Going to Extremes: CEOs vs. Slaves

Recent findings shed new light on the increasingly unequal terrain of American society. Starting at the top executive level: You may have thought, as I did, that the guys in the C-suites operated as a team – or, depending on your point of view, a pack or gang – each getting his fair share of the take. But no, the rising tide in executive pay does not lift all yachts equally. The latest pay gap to worry about is the one between the CEO and his – or very rarely her—third in command.

According to a just- reported study by Carola Frydman of the Massachusetts Institute of Technology and Raven E. Saks at the Federal Reserve, 30-40 years ago, the CEO’s of major companies earned 80 percent more, on average, than the third-highest-paid executives. By the early part of the 21st century, however, the gap CEO and the third in command had ballooned up to 260 percent.

Now take a look at what’s happening at the very bottom of the economic spectrum, where you might have pictured low-wage workers trudging between food banks or mendicants dwelling in cardboard boxes. It turns out, though, that the bottom is a lot lower than that. On May 16, a millionaire couple in a woodsy Long Island suburb was charged with keeping two Indonesian domestics as slaves for five years, during which the women were paid $100 a month, fed very little, forced to sleep on mats on the floor, and subjected to beatings, cigarette burns and other torments.

This is hardly an isolated case (see my book, Global Woman: Nannies, Maids and Sex Workers in the New Economy, co-edited with Arlie Hochschild.) If the new “top” involves pay in the tens or hundreds of millions, a private jet and a few acres of Nantucket, the new bottom is slavery. Some of America’s slaves are captive domestics, like the Indonesian women in Long Island. Others are factory workers, and at least 10,000 are sex slaves lured from their home country to American brothels by promises of respectable jobs. CEOs and slaves: these are the extreme ends of American class polarization. But a parallel kind of splitting is going in many of the professions. Top-ranked college professors, for example, enjoy salaries of several hundred thousand a year, often augmented by consulting fees and earnings from their patents or biotech companies. At the other end of the professoriate, you have adjunct teachers toiling away for about $5000 a semester or less, with no benefits or chance of tenure. There was a story a few years ago about an adjunct who commuted to his classes from a homeless shelter in Manhattan, and adjuncts who moonlight as waitresses or cleaning ladies are legion.

Similarly, the legal profession, which is topped by law firm partners billing hundred of dollars an hour, now has a new proletariat of temp lawyers working for $19-25 an hour in sweatshop conditions. On sites like http://temporaryattorney.blogspot.com/, temp lawyers report working 12 hours a day, six days a week, in crowded basements with inadequate sanitary facilities. According to an article in American Lawyer, a legal temp at a major New York firm reports being “corralled in a windowless basement room littered with dead cockroaches,” where six out of seven exits were blocked.

Contemplating the violent and increasing polarization of American society, one cannot help but think of “dark energy,” the mysterious force that is propelling the galaxies apart from each other one at a speed far greater than can be accounted for by the energy of the original big bang. Cosmic bodies seem to be repelling each other, much as a CEO must look down at his CFO, COO, etc. and think, “They’re getting too close. I’ve got to make more, more, more!”

The difference is that the galaxies don’t need each other, and are free to go their separate ways nonchalantly. But the CEO presumably depends on his fellow executives, just as the star professor relies on adjuncts to do his or her teaching and the law firm partner is enriched by the sweated labor of legal temps. For all we know, some of those CEOs go home to sip their single malts in mahogany walled dens that have been cleaned by domestic slaves.

Why is it so hard for the people at the top to graciously acknowledge their dependency on the labor of others? We need some sort of gravitational force to counter the explosive distancing brought about by greed – before our economy imitates the universe and blows itself to smithereens.

Comments

[Dr. Steph]

I agree with everything you say, but want to make a distinction between those who are choosing to do what they love for low pay (adjuncts and lawyers) and those who are forced into horrible working conditions due to immigration status, lack of education or skills etc.

I have done the adjunct thing for a while and was tired of living near poverty so I stopped. I miss teaching but I don't miss the uncertainty and low income. But I also have a PhD and skills and can find decent employment (I'm still at a University even).

Sure it's not a CEO salary, which IS earned from the labour of many many low-paid people, but it is also not the same as being a sex worker or domestic worker.

Though I also think the opportunities for even the well-educated are shrinking, just more slowly, so we don't notice and get activated to push for change.

[Celeste]

I was just watching something about human trafficking on PBS last night, "Lives for Sale".

I halfway wonder if the creation of a new low is not meant to make the beleagured lower class feel like things could always be worse.

[Millard Fullbore]

Barb: "There was a story a few years ago about an adjunct who commuted to his classes from a homeless shelter in Manhattan, and adjuncts who moonlight as waitresses or cleaning ladies are legion."

