One fella writes, “I told my boss that three companies were after me and I needed a raise if he wanted me to stay. He asked what three companies and so I told him – the gas, electric, and cable company.”
Well, there is no question that workers today are really feeling it when it comes to job income. According to Bloomberg News, executive salaries are surging while middle-class wages are barely treading water. A report on the CEOs (Chief Executive Officers) of the top 500 companies reveal that they make in a single day almost what it takes their average rank-and-file employees to make in a year. And now there is both a new term (income inequality) and a new measurement (354 to1) for this. (Who has the highest ratio? J. C. Penney. In 2012, the department store chain’s CEO got $53.5 million in pay and benefits while his workers in comparison earned on average $30,000 in the year. That’s an income inequality ratio of 1,795 to 1.)
All this has led to the first national referendum on income inequality. It was held in Switzerland last week. There the “12:1″ proposal was put on the ballot – meaning no CEO could make more than 12 times what the average worker in his or her corporation makes. The Swiss voted it down, by a 60% to 40% margin.
The bottom line? The Bible says, The laborer is worthy of his reward, but I don’t believe that God meant by this – so much for the one and so little for all the others.
The Exception To The Rule
The principle of income inequality may be true for most corporations, but it is not true for all. One exception is Lee Valley Tools. Leonard Lee, the founder and chief executive officer of the woodworking tool giant, practices the 10:1 rule, meaning that his one salary will never be more than ten times that of the average pay of all his workers. This business philosophy reflects his modest roots. Mr. Lee was born in rural Saskatchewan during the Depression era, growing up in a log cabin with no electricity or running water, when farmers helped each other with the threshing and no one locked their doors. He embedded this co-operative approach into the firm he founded in 1978, even as it grew from a mail-order business that distributed stove kits to a large firm with more than $100 million dollars in annual sales. It now produces over 800 types of tools, exports to 20 countries from Japan to South Africa, and has stores across North America. Because of 10:1, Mr. Lee is one of the lowest paid CEOs in all of Canada.