I’m going to pick on Congresswoman Ilhan Omar again today, this time, not for her antisemitism, but because clearly she doesn’t understand how corporations work and she wants to destroy them.
Here are a few Tweets that she sent out. There are several more in her feed reiterating this idea.
Millions of workers in the U.S. are struggling just to put food on the table, while McDonald’s CEO makes $21.8 million a year. That’s just wrong.
We need to #RaisetheWage so that no one is the richest country on earth lives in poverty. ✊🏽
— Ilhan Omar (@IlhanMN) February 12, 2019
In fact, just *10 percent* of McDonald’s workers in the U.S. make a living wage. https://t.co/kGqUS3h0zM
— Ilhan Omar (@IlhanMN) February 12, 2019
I took a look at this last Chicago Tribune article.
Public companies for the first time this year must disclose how much more they pay their chief executive than their median employee, a rule born in the wake of the financial crisis and amid a social backlash against rising income inequality.
Many of Illinois’ largest companies debuted their CEO-to-worker pay ratios in recent regulatory filings, and the gaps, clearly, are massive.
Lay it on me Chicago Tribune. How bad is it?
At Northbrook-based Allstate, CEO Tom Wilson’s $18.76 million compensation last year was 230 times higher than the $81,573 earned by the insurance company’s median employee.
Allstate is one of America’s largest insurance companies. It has roughly 43,000 employees, an annual revenue of $38.5 Billion, and $112 Billion in assets.
At Deerfield-based Mondelez, former CEO Irene Rosenfeld, who stepped down in November, earned 402 times more than the snack-maker’s median worker — $17.11 million versus $42,893.
Mondelez has some 83,000 employees, $26 Billion in revenue, and $63 Billion in assets. There is a Mondelez plant in Naperville, near where I used to live. They make cereal there.
And at McDonald’s, CEO Steve Easterbrook’s $21.76 million pay package was 3,101 times the $7,017 paid to the fast-food giant’s median employee, which the company defines as a part-time hourly restaurant crew member in Poland.
McDonald’s has over 37,000 restaurants on six continents, has $22.8 Billion in revenue and $33 Billion in assets.
A good CEO is critical to company function. A bad CEO can sink a company.
A salary of $81,000 isn’t bad for an insurance agent. The responsibilities of an insurance agent, managing individual or business policies is not anywhere near that of managing a company with $112 Billion in assets.
There is a Mondelez plant in Naperville, not far from where I used to live in Aurora. They make cereal there. The people work on an assembly line and put cereal in boxes. Again, not the same level of responsibilities of managing a company with $38.5 Billion in annual revenue.
I have eaten at McDonald’s. I have never been in a McDonald’s that didn’t screw up my order the first time or had a bathroom that inspired confidence. Taking several chicken nuggets out of a warmer tray and putting them in a box, then forgetting to give me the apple juice that goes along with the Happy Meal takes a little less skill than managing the world’s largest restaurant chain.
At the most benign, this attitude reflects the belief that CEO’s are just privileged fat cats who enjoy three martini lunches while everyone else works. This is a position based on ignorance and envy.
The salary of the CEO is just like the salary of all the other workers. It is market driven. No company wants to pay a penny more than it has to, to get the quality of worker it desires.
When you have a glut of people who need a keyboard with pictures and an automatic change dispenser because asking them to count out change is too much of an intellectual challenge for them, they will depress the market wage for that position, until they are replaced by self serve kiosks.
On the other hand, when you have a small supply of people who can manage a multi-national, multi-billion dollar corporation successfully, they are worth a lot.
The first goal of this is clearly to get companies to raise their wages. The problem is the woman behind the counter isn’t worth $15 an hour to give me the wrong meal and then be shitty about fixing it. So she will be replaced with a self serve kiosk and a burger flipping robot.
The next step (you know there will be a next step) is to get companies to lower their CEO salaries. The effect will be to remove the people from the top who know how to run these kinds of companies effectively and American businesses will suffer or choose to offshore.
Really, what this is, is a war on competency. Competent people will always earn what the market determines that person is worth.
If you are a talented surgeon who can heal people that few others can, you are going to command a huge salary.
When the goverment starts attacking high salaries, either through taxes or more directly with hearings like these, what they are saying is that income shouldn’t be a function of competency and the most qualified people shouldn’t be allowed to make more than anybody else.
I wrote a post criticizing Rep. Keith Ellison about this same thing almost a year ago. It seems that Ilhan Omar adopted the same economic idiocy when she took over his Congressional seat.
The difference here is that she is one of these Freshman firebrands who the media love, and could be effective in a war on competency.
First they will come for the CEOs, then they will come for anyone who makes more than the median salary in a particular field.
Just wait until they say it is unfair that the life saving surgeon makes 50 times the salary of the orderly who changes the bed pans.