down their industry last March, Carnival and
other cruise lines scrambled to get paying customers home -- often
while stranding employees at sea. As late as August, the
company still had employees stuck on ships. That same month, the
company's board awarded CEO Arnold Donald a special 'retention
and incentive' stock grant that inflated his 2020 compensation to $13.3
million -- 490 times more than the company's median worker pay of
just $27,151."
 Anderson
says that to survive Carnival and other cruise lines relied on a March
23 announcement that the U.S. Federal Reserve (the Fed) would engage in
"unprecedented lending" at cheap rates and "backstop loans" from the
global private investment cartels. The Fed's announcement to buy
"unlimited" bonds to free up capital for lenders to invest in
companies allowed Carnival and other cruise ship companies to raise
money at low rates. The companies issued billions of dollars in bonds
and equity that previously lacked buyers who were now willing because
of the Fed's "unprecedented lending" at cheap rates.
The cruise lines including the Disney cartel are global monopolies.
They are not registered in the U.S. and do not pay U.S. corporate
taxes. Regardless of this fact, the Fed intervention allowed the global
companies to borrow heavily at preferred rates during the pandemic and
rescue their investments from bankruptcy.
Anderson writes, "Within days [of the Fed announcement], Carnival's
investment bankers at JPMorgan Chase & Co. were talking to
conventional investors such as AllianceBernstein Holding and Vanguard
Group about a deal. By April 1, the company had raised almost $6
billion in bond markets, paying rates far below those executives had
discussed just days earlier [before the Fed announcement]."
Anderson writes, "Carnival had to rely on a Federal Reserve lifeline
to stay afloat, but board members still went out of their way to pad
the CEO's paycheque while their workers struggled. This behaviour, I
learned, was common among America's top tier corporations. In a new
report for the Institute for Policy Studies, I found that 51 of the 100
largest low-wage U.S. employers pulled similar manoeuvres to pump up
CEO pay during the pandemic. Average CEO compensation at these
companies rose 29 per cent to $15.3 million in 2020, while typical
worker pay dropped by two per cent to $28,187."
Tyson Foods
Anderson gives the example of meatpacker Tyson Foods whose employees
suffered at least 12,000 COVID-19 infections and 38 deaths. She writes,
"When executives [in Tyson] didn't meet their cash bonus targets, Tyson
directors gave them stock awards to make up the difference. Company
chair John Tyson, the heir and grandson of the
company founder, hardly needed that extra boost. His personal wealth
has increased 72 per cent during the pandemic -- to $2.6 billion.
"Fifteen of the 51 low-wage employers that bent rules to inflate
executive pay had CEO-worker pay ratios higher than 1,000 to one. At
Chipotle, the board modified performance metrics to boost the CEO's pay
by $23 million to a total of $38 million, 2,898 times median worker
pay."
 Anderson
charges that following the 2008 economic crisis CEOs of the largest
companies, "to hit their bonus targets," have made U.S. workers "more
vulnerable by outsourcing jobs and turning remaining jobs into poverty
jobs with no benefits." She declares the U.S. economy "needs to change
course" and "steer corporations toward pay
fairness." She does not say how "pay fairness" can be achieved, what
she would consider "fair" or what social force is capable of
accomplishing this goal of "steering corporations" towards what goes
against their aim of maximum profit. Those who own and control the
basic sectors of the socialized economy also exercise overbearing
influence over
official politics with their money and social connections, and
vehemently oppose any new pro-social direction for the economy.
A change in the direction of the economy has to come from the
working class who receive reproduced-value in exchange for their
capacity to work. The reproduced-value is in direct contradiction with
the added-value the imperialists expropriate from the new value workers
produce. This clash over the new value arises from the basic
contradiction in the economy between its socialized nature but private
ownership and control. This means in essence that change can only come
from the working class itself organizing and waging class struggle in
its own interests and that of the society with the aim of giving the
economy a new pro-social direction, and bringing ownership and
control of the basic sectors into conformity with the already
socialized productive forces.
This article was published in
June 21, 2021 - No. 59
Article Link:
https://cpcml.ca/WF2021/Articles/WO08591.HTM
Website: www.cpcml.ca
Email: editor@cpcml.ca
|
