Reverting to feudalism

Brian
Brian Jones
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Good news on the economic

front — despite rising demand at Canadian food banks, none of the 100 highest-paid CEOs in Canada had to rely on charity to obtain a Christmas turkey.

According to news reports this week, the average annual income of the Top 100 CEOs is $8.4 million. That’s less than is paid to superstar puckster Sidney Crosby, but then, the headaches one gets from running a major corporation, though significant, don’t necessarily rival “concussion-like symptoms.”

Also newsworthy was that the average Canadian earns $44,366 per year, and the average Top 100 CEO had already earned that amount by 2:30 p.m. on the first workday of the new year, Jan. 2.

This information, based on 2010 statistics, was in a report by the Canadian Centre for Policy Alternatives.

The Canadian Centre for Policy Alternatives, it should be noted, is “left-leaning,” meaning it still clings to the quaint and antiquated notion that fairness has anything to do with economics.

Workers railroaded

Meanwhile, at the other end of

the economic spectrum, full-time workers earning minimum wage take in an average $19,798 per year, ensuring a life of poverty, no matter where in the country they live.

Even unionized workers aren’t safe from the country’s marauding millionaires. In London, Ont., employees at a locomotive factory were locked out this week and told to take a 50 per cent wage cut. Henceforth, wages would start at $16.50 per hour. No word yet on whether area food banks were extra busy.

And that’s not all. The plant’s owner, Electro-Motive Diesel Inc., informed workers that the company would no longer contribute to their pension plan.

Caterpillar, the American parent company, pulled in an estimated US$58 billion in revenue in 2011, and earned a net profit of US$4 billion.

Understandably, the left-leaning Canadian Auto Workers howled about “corporate greed.”

Meanwhile, in Quebec, aluminum producer Rio Tinto Alcan shut down one of its smelters and locked out 800 unionized workers, but continued to operate “at two-thirds capacity by about 200 non-union staff.”

Paying for goals

Despite all the boasting about technology and progress and 21st-

century this and 21st-century that, there are a lot of feudal attitudes held by those with economic power.

We are reverting to a society of lords and peasants, although a main difference is that nowadays there’s less mud.

It has become a cliché to complain about the multimillions earned by athletes, rock stars and movie stars. But their salaries can easily be explained by supply and demand. Consider Crosby. If 15,000 people were willing to pay $200 each to watch you work, you too could demand $9 million from your employer.

If the most people were willing to pay was $20, Crosby would see his salary be relative to those ticket prices — $900,000, say. In the entertainment business, the relationship between earnings and what fans are willing to pay is fairly straightforward.

But the rules of supply and demand don’t explain the huge salaries of CEOs, or the growing gap between their earnings and those of their employees. (According to the Canadian Centre for Policy Alternatives, Top 100 CEOs now earn 189 times as much as the average Canadian; in 1998, they earned 105 times as much.)

Some shills in the business media this week defended the salaries of Top 100 CEOs. A common argument is that Canadian CEOs are brilliant, and their competence adds value to their companies.

Fair enough. But this logic must also then be extended to other employees. Their competence creates earnings for the company, so, to be consistent, they also deserve top dollar for their efforts. Instead, Canadians’ earnings, in real terms, have been falling for years.

Brian Jones is a desk editor at The Telegram. He can be reached by email at bjones@thetelegram.com.

Organizations: Canadian Centre, Policy Alternatives.The Canadian Centre for Policy Alternatives, Electro-Motive Diesel Canadian Auto Workers Canadian CEOs The Telegram

Geographic location: Canada, London, Ont., Quebec

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  • mike from ontario
    January 07, 2012 - 20:35

    I am the owner and operator of a mid sized company. A year ago (roughly), invested in technology that would eliminate the jobs of just over 100 of my employees. The employees were uneducated workers who did a job that technology was capable of doing, automatically, without the workers. My income from this company went up 16 times. I gave my IT staff a raise for managing this new technology, and paid a consulting firm for their services which made the elimination of the jobs possible. BUT none of this is social injustice. It is simply society evoloving. There are winners (the IT staff, the 1 IT guy whose job was created BECAUSE using a computer instead of people is possible, the consulting firm, and ofcourse myself) and losers (the displaced workers). I took the risk of investing a small fortune on the technology, and therefore earned the reward of increasing my profit margins 16-fold. It is not social injustice, but rather smart economics and technological efficiency. The demand for my company's services was growing, and the need to fulfill this demand can now be completely done by computers (and a skilled IT staff). I see myself as a CEO who worked to make more money for myself. To the situation at hand, I wouldn't even bother negotiating with the London workers. The jobs would have, and should have, been moved to the US by now.

  • Colin Burke
    January 07, 2012 - 09:08

    We are not exactly "reverting to a system of lords and peasants." The real fault of that system is not that it was unjust but that it was, like capitalism, a system: socially as well as economically systematic. Peasants, when actually serfs, enjoyed the results of their own labours, being obliged to render to their lord a certain fixed amount of what they produced, which could not be raised, and a lord could not evict a serf. The serf was bound to his land and his land to him, as was the lord bound to his land and his land to him; neither lords nor serfs might sell their lands but were obliged to live on their lands and from them. People who throw around the words "medieval" and "feudal"as universal, all-purpose censure would do well to read more history than we get in our schools. The economic system out of which feudalism evolved was more akin to modern capitalism, consisting as it did of masters and slaves.

  • Doug Smith
    January 06, 2012 - 12:30

    Mr. Jones an excellent article. While society has evolved technologically to everyone’s betterment, our economic justice values are still firmly rooted in the Middle Ages. Why so many don’t seem to have any empathy for those economically disadvantaged is truly regrettable. Religion is of course to blame for this sad state of affairs. Doug Smith, GFW

    • Jane R
      January 07, 2012 - 07:59

      I hope your tongue in planted firmly in your cheek. I've found the most devout people usually have great empathy for the disadvantaged, whether they are Hazel McCallion (mayor of Miss.) or my local cat-lady who lives on disability.

  • Politically Incorrect
    January 06, 2012 - 11:01

    The difference, Mark, is that besides controlling immense amounts of wealth, they also have immense amounts of power -- economic and political -- to ensure their continued positions of influence at the expense of the rest of society. This control of the levers of power undermines the whole notion of a democratic society. While some professional athletes and entertainers make obscene amounts of money, this doesn't translate to undue political influence. I believe Brian Jones wrote an article about this not too long ago. You should read it.

  • Mark
    January 06, 2012 - 09:43

    ''But their salaries can easily be explained by supply and demand.'' Isn't the same argument applicable to CEOs? Folks likes Bill Gates and Steve Jobs made billions because the products they supplied were (and continue to be) in high demand. How is that any different than your Sidney Crosby example? If we're to be concerned about disparity in this country (and we should be!) then entertainers, athletes and other overpaid celebrities should be subject to the same scrutiny and criticism as CEOs.