Corporation Pushes Six-Year Pay Freeze On Workers While Making Record Profits, Paying CEO $17 Million
July 26th, 2012 | Pat Garofalo
Back in June, ThinkProgress noted that the manufacturing giant Caterpillar was seeking major concessions during contract negotiations with striking workers, even as it was making billions in profits and giving its CEO a 60 percent pay boost. The New York Times’ Steven Greenhouse added more details today, noting that the company wants to implement a six-year pay freeze and a pension freeze, at a time when it is making record profits:
Despite earning a record $4.9 billion profit last year and projecting even better results for 2012, the company is insisting on a six-year wage freeze and a pension freeze for most of the 780 production workers at its factory here. Caterpillar says it needs to keep its labor costs down to ensure its future competitiveness. [...]
Caterpillar, which has significantly raised its executives’ compensation because of its strong profits, defended its demands, saying many unionized workers were paid well above market rates.
“A company that earned a record $4.9 billion in 2011 and $1.586 billion in the first quarter of this year should be willing to help the workers who made those profits for them,” said Timothy O’Brien, president of Machinists Local Lodge 851. “Caterpillar believes in helping the very rich, but what they’re doing would help eliminate the middle class.” Several labor experts told the Times that Caterpillar is a pioneer in tough labor negotiations meant to drive down workers’ wages.
Last year, Caterpillar’s CEO made nearly $17 million in total compensation. At the moment in the U.S., the typical worker would have to work 244 years in order to earn what the average CEO makes in one year.
This blog originally appeared in Think Progress on July 23, 2012. Reprinted with permission.
About the Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.