Strengthening Constitutional Self-Government

No Left Turns

We have met the enemy . . .

And he is us. I invoke Walt Kelly’s famous quip to describe the problem of prevailing wages. On the radio earlier today, I heard President Obama noting that one of the reasons why executive compensation has gotten so high is that there has been a great deal of inside dealing. CEOs stock boards with people friendly to them. The compensation committees of those boards look around at comparable companies, see what they’re paying, and add a bit to it, and up goes the spiral from company to company. What’s interesting, is that the same process, or a similar one, is at work in the public sector whenever "prevailing wage" (or Union wage) is demanded. Asking to meet the prevailing wage, or perhaps go a bit above it, is standard across the board in all kinds of salary negotiations in the US. That’s one of the reasons why the mandatory arbitration requirements in the Card-Check legislation are such a concern. They ratchet up wages unreasonably. The numbers, to be sure, are much smaller than CEO pay, but the principle is the same. As Churchill would say, we’re just haggling over price. The CEOs are, on balance, no more, or less, corrupt than other employees.

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