CEO pay surges amid mass death, stagnant wages and soaring inflation
Over the last year and a half, the COVID-19 pandemic has claimed the lives of more than 600,000 people in the United States, the highest death toll in the world. Approximately 400 people continue to die every day.
While the working class suffered its worst year in more than a century, the wealth of the ruling class soared to ever greater heights. The annus horribilis for the masses was an annus mirabilis for the rich. The COVID-19 death chart and wealth chart soared in tandem.
The New York Times published a report on Friday under the headline, “Meager Rewards for Workers, Exceptionally Rich Pay for CEOs.” The Times called 2020 a “blowout year” for executive pay based on a survey of the 200 highest-paid executives carried out by executive compensation consultant Equilar.
Eight CEOs, the highest number on record, each brought in more than $100 million in pay last year. Overall, pay for the 200 top CEOs rose 14.1 percent, compared to just 1.9 percent for the median worker. All told, CEOs were paid 274 times more than the median worker, up from 245 in 2019.
The top paid CEO was Alex Karp of analytics software company Palantir, a major government contractor, who received a payout of $1.1 billion, one of the largest pay packages in history. He was followed by Tony Xu of DoorDash, a food delivery app, who pulled in $414 million. And close behind was Eric Wu of OpenDoor, an online service which flips real estate, who received a compensation of $370 million.
While all three companies reported major losses last year, their lucrative CEO compensation packages were triggered by corporate stock performance and revenues. Despite a sharp decline in March last year as the pandemic began to be felt around the world, the stock market quickly reversed course and has hit record highs. Financial assets have been propped up by the corporate bailout in the CARES Act and the infusion of limitless cash by the Federal Reserve. The Dow Jones has risen by more than 50 percent since its lowest point last year.
After a year and a half of death and devastation, the pandemic profiteers have amassed wealth beyond imagination. The wealth controlled by the world’s billionaires exploded by 60 percent in the first year of the pandemic, rising from $8 trillion to $13.1 trillion.
Amazon CEO and founder Jeff Bezos is approaching a net worth of $200 billion dollars, while Tesla CEO Elon Musk has seen his wealth more than double from $68 billion in September to $151 billion today.
Despite, or rather because of their massive piles of wealth, a recent report by ProPublica found that the top 25 billionaires in the US pay a lower tax rate than the average household. The super-rich paid just 3.4 percent in effective federal income taxes over the five years in which their collective wealth rose by $401 billion.
All of this is made possible by ongoing impoverishment of the population. As measured by the Consumer Price Index (CPI), inflation hit a 13-year high of 5 percent in May, meaning real wages have declined every month for the last year, driven by month-on-month price increases for basic commodities and consumer goods.
During the pandemic, millions were thrown out of work with only the most limited assistance while millions more lost hours and wages. The economic crisis that hit the working class has dwarfed the Great Recession of 2008 and is only comparable to the Great Depression of the 1930s. There were 7.6 million fewer jobs in May than in February 2020, before the pandemic’s impacts were felt in the economy.
Globally, the International Labor Organization (ILO) estimates that 345 million full-time jobs were lost globally due to the pandemic. The ILO notes in its global wage report for 2020 that without subsidies, the loss of wages would have been 6.5 percent. However, government assistance only compensated for 40 percent of losses. Workers all over the world have been set back significantly by the pandemic.
Amidst the mad rush to complete the full reopening of the US economy, with the dropping of all social distancing and masking requirements to push profits and CEO pay even higher into the stratosphere, more contagious and deadly variants of COVID-19 are circulating globally. With less than half of the US population fully vaccinated, conditions are set for a potential resurgence of the pandemic.
The pandemic is a “trigger event” that has exacerbated all the reactionary tendencies of capitalism. The monstrous rise of social inequality in the face of mass death combined with the rise of inflation and declining wages has primed the situation for a powerful offensive by the working class in the United States and internationally.
Already, thousands of workers have gone on strike at Volvo Trucks in Dublin, Virginia and Warrior Met in Brookwood, Alabama in an effort to recoup years of lost wages. Steelworkers at ATI have been on strike for nearly three months, while 650 refinery workers have been locked out by ExxonMobil since May 1. In Sudbury, Canada, 2,600 miners are on strike against plans by Vale Inco to strip benefits from new hires.
The emergence of these militant struggles, which pit workers into ever more direct conflict with the corporatist trade unions, is only an initial expression of the massive social eruptions on the horizon.
If the past year and a half has demonstrated anything, it is that the interests of the vast majority of humanity are incompatible with the existence of a parasitic oligarchy and the social and economic system upon which this oligarchy rests. The combination of mass death and the accumulation of massive wealth demonstrates the necessity of the expropriation of the pandemic profiteers through the mobilization of the working class to take political power and abolish the capitalist system.
The American ruling class “experiments” with eliminating unemployment benefits for millions of workers
Governors in 25 US states have already eliminated or will soon begin eliminating pandemic related supplemental unemployment benefits, depriving some four million jobless workers of $22 billion in additional assistance according to the Century Foundation.
The elimination of the $300 a week federal unemployment benefits began this past Saturday in Mississippi, Missouri, Iowa and Alaska. The other 21 states are set to remove the assistance by July 10. Twenty-one out of the 25 states, including Maryland, Texas and Tennessee, will be ending all pandemic related program, such as Pandemic Unemployment Assistance (for “gig workers”) and the Pandemic Emergency Unemployment Compensation program.
