Transcript: Thom Hartmann: The Big Picture: A Tale of Two Minimum Wages. 1 June '11
There are two minimum wages in America.
There’s one for working men and women that’s roughly seven or eight dollars an hour depending on what state you live in and then there’s one for corporate executives that’s about $11 million a year including stock options and bonuses.
Last week - Blue Shield of California Health Insurance corporation made public the salaries of its ten highest paid executives. Turns out the head honcho - Bruce Bodaken - is bringing home about $4.6 million a year. That doesn't include bonuses or stock options - if it did - Bodaken would probably be much closer to the national average of what top CEOs earn in total compensation - roughly $11 million a year, $220,000 a week, or $44,000 a day.
Can you imagine taking home a paycheck of $44,000 every single day? And most of it at a maximum income tax rate of 15%, less than half the tax rate your janitor could face if he were well paid?
$44,000 a day? $5,500 an hour?
Blue Shield defended the lavish pay by saying - "We offer a competitive compensation package to attract and retain top-quality executives NECESSARY to maintain a high level of performance and service."
As in...they don't have a choice - that's the bare-minimum they can pay out to keep such top quality talent.
Of course - if they decided to pay their executives just a few million dollars less - then they could give little Susie her life-saving kidney transplant. But in today’s economy $11 million only gets you so far - you can buy only so many summerhouses in Italy - only so many Porsches - only so many private golf course memberships - only so many private jets - you basically have to pick money out of the couch cushions to have enough to keep your Olympic size home swimming pool clean.
On the other side of the coin - what does the working person’s minimum wage get them? Turns out…not much.
The organization Wider Opportunities for Women published a new report on the purchasing power of Michigan’s minimum wage - which is $7.40 an hour - and whether or not it can buy the basic needs that a person requires like a roof overhead - food on the table - and clothes to wear.
The report found that a single Michigan resident needs to make more than 12 bucks an hour just to house - clothe - and feed him or herself - 12 bucks an hour.
The minimum wage in Michigan of just $7.40 an hour falls well short of meeting someone needs
Although the health insurance executive on HIS minimum wage makes about 16 bucks every 2 minutes.
But when you throw children into the equation - the picture is even grimmer. A mother with two children needs to make about $24 dollars an hour to meet their basic needs - that’s more than three times higher than minimum wage.
I guess Republicans will argue they just need to move in with mom and dad - or move into a tent in the park.
When I was thinking about the best way to show the difference between these two minimum wages, I originally wanted to visually show stacks of money on my desk - one stack belonging to the working person’s minimum wage - and the other belonging to the corporate executives minimum wage.
I figured I would take a $100 bill and set it on top of a stack of $1 bills to get the point across.
I soon realized that even if I pretended the $1 bills were $100 bill - I would still need to get a hold of 110,000 one dollar bills to get the point across - and the bank across the street - and frankly my bank account - can;t really handle that.
The stack that the average worker earns would only have been a bit over an inch high - but the stack of the earnings of the Health Insurance CEOs would have been over 36 feet high - clear up through a couple floors above us in this building.
I then thought about using these toy blocks to make the point - but the Toys R Us didn’t have 11 million - or even 110,000 - toy blocks either.
So instead - we’re just going with this graphic… And it looks like our graphics engine can’t even illustrate the pay disparity in these two minimum wages.
Of course these two stacks are more than just numbers in pictures - they translate into a lifestyle.
In the case of this stack - it’s a lifestyle that means each and every month - someone who’s trying to raise their kids on minimum wage has to forego dinner - or rent - or electricity - or a new pair of shoes just to get by in America - the richest nation on the planet.
In the case of this stack - it’s a lifestyle that doesn’t have a financial care in the world.
Does this seem right to you?
Looks like the war Ronald Reagan started against the working class 30 years ago is a resounding success today.
But I have an idea to turn the tide - replace the current corporate minimum wage - with a corporate maximum wage law.
I say we cut the pay of corporate executives down to 1980s levels - around $800,000 - and hold it there until the minimum wage for working people in America is raised high enough for everyone to meet their basic life needs.
There's absolutely no reason why one minimum wage requires someone to make the tough choice of paying the electricity bill or paying the car payment - while another minimum wage requires someone to make tough choices over what color their 20th Jaguar should be.
Once everyone gets a slice of pizza - then the millionaires and billionaires can have their second and third helpings.
After all - isn't that what we were taught in kindergarten??
That's The Big Picture.