Bottom Shekel / The wage gap makes asses of us all
It is true that wage gaps are part and parcel of a free market, and some talented people will always earn more. But it's a question of proportion, how much more they earn, and to what degree they merit it.
Danny Goldstein, chairman of Formula Systems, opposes capping executive pay."They've created a new commandment: thou shalt not pay the CEO more than 22 times what the ass at the gate makes," he snorted, adding that only executives seem to be under attack, not soccer or television stars.
He's right, of course: soccer and television stars make insane amounts of money, just as insane as executive pay. So what? Two wrongs don't make a right. It's just more wrong and makes the asses all the more downtrodden.
Asses, or donkeys - Goldstein says he's quoting the bible. We may assume he was referring to the rank and file workers at Israel's public companies, not - heaven forfend - to the executive ranks at these companies, the luminaries, giants of mind and spirit, wonders of evolution, emblems of brilliance, the cream of mankind. As such, the executives at the public companies get their towering executive pay not as a courtesy but as a right. They deserve each and every shekel they get: they are matchless and irreplaceable. All the rest are asses.
Let us not ruin Goldstein's theory with cynical remarks about the lack of correlation between executive pay and corporate performance. Or that many of the highest-paid executives in previous years proved to be exceptionally bad managers. Nor shall we dwell on those shining lights of sagacity, the alpha managers on Wall Street, whose greed brought the world economy to its knees.
We shall not elaborate on how these people, who raked in such high pay irrespective of their value to the business or without linkage to a mechanism of long-term reward (that also factors in the potential for failure ), aren't just asses in our eyes, but jackasses.
We will repeat none of those things. We shall just remind Goldstein of the tremendous damage he's doing to asses. These asses aren't just the rank and file at his own company, but the teachers instructing his children for an average wage of about NIS 12,000 a month, gross.
Social workers caring for the impoverished and aged in exchange for gross pay - after a month's strike - of NIS 13,000 a month are also asses. The social workers just got a 22% raise, and feel cheated. They had expected a lot more.
Doctors are also asses. It's true that their average salary is a higher NIS 30,000, but they feel it's starvation wages not fitting for dignified professionals such as themselves. Therefore, they are striking for a 50% raise and are meanwhile causing tremendous harm to the general public.
All these asses, rightly or wrongly, feel deprived, because they're working for the kind of wage paid in the public sector. Some work day and night; all are graduates. The doctors studied for 12 years, including internships (which is more than most of the executives can boast ). They do holy work. They serve the greater good of Israel. And all are frustrated. Why? Because they're asses. Because their miserable pay makes them asses by definition as they see executives, no better educated than they are, and not doing more important work, taking home enormously more money than they do.
Make no mistake. The latest wave of strikes is driven in no small part by executive pay and the frustration it causes. The brains of big business take home a million shekels a month while the teachers of their children take home that NIS 12,000. Perhaps the executives deserve every shekel they make, but the wage gap hurts.
It is true that wage gaps are part and parcel of a free market, and some talented people will always earn more. But it's a question of proportion, how much more they earn, and to what degree they merit it. When executives take home a fortune just because they can, without merit (the correlation between high pay and corporate performance is weak; there is no penalty for erring; the board has no good reason to agree to pay so much ) - proportion is not maintained.
The result is wage gaps that scream to the skies. The result is a feeling of deprivation and strikes that threaten Israel's very economic growth. The asses are braying, but that isn't stopping the gravy train.