Fairness for Employees? Harkin Questions Huge Pay Gap between Employees and Executives

WASHINGTON – At a hearing this morning to examine the shrinking American middle class, Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) challenged a Boeing Company executive to justify why his own compensation increased by 34% in one year while the average Boeing employee’s compensation has increased by only 3% in the last twenty years.  To illustrate this trend of growing income inequality in America, Harkin questioned Boeing General Counsel Michael Luttig if it was fair that he received a compensation package of $3.7 million in 2009 while the average employee at their South Carolina plant made $18 an hour.   

Michael Luttig, in an attempt to make light of a serious question and a very serious issue, responded “Mr. Chairman, my compensation is a matter of public record. I have to say, at this very instant, I have the sense that maybe it’s not enough.”  He went on to say “If we could pay [our workers] more, we would, and when we can, we will.”

Watch the exchange here:  http://www.youtube.com/watch?v=3ujFWnkb0RI

The transcript of Harkin’s comments is below:

HARKIN:  Now I want to get to the essence of the middle class here, and what we’re talking about in terms of disparities. In real terms, wages for workers grew 3.78 percent in the last 20 years; CEO pay increased 468%.

“As Executive Vice President and General Counsel, your compensation by Boeing in 2008 was $2,798,962. That was your pay in 2008: $2,798,962. In 2009, one year later, it was $3,743,607 – that’s a 34% jump in your pay, as an executive, in one year. During a recession year. Why shouldn’t employees at Boeing get a 34% increase, Mr. Luttig? What’s going on here? Why shouldn’t employees also have a share of that?

“I just asked you a question: why should executives get these huge increases, and employees are told they can get a 3% increase, or even less. I checked also with the pay in Washington – I guess it’s $26 an hour. That comes to about $52,000 a year. South Carolina, I’m told, average pay’s about $18 an hour, that’s $36,00 a year. Hardly anyone getting wealthy.

“So, Mr. Luttig, your pay went up by 34%, you’re making 3.7 million dollars a year. I don’t begrudge that. I’m just asking about fairness for workers at the Boeing plant. Why shouldn’t they get increases like that, Mr. Luttig?”

###