With 8.8% unemployed, fifth highest in the nation, The State of North Carolina just cut off 70,000 of its citizens from long-term unemployment benefits. Along with that heartless action, the state became the first in the nation to forfeit federal long-term benefits ($700M) for its people altogether. The Department of Labor estimates that this action will impact 100,000 more of the jobless by year's end. If that weren't enough, the state is scaling back its own payment program, which will drastically reduce benefits to the eligible. All of this, with strong Chamber of Commerce support, is being done in the name of accelerating the repayment of its federal debt. Yes, and its being done on the backs of the least fortunate. Add to that the lower income and higher sales taxes are still to come. Who do higher sales tax hurt most? Right, those with the least.
As Paul Krugman writes in a piece worth reading, what's happening in North Carolina is being repeated in other states many under Republican — often Tea Party — control. Texas is enacting its own regressive legislation. Both southern states hope to repress voter turnout with Voter ID mandates, something now possible, thanks to last week's Voting Rights Act decision. Oh yes, things have changed.
It is a bit of sadistic irony that on the very day North Carolina's benefit cut off was going into effect, the NY Times was reporting on America's 200 most grossly overpaid (my characterization, not theirs) chief executives of public companies with $1 Billion plus revenues. What Larry Ellison, already a billionaire many times over and the third richest American, has done to merit $96M in 2012 compensation is a mystery to me. But then, the same can be said for virtually everyone on the list, especially in contrast to the average hard working employee in each of their public companies.
Ninth on this years list, at $36.6M is Marissa A. Mayer, Yahoo's new CEO. Mayer's compensation is not unusual for newly recruited chiefs of troubled companies. She is no doubt a very smart and capable executive who played a significant role in Google's success. Nonetheless, her compensation is still outsized; a further symptom of what has gone wrong in our companies, and indeed in our country, resulting in a totally inexplicable gulf between those at the top and virtually everyone else. There is no way to justify ether their compensation or more so the disparity.
Some may find it at least heartening that a woman is among this year's top ten. But lets not break out the champagne. Only eight others — that’s right 9 out of 200, join Mayer. Call it the glass ceiling or gender gap, it all adds up to the fact that fifty percent of the population remains vastly underrepresented, disenfranchised if you will. And that's not all. The top 200 remains almost entirely the domain of white men at a time when the country's demographics have taken a sharp turn in a different direction. American Express's Kenneth I. Chenault ($28 Million) has again made the list and near the top (17th), but you'll have to search hard for other African Americans (McDonald's Donald Thompson, $13.8M, and Merck's Donald Thompson, $11.1M). Ah, is this a great and progressive country or not?
Have we learned anything in wake of the financial meltdown and Great Recession? Quite apparently, we have not. Virtually all of the top bananas at those to-big-to-fail banks made the list. Millions of Americans remain uninsured and everyone is wringing their hands about the mounting costs of healthcare, but twenty CEO's in that category are in the top 200, taking home their millions.
Many of these top earners are ostensibly being rewarded for high, sometimes extraordinary profits, but their companies are only hiring at an anemic pace, if at all. What is it they say, life goes on. Well yes, but hardly in the same way. Those North Carolinians who the same companies are not putting on the payroll will have trouble feeding their families and keeping a roof over their heads. There is a difference between a diet and life style of caviar and humble black beans. The color of the two foods may be that same but that's where the similarities end. Sixty associates (7%) along with a 110 support staff members have been laid off at Weil, Gotshal & Manges, one of the country's largest and most prestigious law firms. Three Hundred partners (average income $2.2 Million) will remain on board though 30 (10%) of them are expected to see some reduction in pay. Don't lose sleep over any of them, because few of them and their intact counterparts will lose sleep over the associates and support people whose futures are now in doubt. A job loss today often has larger, even permanent, consequences — lawyers checking us out at Whole Foods or manning the counter at Starbucks (if they're lucky).
The words "new normal" permeated the Weil story because its cutbacks reflect the problems faced by other mega law firms with bloated staffs and the fees that go along with feeding a large beast. Business is down and fee pushback is the new normal. Indeed, the new normal has become a popular mantra of our times whether with changed economics or the reach afforded to governments by advanced technology to monitor our phone traffic. If we should fear anything, it is latching onto that terminology, giving into the new normal as if there is nothing that can be done. Those 70,000 unemployed in North Carolina soon to be joined by 100,000 more may suck it up and suffer in silence, the new normal. But this disparity between the top 200 (along with their rarified crowd) and the most everyone else can't go on forever. Small protests are underway in Raleigh, the state capital, but are sill made up largely of those who sympathize with rather than are the direct victims of cuts. We aren't seeing Cairo or even Istanbul kind of protests. Yet! As the gulf widens and its obvious inequities continue unabated, this acquiescence and apathy can't last forever. How long do you think it will take the top 200 to get that message? How long will it take the rest of us?