Thursday, April 11, 2013

Echoing Voices from the Past

Political cartoon from the 1890s
"They say this question is so deep that the common people are not fit to decide it.  They say 'leave it to the financiers.'  We have left it to them too long, and while we have been sinking into bankruptcy our financiers have been growing millionaires."  Mary Elizabeth Lease from her speech of 11 August 1896 to a mass meeting at Cooper Union Hall, New York City
When I began my blog, the first post was titled:  I Love History.  I wrote, "It gives us such a road map of achievements to emulate and mistakes to avoid.  When I am discouraged by things happening in the world in which I live, I am heartened by reading history.  If they made such a mess of things--and they often did--and their world survived, then perhaps our own mixed-up world can survive the problems we have created."  (You may read that blog in the archives at 3 January 2012.)
One of the reasons I decided to write a book about Isaac B. Werner, his community, and the People's Party movement of the late 1800s was that I saw so many similarities with our own times.  In particular, they were going through a time of great disparity between average working people and the wealthy corporate tycoons, railroad magnates, and Wall Street speculators.  When you began reading the words quoted at the beginning of this blog, did you initially realize they were spoken over a century ago?
This past week I read through the Forbes list of America's 100 most highly compensated CEOs of 2012, and it reminded me of the complaints made by laborers during the late 1800s, who called themselves "Wage Slaves." Today's wage earners might share some of the same feelings when they compare CEO compensation with their hourly wages.  Forbes reported that the most highly compensated CEO in 2012 was John H. Hammergren, who received 131.19 million dollars, (including salary, bonus,"other" and stock gains)!  Some of the names on the list might be more familiar to you:  Ralph Lauren, who received 66.65 million dollars, and Howard D. Schultz of Starbucks, who received 41.47 million dollars.  (To read the full list of CEO Compensation for 2012 visit
A political cartoon from the 1890s
Contrast those CEO compensation numbers with the current minimum wage standards in the U.S.  An employee earning the minimum wage of $7.25 an hour would make $15,000 a year, which would put him $7,000 below the federally defined poverty line.  The minimum wage for employees who derive part of their income from tips is only $2.13.
A little bit of math will offer the following comparison between Mr. Hammergren's earnings and those of a minimum wage worker.  At $7.25 an hour the weekly wage for a 40 hour work week is $290, but Mr. Hammergren makes $2,522,884.61 a week, although I don't really know how many hours he works.  Assuming a 40 hour work week for Mr. Hammergren, he makes $60,572.11 an hour--more or less.  Of course, Mr. Hammergren's compensation is extraordinary, even among his corporate peers.

In the USA Today article published March 28, 2013, "Back in the high (pay) life again," the authors' observed, "[B]ig raises continue even as many companies are laying off employees."  Even CEO Eleanor Bloxham is quoted as admitting, "The continual disconnect between CEO and worker pay is just creating more of a gulf."  ("Special Report:  CEO Compensation," Matt Krantz and Barbara Hansen, B1-2)  Several news sources published reports on this topic, and rankings of the highest paid executives varied, perhaps because compensation often includes such a variety of "other" benefits, such as use of corporate jets and other "perks", as well as stock options and bonuses.  
In her 1896 speech at Cooper Union Hall, Mrs. Lease deplored such extremes of compensation in a nation which was formed to avoid an aristocracy among its citizens.  She said, "But here in this country we find in place of an aristocracy of royalty an aristocracy of wealth.  Far more dangerous to the race is it than the aristocracy of royalty.  It is the aristocracy of gold that disintegrates society, destroys individuals and has ruined the proudest nations."
A political cartoon from the 1890s
The political cartoons published in the County Capital to which Isaac subscribed and whose editor was a friend illustrate the themes of Mrs. Lease's speech.  The "Golden Empire" stresses the greed of capitalists growing fat by reducing wages to allow workers barely enough to purchase clothing, food, and lodging, often making those purchases at company stores so that their wages were little more than "tickets."  The cartoon with Columbia, as a symbol of the nation, attempting to awaken feelings for the suffering of a poor family in a man clutching his bags of money is an obvious illustration of the disparity in wealth and the difficulty in bridging mutual understanding across the chasm that separates their very different lives and opportunities.  The cartoon showing a group of wealthy Wall Street men sitting on their money is especially reminescent of recent criticism of banks to whom taxpayer money was given in 2007 to avoid a national financial collapse who chose to sit on the loaned assets from taxpayers rather than putting it in circulation to speed the recovery.  The political cartoons I have posted have been particularly popular with visitors in the past, and these three seem to me good examples that we have much in common with the concerns of our ancestors. 
The United States has always been a nation that admires success and that believes in the possibility for anyone to work hard and build a better life for him- or herself.  We do not condemn the successful for the money they have earned through their hard work and clever ideas.  Yet, as these cartoons show, our nation has long struggled with the difficulties of preserving the American dream for everyone without allowing a disparity between the fortunate and the unfortunate to mock the idea of this country as a land of opportunity for all its citizens.


The Blog Fodder said...

People can become reasonably wealthy by hard work and ingenuity. To become very wealthy requires the hard work of others AND what is known by Economists as rent seeking(such as buying politicians, favourable regulations, favourable judgments etc). Surprisingly Adam Smith warned about this in Wealth of Nations, how the wealth of individuals was at constant odds with the wealth of nations.

Lynda Beck Fenwick said...

Dear Blog Fodder, Interestingly, Isaac B. Werner bought "Wealth of Nations" for his personal library, so he would have been aware of Adam Smith's warning.

I don't know why blogspot has dropped my earlier comment and your checked boxes, but I did see them before they were removed. Thank you for your input. This has been a popular post!