By Joe Goldberg
Hats off to David D’Alesandro, CEO of John Hancock, for exercising leadership in the janitors labor crisis. In an age when CEOs seem more concerned with maintaining their private jets than maintaining employees’ retirement funds, his decision that John Hancock contribute $1.5 million to a strike fund was more than refreshing.
Not only the janitors’ union, but also the Boston community as a whole, is feeling the effects of a bad economy. College kids are seeing shrinking allowances, restaurants are seeing fewer customers and the state is seeing far less tax revenues. If there has ever been a time to draw attention to the obscene amounts of money CEOs take home, that time is now.
Of course, the gap between executive and worker income is nothing new. This disparity has traditionally been explained by the fact that top executives have far more education than the average employee. The problem is that the income gap is getting wider and wider. According to “Business Week,” CEO income went up 571 percent between 1990 and 2000. Compare this to Bureau of Labor statistics, which indicate unskilled workers only enjoyed an increase of 37 percent during that same period. This barely outpaces inflation, which was 32 percent in that decade.
An even more disturbing trend is that the CEOs who laid off the most workers in 2000, earned more than CEOs who did not. According to a report by the Institute for Policy Studies at United for a Fair Economy, average total annual income for CEOs of the 53 corporate layoff leaders was about $24 million in 2000. The average for all CEOs was $13 million.
So, we clearly have a problem of equity that leads to a greater philosophical question: is there any room for fairness in our cutthroat capitalist system? I believe that Hancock’s D’Alesandro has begun to answer this question. The solution lays in progressive CEOs who will look out for the long-term well being of their workers. By exercising such concern, executives will not only alleviate their guilty consciences, but they will also generate positive media attention, and limit workforce turnover costs.
Dr. Jim Goodnight, recently featured on 60 Minutes, knows about keeping employees happy. Since founding the SAS software company in North Carolina, he has made billions by investing in his workers. By giving them free daycare, heath care, swimming pools etc., he has enjoyed one of the lowest turnover rates in the software industry. This has saved him millions, he says.
While D’Alesandro’s $1.5 million stops way short of what the janitors may deserve, he sent an important message to the business community of Boston. That message is that the heath and well being of society’s workers is everyone’s responsibility. He said, in effect, that if the responsible party cannot or will not step up, someone else should.
Because the janitors don’t technically work for John Hancock, it would have been easy for D’Alesandro to abdicate responsibility, placing it instead on the cleaning contractors. But rather, taking such a shortsighted approach, D’Alesandro did the ethical thing that more than paid for itself in good publicity.
So, what will it take to bring about this revolutionary change in thinking among CEOs?
First of all, we should recognize and applaud people like D’Alesandro who have taken steps to improve the situation. Next, we need to keep an eye on the ones who live large and treat their workers badly. No CEO wants to be lumped in with Enron and WorldCom these days, so the time is right for increased diligence.
Finally, we need to reclaim this issue as one affecting all Americans of all political persuasions. If we continue to let this be an issue for the far left faction of American politics, the obnoxious heckling that was evident during President Freeland’s speech two weeks ago will muddle our voice. Whether you’re a gun toting libertarian groundskeeper, or a tree hugging green party journalist, chances are you deserve more from your CEO.
The corporate scandals of the past year have taught us that we need to keep an eye on the pocket books of top executives. Let us unite as the 99.9 percent of Americans who earned less than $10 million last year.