My Plan to Stop Corporate Abuses
The Wall Street Journal
The basic bargain of America -- that everyone should have a chance to work hard and build a better future -- is falling apart. Families are working longer hours, but skyrocketing education and health-care costs, the foreclosure crisis and stagnant incomes have made it harder for working Americans to provide a better future for their children.
Not everyone in America is struggling. Investors on Wall Street took home a record-setting $38 billion in bonuses this past year, even after losing millions in the credit meltdown.
In 1960, the average CEO made 41 times what the average worker made. But in 2005, the average CEO made over 400 times the average worker's salary. The share of corporate profits going to CEO pay has doubled since the 1990s. Meanwhile, the value of the minimum wage has plummeted 30% since 1979.
Don't get me wrong -- it is a good thing that some Americans are doing well. The son of working class parents, I have been blessed with extraordinary success in my own life and now want for no material thing. The problem is that the successes of our economy are no longer shared. Forty percent of all economic growth over the past 20 years has gone to the top 1% of American families.
The success of our own economy demands that we uphold our country's values: fair reward for work and opportunity for all. To meet these goals, we must renew America's basic bargain with the middle class and remove the stranglehold that entrenched corporate interests have on Washington.
The first thing we need to do is to make affordable, high-quality health care a part of the social compact. Not only are health-care costs putting a huge strain on American families and our competitiveness in the global economy, but a system that leaves 47 million Americans without health care is a moral disgrace. As president, universal health care will be my number one domestic priority.
Second, we also need to adapt retirement savings to the modern work environment. In the past, it was common for people to stay with the same company their entire career, and so it made sense for pensions to be connected to employers. Today, the average worker will probably hold jobs with multiple companies.
As president, I will create a new universal retirement account requiring every business to automatically enroll its workers in at least one plan: a traditional pension, a 401(k) or an IRA. Workers will be able to choose to have their contributions deducted automatically from their paychecks, and they will be able to carry these accounts with them from job to job.
We can't allow fundamentally healthy companies to go into bankruptcy just to avoid keeping their promises to employees, or to emerge from bankruptcy with millions for executives and nothing for workers. As president, I will ensure that corporations honor the pension promises they've made to workers, by giving workers a claim for lost pensions, just like lost wages.
Third, our companies should be run for the benefit of workers and shareholders as well as insiders. Today, too many companies in America are putting far too much of their earnings into excessive CEO and executive pay, when this money could be going to increased worker salaries, better benefits and investments in plants and equipment.
As president, I will immediately cap untaxed deferred compensation for executives. I will also give shareholders new rights and responsibilities so that they can call shareholder meetings, remove directors who aren't acting responsibly, and have a say on executive pay.
Globalization, technology and demographic change have transformed our economy. Corporations have adapted, but our basic bargain with America's workers has not. We are living in a 21st-century economy, but are asking our workers to compete with a 20th-century set of tools.
In order to fulfill our obligation to future generations of Americas, we must restore balance between America's corporations and America's working families. Only then will we be able to guarantee that anyone who is willing to work hard and do the right thing has the opportunity to share in our nation's prosperity.