These may be nightmarish times for many Americans — particularly many middle-class Americans — but one segment of America is doing better and better: the rich, in particular executives, the Washington Post reports:
It was the 1970s, and the chief executive of a leading U.S. dairy company, Kenneth J. Douglas, lived the good life. He earned the equivalent of about $1 million today. He and his family moved from a three-bedroom home to a four-bedroom home, about a half-mile away, in River Forest, Ill., an upscale Chicago suburb. He joined a country club. The company gave him a Cadillac. The money was good enough, in fact, that he sometimes turned down raises. He said making too much was bad for morale.
Forty years later, the trappings at the top of Dean Foods, as at most U.S. big companies, are more lavish. The current chief executive, Gregg L. Engles, averages 10 times as much in compensation as Douglas did, or about $10 million in a typical year. He owns a $6 million home in an elite suburb of Dallas and 64 acres near Vail, Colo., an area he frequently visits. He belongs to as many as four golf clubs at a time — two in Texas and two in Colorado. While Douglas’s office sat on the second floor of a milk distribution center, Engles’s stylish new headquarters occupies the top nine floors of a 41-story Dallas office tower. When Engles leaves town, he takes the company’s $10 million Challenger 604 jet, which is largely dedicated to his needs, both business and personal.
The evolution of executive grandeur — from very comfortable to jet-setting — reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.
For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent. But economists had little idea who these people were. How many were Wall street financiers? Sports stars? Entrepreneurs? Economists could only speculate, and debates over what is fair stalled.
Now a mounting body of economic research indicates that the rise in pay for company executives is a critical feature in the widening income gap.
The largest single chunk of the highest-income earners, it turns out, are executives and other managers in firms, according to a landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T. Heim. These are not just executives from Wall Street, either, but from companies in even relatively mundane fields such as the milk business.
Go to the link to read the details.
And so the saga of America’s reorganizing economy continues: continued abundance and opulance at the top, more suffering than ever at the bottom — and a middle class sagging lower and lower in a time when safety nets seem weaker and weaker.
Here in San Diego, those of us who worked on the San Diego Union-Tribune see an example of this process — coupled with the agony many editors and reporters who dedicated their lives to print journalism are seeing in this new era: news of yet more layoffs on San Diego’s slimmed down newspaper once owned by the Copley family. That means more middle-class employees — this time journalists — out of jobs they had counted on and enthusiastically held:
About 35 newsroom employees were laid off at The San Diego Union-Tribune on Thursday, the seventh round of job cuts in the last four years and the first under the newspaper’s new editor.
The layoffs, part of a planned reorganization, included familiar bylines: nationally syndicated columnist Ruben Navarrette and veteran reporters such as Anne Krueger (East County), Jeff Ristine (Just Fix It), Leslie Berestein (the U.S.-Mexico border), Michael Burge (North County) and John Marelius (politics).
It continues the slimming of the newspaper, which since late 2006 has cut more than half its staff to combat sagging advertising revenues.
The difference this time: The changes are being articulated as part of a new, refocused vision for the newspaper. The Union-Tribune is simultaneously hiring, recruiting new leaders and offering entry-level reporting jobs. Some reporters laid off Thursday have the option of taking one of those jobs — dubbed a junior staff writer, which pays about $35,000 annually — or a six months’ salary severance.
In other words: to slash costs, people are being laid off but can still work there if they work at a salary far lower than what they had before.
In a note to readers, Editor Jeff Light described the reorganization as the beginning of the newspaper’s changes.
“The benefits will not be immediately apparent,” he wrote. “But by summer’s end, you will see a different U-T both in print and online.”
Light could be correct. Rebooting the paper (which has already shed much of its old Copley Press identity and increasingly looks more like the Orange County Register) could entail an improved feel if its scare resources are used correctly.
On the other hand, newspaper companies were notorious for announcing when they killed their sister evening newspapers that by golly the new paper would include the best of both papers and was a way to combine resources and create a better product. But, in the end, in most instances where this occurred it was clear later what really happened: a corporation just executed a less profitable evening newspaper, and combined some of the staff. The new papers seldom looked like a new product or were greatly improved.
And the same can be the case here.
A longer layoff list in this article contains many people who I worked with during my years on the paper — years with the late J.D. Alexander who was managing editor was notorious for hopping on a plane the second a big newspaper even hiccupped to try and snatch up talented reporters and editors to make the San Diego Union a paper he hoped would evolve into a kind of Los Angeles Times or Washington Post of San Diego. Those days are long gone.
And those being given the polite boot include some enormously talented people — people who cared about facts, their readers, getting it right and for the organization for which they worked for so long.
And so the shake up goes — with those at the top getting the results of a shakeup that batters the middle class in many more industries than the newspaper industry. To many it is the end of if not the American dream, their personal dreams. Unless they are managers…