Not to mention, more recently, prostitution -- think D.C. Madam.

Celeste: "I halfway wonder if the creation of a new low is not meant to make the beleagured lower class feel like things could always be worse."

Of course it is. And why be so conditional about it? Make that CAN always be worse.

[Monica]

At least, slaves have room at board. It's just the worst abuses, such as severe physical abuse, that are a problem, but they would be reduced if slavery became legal and regulated.

I would actually be in favour of perfectly legal slavery in exchange for things like citizenship or legal resident status after a certain number of years, paying off a huge debt, an education and/or the guarantee of a decent paid job after a certain time, or not being put in prison for some non-violent crime. Regarding criminals, of course some, such as white-collar criminals, are probably not too dangerous to work in a home, and there would be some screening and evaluation, as well as allowing the slave owners to decide whether they are willing to take that particular convict or not after the authorities decide that he or she is probably OK.

If masters are not too bad and feed them relatively well, some slaves would actually prefer that to the alternative, such as eating ramen noodles while worrying about rent. And some would enjoy the family atmosphere, the help provided by benevolent masters, the ability to meet a better class of people and perhaps to get some help or networking, etc. As a matter of fact, of course such things actually existed in the past. If you don't think so, although something like that may have existed even then, don't forget that slavery is not just the kind of slavery that existed in the US or in some other country or during some particular period you may have in mind. This is even more true if slavery includes partial slavery or actual dependency, such as some form of serfdom or employment that is hard to change.

[Kyso K]

Monica, you can't possibly be for real.

[Kevin Carson]

Monica is the new Swift. Her advocacy for slavery/serfdom and for a privileged hereditary aristocracy are just "a modest proposal" updated for a new generation.

Bravo!

[realpc]

I think that, first of all, Barbara E. is exaggerating. The US is still mostly middle class. However she might be correct in assuming that capitalism's natural course is toward increasing inequality. I really don't know.

Let's assume for now that capitalism can't be trusted to work things out reasonably (and that is only an assumption). What would be the cure for run-away inequality? Barbara E. probably advocates government intervention to even things out. Does the government have the wisdom or the power to make things fair? I'm not really convinced it does.

The Great Depression did a good job of leveling things out. Of course, the leveling can't last forever. Some people are luckier, more talented, work harder, etc., and capitalism rewards them. Others are punished for being born to the wrong parents, having sub-optimal genetics, being lazy, mentally ill, etc.

This is what happens in nature, doesn't it? There are no food stamps for wild animals who can't compete.

I am not advocating Social Darwinism, or anything like that. I'm just saying that fixing extreme inequality is much harder than it might seem.

For example, universities compete with each other to get the best professors, which leads to salary inflation. The same thing happens with movie stars, athletes and CEOs. How can you stop this competition?

Yes, adjunct professors get a miserable deal. But that's why no one wants to be an adjunt professor, unless they're retired or have some other source of income. Choosing to make a living as an adjunct professor just isn't smart. Does Barbara E. want to reward the kind of thinking that leads someone into unrewarding work?

When a profession is over-crowded, not everyone who tries will be successful in that profession. What can the government do? Force law firms to pay every lawyer a good salary? Force universities to pay every professor a good salary with benefits?

Those strategies do not work the way you expect. Let's say all professors must be paid well, whatever their level. This results in a mad rush into the field, and only the first ones in benefit. Now you can't get a low-paying adjunct position, even if you want it. The adjunct positions have all been filled by the lucky first-comers.

The same thing often happens with union jobs that pay well. The positions quickly get filled up, and then you have to be a close relative of a member to get in.

[paperpusher666]

Monica, you are referring to indentured servitude, which was reasonably common during colonial days and up to the Civil War. Suppose that you supervise people at some job. They go home at night. If you have indentured servants, that has to be a lot harder because as the master or mistress, you are responsible for their well-being, providing housing and food, and you have to worry about losing your investment in them if they run away, presuming that you paid something for them or for their transportation or clothing that you provided. The initial cost of employing the indentured servants is higher than merely hiring someone.

Perhaps the reason that indentured servitude is no longer a common employment arrangement is that it is cheaper to have people work for wages rather than pay for the servant's living expenses. Another reason is that people might not wish to live under the restrictions that the master or mistress might impose, such as curfew or having to remain unmarried and not pregnant while in their service.

