CEO pay binge in Australia continues while workers’ wages growth remains flat
The headlines in the last week summarised the inherent inadequacy of capitalism for most of us who depend on real wages growth to enhance our material standard of living in economies that are growing. The latest report from the Australian Council of Superannuation Investors released on Thursday (July 17, 2018) – CEO Pay in ASX200 Companies: 2017 – shows how unfair and unsustainable the income distribution is in Australia. Australian CEOs were fully committed to the ‘greed is good’ binge leading up to the GFC along with their peers across the globe. The GFC interrupted that ‘party’, albeit temporarily. As the emergency environment that surrounded the business community during the GFC abated as a result of extensive government support (bailouts, stimulus packages, etc), the managerial class in Australia has returned attention to its on-going ‘national income grab’. The Report shows that in 2017, CEO pay reached its highest level in 17 years and the managerial class enjoyed real growth in pay at a time when the average worker is enduring either flat to negative growth in pay. Further, overall economic growth in Australia is being driven by increased non-government indebtedness as real wages growth (what there is of it) lags well behind productivity growth. And, at the same time, the Federal Government is intent on pursuing an austerity policy stance. All these trends are similar to the dynamics we experienced in the lead-up to the GFC. They are unsustainable. A major shift in income distribution away from capital towards workers has to occur before a sustainable future is achieved.