How do you value a person's work? Does the chief executive officer of a company deserve millions in salary even if his company files for bankruptcy? Is he more valuable to the economy than the men and women who drive trash trucks and keep our neighborhoods from being overrun by rodents?
Does a fellow on a municipal payroll who trims trees, which is dangerous work, deserve to be paid more than a nurse in the psychiatric ward of a public hospital?
Putting a figure on someone's worth has been a hot topic for several decades, fueled at times by efforts to upgrade work categories dominated by women so that they pay as well as jobs done mostly by men that demand no greater skill, education, experience or risk, yet pay more.
Questions of work's worth are going to come up this summer because President Clinton has pledged to push for a higher minimum wage as part of his renewed focus on the domestic front.
The federal minimum wage is now $5.15 an hour, with eight states and the District already requiring employers to pay more than that as a minimum. Under legislation sponsored by Rep. David E. Bonior (D-Mich.) and Sen. Edward M. Kennedy (D-Mass.), the minimum wage would go up 50 cents on Sept. 1 of this year and another 50 cents on Sept. 1, 2000. The increase won't make anyone abandon their lottery fantasies -- but it's something, and the Clinton administration has endorsed it. The last such increase came in September 1997, after years of steady decline in the real value of the minimum wage.
According to a recent analysis by the AFL-CIO, today's minimum wage, adjusted for inflation, is 19 percent below its 1979 level -- or the equivalent of $1.24. Its real value fell by a third from 1979 to 1996.
So who benefited from the 1997 increase? It's a sure bet it had no impact on corporate executives, but it did help those on the low rungs of the wage ladder, such as child care workers and teacher aides, cooks, janitors, maids, clerks, airport security guards. It helped youngsters working at jobs after school, too, but they were not the primary beneficiaries. Seventy-one percent of those whose wages rose were adults age 21 and older, and 40 percent are their families' sole breadwinners.
The minimum wage does not lift a family out of poverty. A minimum-wage job pays $206 for a 40-hour week. A parent in such a job who takes no vacation and works 52 weeks a year makes the princely sum of $10,712 a year. The federal poverty line for a family of three is $12,802; for a family of four, $16,400. Since you are not likely to have generous medical benefits in a minimum-wage job, you better hope your spouse and children don't get sick or develop a Bugs Bunny overbite that cries out for braces.
The AFL-CIO estimated that 11.8 million workers would benefit from the two-stage increase in the Bonior-Kennedy bill. Millions more who are paid just above minimum wage would find their incomes pushed upward. A report from the Economic Policy Institute on the 1997 wage increase found that 20 million workers, or 18 percent of the work force, got an increase in pay when the minimum wage went up.
Working women, in particularly, benefit from a minimum-wage increase. An AFL-CIO study found that about 30 percent of working women may get pay increases when the minimum wage goes up, which is not surprising, because women are concentrated in some of the lowest-paying jobs.
Low pay causes genuine and unnecessary hardship in a country brimming with prosperity. A 1998 study by the U.S. Conference of Mayors found that officials in 80 percent of the cities surveyed cited low-paying jobs as the primary cause of hunger among those seeking food aid.
What makes the situation particularly grotesque is the generosity companies shower on their CEOs.
The AFL-CIO has set up a Web site to spotlight CEO compensation and the relationships that exist between corporate board members and the CEOs whose salaries they set. It found a CEO's brother-in-law sitting on one board, for example, and it is not hard to imagine the falling out that would occur should he be witless enough to turn thumbs down on the CEO's pay increase. "We believe he's completely independent," a company spokesman said of the arrangement. Sure, and they believe in the tooth fairy, too.
The AFL-CIO officials went through hundreds of proxie documents that Standard & Poor's 500 companies file with federal regulators. The labor organization estimated that on average the CEO of a major corporation made 326 times as much as the average American factory worker in 1997.
Compensation for CEOs of major corporations has been growing in leaps and bounds. According to the AFL-CIO, Business Week found that they made on average 42 times as much as factory workers in 1980 and 85 times as much in 1990. More information is available from an AFL-CIO Web site, www.paywatch.org.)
The contrast between the U.S. and European outlook came into sharp relief when Germany's Daimler-Benz acquired the smaller American car producer, Chrysler. Chrysler's chairman was making eight times as much as the CEO of Daimler-Benz. The average CEO in Germany makes 25 times as much as the average person.
The inequity between rich and poor, whether in this country or globally, is one of the most important issues looming over the next century. A strong middle class makes America work and makes democracies work. For the middle class to remain a stable force, it needs a wage that lifts it well above poverty and gives the majority of people a stake in American prosperity.
CEOs are not the only ones who have families to raise.
They just have the money to do it.