[Monica]

So why is there such outrage when a family is willing to take on a slave? Also, buying slaves was the expensive part, not feeding them. If buying them was not necessary, paying for very basic food and housing would still be cheaper than a living wage, since a living wage includes money for that and at least a little more, plus the master may happen to have the space for the slave without paying extra. It is true that an employer can pay even less than a living wage (for instance, by making the job part-time), but for any employer that is willing to provide full-time work, slavery could well be a viable alternative and provide the opportunity to get more work out of the worker.

Or, in my system, the master would not need to buy the slaves or indentured servants. There would be some advantage for the slave, such as citizenship after many years, but the slave would enter slavery voluntarily, or as an alternative to something worse like prison or starving while their salary is garnished.

Naturally, any restrictions such as a curfew would be just part of the deal. But then, some people, such as prisoners, military personnel or people who have to get several jobs just to get by, may not have more freedom, or time to enjoy their freedom in reality.

Something like that would be a way to start over (or even for the first time, for some people), somewhat similar to military service in the sense that it provides much-needed opportunity but it is also very demanding. Someone who was once a slave would probably become a very reliable and hard-working citizen and free worker.

By the way, some restrictions, like going to sleep early and avoiding pregnancy, would probably be just what the slave himself or herself would want, since the master would be ruthless in making the slave work and illness (unless it's much too serious to be ignored), pregnancy and lack of sleep would just make it harder for the slave to work. Besides, there could be penalties such as five extra years of slavery for each year of pregnancy. The extra time must be enough to discourage anybody who may take a chance or willingly accept a shorter extension.

[Anarcissie]

If we're doing Swift, we could go lower than slavery and create a class of people whose function was to be eaten. You can just see them buzzing among themselves, hoping to be among the lucky ten percent who get promoted to the slave class.

[Monica]

Well, there could be various categories, such as relatively "decent" slavery, so to speak, as domestic servants or even indentured professionals, for instance, and slavery in very bad and/or risky jobs or slavery instead of the death penalty or life in prison, with a chance to be "promoted" to a somewhat better status for hard work and good behaviour. So there could be some "promotion". There is always worse.

[Anarcissie]

I suppose there could be a class of people whose function was to be savagely tortured for the amusement of others. They could hope for promotion to comestible status.

[tony]

Your this article is very good

[knivesfox]

Thank you for your article

[vlorbik]

i'm surprised that
nobody's mentioned the
prison-industrial complex.
slavery's been back in effect
for quite a while now.
they just call it
"the war on drugs".

[Jared Goldberg]

Monica:

You're serious? Holy crap.

[chris]

Barbara wrote:

"By the early part of the 21st century, however, the gap CEO and the third in command had ballooned up to 260 percent."

So what? The statement also begs the question of whether the total compensation was included. Cash payments are one thing. But stock options are another. The gap between the top dog and the other two or three top execs often narrows when risk-free stock-based compensation is included.

[chris]

Sex and slavery always make a great pair. Female college students have made hay exploiting the two for, gee, generations.

Don't we all know women who "work their way through college" either stripping at the Bada Bing Club or prostituting themselves?

If you don't believe it, check out a few books on the subject. Female novelists have created a genre around the extra-curricular activities their pricey educations forced them to undertake.

As for those foreign women lured here with false promises and forced into prostitution, well, that's against the law. It's outrageous to suggest links between people accepting lawful jobs performing legitimate services -- temp lawyers, for one -- and those who are illegally and brutally exploiting vulnerable people.

Meanwhile, hasn't the liberal left attempted to legitimize prostitution? It's easy to argue that prostitution should be legal. It's certainly accepted in Nevada, and common in cities as well as lesser municipalities.

As in other areas of employment, there is a shortage of workers. If there weren't, the demand for foreign women would disappear. Is it because prostitution is a job Americans won't do? Or is demand for services rising?

[realpc]

chris,

It does matter. If capitalism naturally leads to runaway inequality, then it will ultimately destroy freedom.

We should ask whether, as the socialists assume, this is true about capitalism. And then, if it is, we should look for something other than the usual socialist remedies.

Barbara E. would like everyone who graduates with a PhD to be given a fulfilling professor job with good pay and benefits. She doesn't understand that the crummy pay for adjunct professors results from universities churning out an over-supply of PhDs, at least in some fields.

It's like the difference between holistic and non-holistic medicine. The non-holiistic MD gives you a pill to treat the symptom, while the holistic MD tries to find the cause and return the system to a healthy balance.

Socialism is non-holistic and short-sighted.

On the other hand, blind faith in capitilism is, well, blind. The free market is great, but nothing is infallible and nothing that powerful should be trusted blindly.

If wealth tends to snowball then so does power. Wealth and power could, hypothetically, become concentrated to the point that non-wealthy individuals lose their rights.

