“You earned it; you keep it.” Really? You be the judge.

Earnings for most people increase a certain percentage each year. For workers, it’s been about 0.58 percent a year, for CEOs like Paul LePage, it’s been about 6.27 percent, and for bankers like Mitt Romney, it’s been 10 percent or more for the past 50 years.

Fifty years ago, a CEO earned about 20 times the worker. Today, a CEO earns about 320 times more than the worker, while the banker earns 1,800 times more than the worker. That’s what percentages do.

A banker might call these percentage changes “compound interest,” but most people would call it “exponential growth.” Do you really believe today’s CEO is 320 times better than Henry Ford? Or put into smarts: do you believe today’s Nobel Laureate is 320 times smarter than Albert Einstein?

These ratios are not reset by war (like World War II), recession (the Great Recession), or depression (the Great Depression). It’s the total salaries that crash: ratios stay the same. So after recovery, we just pick up where we left off. In LePage’s tax cut, you will get one cent but he will get $3.

Now imagine a fairy world. In each year, a diligent worker earns a $100 bonus. The CEO gets a $10,000 bonus. Salaries for everybody just increase by inflation. After 50 years, the worker got $5,000 dollars and the CEO got $500,000. In the beginning and at the end, the salary ratio remains 20 to one. But, alas, this example is not the real world.

So did they earn it? Should they keep it? Don’t hold your breath that anything will change soon. It’s just the way money works.

Tom Berger

Oakland

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