The states taking these drastic actions are led by Republican governors. The policy, however, is bipartisan. Last month, President Joe Biden signaled his support for the ending of benefits by allowing the resumption of work-search related requirements. He also stated his support for letting federal unemployment benefits expire for the entire country on September 6, in less than three months.
This was followed by a statement from White House Press Secretary Jen Psaki on June 4 in which she stated that Republican governors “have every right” to “not accept” the federal benefit, adding, “That’s OK.”
In the capitalist press, the move to eliminate unemployment support for millions of workers and their families has been described as an “experiment.” NBC News declared on June 11: “It’s the beginning of a bold, mass, social and economic experiment to see if turning off federal unemployment benefits early for half the country will prod people in those states back to work.”
This “bold experiment” will mean, in practice, throwing millions of people into poverty and destitution while facilitating the further spread of the coronavirus pandemic.
Take, for example, Mississippi, where less than 29 percent of the population has been fully vaccinated and where roughly 70,000 unemployed workers were cut off from unemployment payments Saturday. Nearly 15 percent of adults in Mississippi surveyed by the US Census Bureau last month reported “sometimes or often” not having enough food to eat in the last seven days. In addition, nearly 37 percent of adults said it has been “somewhat or very difficult” to pay for usual household expenses in the last week.
The conditions in Mississippi are repeated throughout the country. The slashing of federal benefits will be catastrophic for jobless workers and their families, many of whom are unable to find work for health reasons, lack of child care or livable wages.
There are two, interrelated motivations driving the cutoff of unemployment benefits.
First, there is the imperative of the ruling class to get workers back on the job, even as the pandemic continues to claim hundreds of lives every day and dangerous new strains, such as the Delta variant, are spreading rapidly. The ruling class, with the Biden administration at its head, has proclaimed the pandemic “over.”
Supplemental federal unemployment benefits of $600 a week were included in the CARES Act, which was passed in late March 2020. The temporary assistance provided to those devastated by the economic impact of the pandemic was intended as a stopgap measure and a cover for the act’s main purpose: the multitrillion bailout of Wall Street.
Once this massive handout to the rich became law, the demands for workers to get back on the job began, coupled with bipartisan denunciations of the $600-a-week subsidy for creating a “disincentive” to work. The program was allowed to expire in July 2020 and was later replaced under Trump by a temporary program paying half as much, $300 a week. The $300 a week supplement was again extended in March of this year, under Biden, providing benefits through September.
The unanimous agreement within the ruling class that all benefits must come to an end coincides with the Biden administration’s campaign to remove all remaining restrictions on the spread of the virus.
The decision by the Centers for Disease Control and Prevention to eliminate mask mandates and reduced social distancing guidelines last month has been followed by the release of the Labor Department’s workplace safety guidelines that only apply to health care facilities. The rest of the working class will be left defenseless at workplaces that will not be obligated by law to enact basic safety measures, such as mandatory mask-wearing, social distancing or requirements to inform workers when they may have been exposed to the virus.
Second, the ruling class is concerned that the relative shortage of labor in some industries is contributing to rising wages. “The Fed could be facing a jobs headache in its inflation fight,” wrote CNBC last week. “The longer it takes to get people back to work,” it declared, “the more employers will have to pay.”
CNBC quotes Ian Shepherdson, chief economist at Pantheon Macroeconomics: “Unfortunately, we see good reasons to think that labor participation might not return quickly to its pre-Covid level. Whatever is happening here, the Fed needs large numbers of these people to return to the labor force in the fall.”
Behind the coded language is a ruthless class logic. The ruling class wants to create pressure for lower wages by forcing millions of workers to accept poverty-level jobs, under dangerous conditions, by cutting off unemployment benefits.
As for inflation, the ruling class is not concerned with “inflation” in general, but with demands by workers for increased wages in line with soaring costs of consumer goods. This would cut into corporate profits.
Over the past year, there has been a massive inflation in prices of nearly every financial asset, driven by the limitless infusion of money from the Federal Reserve into the stock markets. This has produced a corresponding growth in the wealth of the oligarchy, with the wealth of global billionaires skyrocketing from $8 trillion to $13.1 trillion. Just the increase in wealth for the oligarchy during this period is 227 times more than the cost of the federal unemployment benefits that are being cut off.
While there are daily articles bemoaning the fact that some jobless workers are able to survive on the meager benefits provided, no one in the capitalist press is suggesting that the spigot to Wall Street be shut off. This is an “experiment” that they are not interested in carrying out.
The ruling class’s “experiment” with its homicidal herd immunity policy has led to the deaths of more than 600,000 people in the US. Now, the cutoff of unemployment assistance will mean social devastation for millions. In both cases the reality of capitalism and the consequences of the subordination of society to the interests of the financial oligarchy is exposed.
The cutoff of unemployment benefits will fuel mounting opposition in the working class. The ongoing strikes of workers at Volvo in Virginia, ATI steelworkers in Pennsylvania and Massachusetts nurses are initial expressions of a developing explosion. These struggles must be expanded and taken out of the hands of the corporatist trade unions, which have worked systematically for decades to suppress working class opposition to the policies of the ruling elite.
The fight against the cutoff of unemployment benefits, against herd immunity and against exploitation must be connected to a revolutionary movement of the working class, in the US and internationally, to expropriate the oligarchs, establish public ownership of the giant banks and corporations, and abolish the capitalist system.
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