That's what leftists are afraid of, with good reason. Of course, leftists are not afraid of governments that seize control and become corrupt and tyrannical. But they are afraid of free markets running amock.

We really should be afraid of both.

Our control over the free market is very limited and precarious. Our interventions should be clever and wise, not short-sighted and simple-minded.

Conservatives have their "law of unintended consequences" which progressives apparently have never heard of.

[chris]

real pc, you wrote:

"If wealth tends to snowball then so does power. Wealth and power could, hypothetically, become concentrated to the point that non-wealthy individuals lose their rights."

If you want a countervailing force to blunt too much capitalist power accruing at a single point, the best way to get there is to encourage the emergence of more capitalistic states.

You can be sure the power of "comparative advantage" will move elements of economic power to different states around the globe.

With China and India on the rise, it's laughable to think the financial power of the world is in the hands of a few Americans. Or that it will concentrate in American hands in the future.

Meanwhile, as much as it would interest me to acquire a Ph.d. in English, I know it's not worth the money, unless I expect no monetary return on my investment.

Probably one of the least valuable Ph.d.'s is the doctorate in education. Unfortunately, it is easy to obtain. Most intelligent people making informed guesses could probably demonstrate their possession of the basic knowledge required for the degree.

Let's see. If someone has the drive to earn a Ph.d., the best financial payoff will come from something either business, science or engineering related.

Meanwhile, the country is screaming for competent high school teachers. Demand for science and math teachers is miles beyond the supply of teachers. I believe English teachers are in short supply too.

You wrote:

"On the other hand, blind faith in capitilism is, well, blind. The free market is great, but nothing is infallible and nothing that powerful should be trusted blindly."

Yeah, well, if "nothing is infallible" then there's no reason to think human strategies to avoid unwanted consequences will outperform our acceptance of market forces.

[papaerpusher666]

Monica, describe what you would want in return for working as a slave. State the number of hours of work per week you would be willing to work consistently. Chances are that your desired compensation wouldn't be a subsistence living with no money in hand and just a roof over your head and your meals and clothing.

Or is slavery just good enough for "others"?

[paperpusher666]

Chris, prostitution is legal only in the less populous counties of Nevada, which makes it illegal in Clark (Las Vegas) and Washoe (Reno) counties. I think that the cutoff is a county population of 50,000. There are also distance requirements from schools and other businesses that the brothels must meet.

[realpc]

[if "nothing is infallible" then there's no reason to think human strategies to avoid unwanted consequences will outperform our acceptance of market forces.]

We can't out-smart nature, or free markets, in the long run. But we also don't have to, or are not willing to, accept the sheer ruthlessness of nature or markets.

There are no slums in the wilderness because there is no welfare. There are no mentally ill homeless animals in nature. Anything that can't survive on its own, or with a little help from its social group, quickly dies.

Animals don't have the brains or the thumbs to meddle with nature for their own short-term benefit. If they did, I'm sure they would.

Free markets are, like forces of nature, powerful and efficient. And like forces of nature they can be cruel. So Chris, I think you might try seeing the feelings behind Barbara E.'s criticisms of capitalism.

I disagree with progressives' logic, but there is value in their feelings. Libertarians turn off their compasssion as they worship free markets and individual toughness.

Toughness is good, to a point, but you can't expect human beings to lie down like sheep and get bulldozed by market forces.

[lc2]

A big part of the problem is that we've gotten used to things that used to be luxuries and are now unwilling to give them up.

A partial list of things that we've gotten used to buying w/middle class incomes, which translates into people making unwise employment and debt choices, born of desperation: (desperation to keep up middle-class appearances)

cell phones
fresh produce out of season
tv's
cars
college classes
alcohol
disposable diapers
cosmetics
pc's
stereos, ipods
books
extraneous clothing i.e. more than the basics
travel

... you get the idea. We live in a time of unfathomable levels of consumption. This is a huge part of the problem, one that few of us, least of all me, want to really address. We want too much stuff, and we don't want to feel the pinch in our wallets. We want to support 4 independent lifestyles, complete w/cars, in an average household of four people. It is an unsustainable proposition and we need to get real about it.

[lc2]

Also:

Monica, employers who draw from this "slave pool" who propose don't pay a living wage currently, plus some, as you suggest. That's the whole point: part-time or not, minimum-wage jobs in the vast, vast majority of housing markets do not pay a living wage. So yes, slavery would be far more expensive.

Wal-Mart comes pretty close to slave-master status in other respects however. It likes to lock its employees indoors when they're stocking shelves overnight. Sometimes when people have to punch out at 1 am lest they work more than 36 hours and veer too closely to full-time, they have to twiddle their thumbs till 7 am when the day manager arrives and lets them go home.