Hardly a CEO in the country would not argue that high wages are necessary to attract the very best type of chief executive. They make precisely that argument in defense of their own bloated paychecks. Paying less would put the stockholders at the mercy of a lower type of CEO altogether — a less competent and less efficient steward entirely.
But not a one of these CEOs, obscenely overpaid or merely grossly so, would give a moment’s consideration to the idea that low wages might result in less efficient and less competent workmen as well. Nor that higher wages might attract a better class, likely to work smarter and harder. Somehow workers do not need the motivation of good pay, while managers can hardly exist without it.
As we see in this uplifting story from CNN:
According to the report “CEO Pay and the Great Recession,” chief executive officers of the 50 firms that laid off the most workers since the start of the economic crisis earned nearly $12 million on average in 2009. That’s 42 percent more than the average pay of CEOs at S&P 500 firms as a whole.
“I think that really shows a really perverse incentive system in this country,” said Sarah Anderson, lead author of the Institute for Policy Studies’ 17th Annual Executive Compensation Survey. “You are handsomely rewarded for slashing jobs in the middle of the worst economic crisis in 80 years,” she said…
Another disconcerting finding of the report: 72 percent of layoff-leading firms announced mass layoffs while delivering positive earnings reports. Anderson explained layoffs are really driven by efforts “to boost short-term profits even higher and also just to continue to have such high CEO pay levels.” She said these mass cuts are often bad for business over the long-term because they impact worker morale, which can lead to lower productivity. She said they also result in additional costs related to hiring and training new workers down the road.