Supermarket workers hold placards in protest in front of a Food 4 Less supermarket in Long Beach, California on February 3, 2021.
(Photo by FREDERIC J. BROWN/AFP via Getty Images)
The illusion that explains why CEOs can make so much more than their workers By Bo Bonner
No one should make in one year what a fellow employee would make in 175. That is the difference between the pay of some CEOs and other executive and their frontline employees. I find this self-evident, and must admit I am not sure what grounds of common appeal I could plum to convince those who disagree.
With no mathematical calculus in which to point out what ratio between the highest and lowest paid employee would be considered just, I appeal to our common imaginative powers instead. In what conception of “giving each their due” does one soul ever deserve as compensation in a single year what another must toil away for more than two average life spans to earn?
The particulars of any case that warrants such observations then are nearly irrelevant. Any situation where one encounters such a chasm between wages, without the most extraordinary of extenuating circumstances, should be easily denounced.
The Narrative Details
Then why get into the details? Because while I readily admit I can add little to the discussion in terms of economics, I do know a thing or two about narratives, and the power of narrative is all in the details.
Those who believe raising wages closes businesses and costs jobs forget to ask a crucial question: even if raising wages cause businesses to close, ought that be so?
One of those narratives is the story, told with data and anecdote, that raising the minimum wage “doesn’t work.” An article at the libertarian site fee.org, purports to provide a real world test case proving that a raise in wages merely closes businesses and reduces job availability.
While the test case does not involve the minimum wage, it does involve a law in a local California municipality. A bill for “hero pay” was passed to increase wages for certain workers, particularly frontline employees during the quarantine. Local grocery store employees for the national chain Kroger would experience a pay bump from 14 to 18 dollars an hour.
In light of these changes — although officials vacillate when asked if the hike was the direct cause — Kroger announced they will be closing several Food 4 Less stores affected by the pay increase. Real world test case in hand, opponents of minimum wage hikes (or minimum wages altogether) declare victory, the “facts” bearing out their argument. That was the narrative, and many people found it convincing.
Those who believe the narrative forget to ask a crucial question: even if raising wages “cause businesses to close,” ought that be so? Could we read this through another narrative? Put aside whether the facts actually confirm what the proponents claim, given how many economists argue otherwise. Facts are not available to us free from the narrative in which they are transmitted.
Facts are always offered as answers to particular questions. These very questions affect the way we receive the information. Therefore, a different set of questions will result in a very different narrative context. So allow me to provide a bit of context, and ask a few questions.
Why the Bottom? Why Not the Top?
According to the 2019 data, Kroger’s six chief officers make north of $30 million a year. The CEO, W. Rodney McMullen, makes $14.2 million on his own. Opponents of the minimum wage increase argue that entry level workers should not be making 18 dollars an hour. Supposedly, they aren’t worth it economically.
But, may I ask, if you think there are people who don’t add 18 dollars an hour worth of labor to Kroger, do you seriously suppose there is a human on earth who could add nearly $7,000 an hour worth of labor to a grocery store chain?
Is there a single human alive today who can add over 350 times the labor value of the people who actually work on the floor of these stores? Do you dare make this point during a pandemic year, one that proves how essential these front line workers were, running the stores at the risk to their health when people needed them most?
It is a matter of the narrative with which we choose to approach the facts. Kroger made $121 billion in 2019 with $3 billion in profit. It’s profits jumped 90percent in the first two quarters of 2020. Is it somehow off limits to ask how raising the pay of a few employees affects this bottom line? If a pay increase of $4 an hour puts the $121 billion bottom line in jeopardy, why must we start our evaluation of the problem (if it is a problem) with the bottom wage earning employees? Is it impossible to imagine starting the cost savings at the top?
The Unjust Chasm
You don’t have to be a radical leftist to look at the sheer chasm between the two and judge that: a) this is not a just arrangement, and b) this will cause division and acrimony between two groups that are supposed to share a united purpose. Pointing out these realities does not require one to argue for universally equal wages. What it does require of us is a willingness to “narrate the questions” in the opposite direction.
Is there a single human alive today who can add more than 350 times the labor value of the people who actually work on the floor of these stores?
Let us just take the CEO’s non-stock compensation, which amounts to approximately $7 million a year. How long would it take for someone making $40,000 a year to make what the CEO did in one? 175 years. In three working lifetimes, assuming they worked for fifty years, the lowest paid worker would not make what the CEO makes in one.
How could these two individuals ever see themselves as “on the same team,” let alone as occupying the same class of dignity? These are serious economic questions, with undeniable ramifications for the Common Good. But they will only be asked through a narrative that begins with concern for the poorest, and accountability for the wealthiest.
A Just and a Living Wage
In Catholic Social Teaching, a just wage is a living wage. The question of what that means is truly perplexing, difficult to generalize, and always dependent on context. But the difficultly of the task does not absolve us from pursuing it.
In the meantime, where economics and philosophical takes on facts and narratives might lead to confusion, Theology reminds us what the Deposit of Faith has consistently proclaimed. To deprive workers of their rightful wages is a sin that cries out to Heaven for vengeance. Our ability to tie ourselves in narrative knots besides, we have all been warned.
Bo Bonner is director of the Center for Human Flourishing at Mercy College and Gerber Visiting Fellow of Catholic Studies at Newman University. With Bud Marr, he is co-host of The UnCommon Good podcast. You can find him on Twitter @RuinUrLifeWell. His previous article for The Catholic Herald was The Widening Gyre.
The article has been slightly revised since publication, with “and made $3 billion” added to the statement of Kroger’s earnings, and “base pay” changed to “non-stock compensation.”