Wage Gap - Rich Men, Poor Men

There is an increasing wage gap between the top executives of companies and other workers. Top executives in some large companies live a life of luxury with private jets at their disposal. What caused this view that only those at the top really matter?

An article titled “Executive pay drives increasing wage gap” by Peter Whoriskey June 20, 2011 and published in the Seattle Times looks into the pay gap using one company as an example. The pay and perks of the CEO of this company have increased exponentially since 1970 while in real terms the pay of rank and file workers have decreased.

There may be one factor helping to drive the view of increasing value of executives versus less value of other workers, automation. The increased use of automated systems in everything from manufacturing to sales helps create a view that workers are simply attached or enable the automation. The workers monitor the automated systems or fill in gaps of processes that the technology can’t perform. Customer relationship management systems in sales capture vital customer data and give alerts on follow up dates that sales representatives carries out. Although the system does a lot, it can’t actually make the calls. The automated manufacturing systems need skilled individuals to keep them operating at top levels. Simply put, the skill, concern and dedication of individual employees determine the quality of the final product and services a company delivers.

We have entered the era of no-lose situations for many CEOs. Golden parachutes contain payouts so large that they are disconnected to the success or failure of the firm or performance of the executives. Some of those same executives have instituted policies during this recession that restrict hiring permanent employees in favor of bringing on contract workers. Many firms are creating jobs in foreign markets instead of the United States.

The bottom line is the excessive levels of pay and perks for top executives totally disconnect them from other workers in their companies. This situation creates an environment of class warfare instead of unity.

Blackout – Black Unemployment Rate Rises As Overall Rate Falls

 Empty - Ghosts of The Middle Class

Sometimes statistics speak louder than shouts from rooftops. Cheers went up as the March 2011 jobless rate fell from 8.9% to 8.8%. Hold the celebrations unemployment rate for black increased from 15.3% to 15.5%, almost twice the 7.9% of whites.

What is going on in the face of celebrations surrounding the number of jobs being created and an unemployment rate that has dropped to 8.8% from 8.9% the month before, blacks seemed to be left off the party invitation list. Hispanics have little cause to be raising their glasses for a toast as well. The unemployment rate for Hispanics fell from 11.3% to 11.1%, but it is the unemployment rate among blacks that is totally disconnected and going against the tide.

The Bureau of Labor Statistics report lists the rates for blacks, whites, Hispanics and all other groups in the United States. Even inside the black community the pain is unevenly spread. Black women had a drop in their unemployment rate from 13% to 12.5% while black men went from 16.2% to 16.8%.  Let’s not gloss over the gap between black men and black women with a 4.3% more of an unemployment percentage among black men.

Let’s get away from percentages and get into how many people this represents. The tables state that 7,923,000 black women are employed compared to 6,758,000 black men. That means that 1,165,000 more black women have jobs than black men. On the flip side the number of unemployed black women is listed at 1,127,000 versus 1,361,000 black men. There is a quirk in the numbers that show fewer black women have jobs than before. The number of black women that were employed in February was 7,993,000 compared to 7,923,000 which are 70,000 fewer jobs and the jobless rate went down for black women. You may ask how fewer working black women mean a decreased in the unemployment rate, it is because so many gave up looking for work and were not counted in the numbers.

The participation rate for black women went from 63.1% to 62.1% and that caused the rate to decrease even though 70,000 fewer black women had jobs. Black men actually had an increase in the number holding jobs from 6,745,000 to 6,758,000 which is 13,000 more jobs and the jobless rate among black men went up because the participation rate went up from 68.2% to 68.7%. Simply speaking, more black men looked for jobs and the jobless rate went up due to math.

So, what is going on? Blacks don’t seem to be included in this slow recovery and what does it mean for the long term future of the black community. The unemployment rates reported are always lower than reality. What is the rate if part-time and underemployment are factored in. Where are the crisis level emergency outcries, because as we speak, decades of economic gains in the black community are being destroyed?