Income inequality is at immense levels, despite how worker productivity is at record highs. People all around the world struggle against poverty as they make meager wages, and the sickening part is that often their value per hour in terms of productivity is far higher than the wages that they’re payed. In terms of work or wage slavery at big corporations especially, what people are not rightfully payed then tends to go towards a small number of obscenely rich individuals, like CEOs, who more often than not then use the money they’ve received to perpetuate the corrupt cycle of concentrating wealth into too few hands. This is a cycle and system that of course leads to many great problems.
While many Americans are facing a “frightening retirement reality,” 100 CEOs are looking at “colossal nest eggs” and can look forward to monthly retirement checks of over $250,000 for the rest of their lives.
The Institute for Policy Studies (IPS) puts a spotlight on this massive savings gap in its new report (pdf), “A Tale of Two Retirements.”
“While slashing jobs and benefits for ordinary workers, CEOs of large companies have been feathering their own nests,” stated Sarah Anderson, report co-author and director of the IPS Global Economy Project. “It’s no wonder so many American workers are concerned about whether their golden years will be tarnished by financial stress.”
In fact, these 100 CEOs have retirement funds that total $4.7 billion. That’s as much as the retirement savings of the 41 percent of U.S. families with the smallest nest eggsthat’s 116 million people. The report also notes that 37 percent of U.S. families have no retirement wealth at all.
Why this retirement divide? Anderson and report co-author Scott Klinger write: “This is not the result of executives working harder or investing more wisely. Instead, this gap is one more example of rule rigging in favor of the 1 percent.”
To wit: pension rules that allow CEOs to put unlimited funds into tax-deferred plans, the erosion of traditional pensions, and a tax code loophole that allows for so-called “performance-based” pay.
Apart from eliminating those rules and loopholes to narrow the divide, social security should be expanded by requiring the wealthiest to pay on all their earned income; safeguarding public pensions from attack, supporting universal retirement funds, and increasing unionization as leverage for retirement benefits.
President-elect Donald Trump could make the problem worse, the report states, if he cuts the U.S. top marginal tax rate from the current 39.6 percent to 33 percent. That would save CEOs $196 million when they pay the IRS their taxes on their “special unlimited deferred compensation plans.”
The new IPS report comes on the heels of an analysis by Quartz finding that Trump’s 17 cabinet-level pics have more wealth than one-third of U.S. households combined.