Out of balance

by | Nov 17, 2013 | Economy, Editor's Blog, Income Inequality

The lead stories in the News & Observer today highlight inequalities in compensation for public employees. One story exposes inflated salaries for managers and public executives in municipal governments. The other introduces a Wake County court clerk who has to work multiple jobs just to feed her family.

While the managers may be overpaid and the clerk is certainly underpaid, these stories are just more examples of a society out of balance. The inflated pay pales in comparison to salaries and bonuses for executives in the private sector and wages have been flat for workers for more than a decade. And, all the while, the wealth of the nation is becoming increasingly concentrated.

We’ve reached a point where decision makers and executives believe they deserve more than they are worth. Boards believe that if they don’t offer inflated salaries they will lose the best and brightest to the competition. The public sector argues that they need to pay more to keep their employees from fleeing to the private sector.

At the same time, little consideration is given to workers because, in the case of the private sector, the companies threaten to go overseas if wages are too high. In the public sector, employees are the victims of the 30-year trend to perpetually lower taxes on corporations and the wealthy in order to keep businesses in the state.

The biggest economic threat to our country is not China or India. It’s the increasing income inequality. We need boards of companies to reel in their executive compensation and we need a more progressive tax structure that discourages obscene salaries while increasing revenue to better pay our public employees. It’s time to get our country, and our state, back in balance.


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