LaborTalk for January 3, 2011

To Solve Budget Crises, a 10% Pay Cut
For Obama, Congress and Other Officials

By Harry Kelber

While maintaining their own salaries and benefits intact, President Obama, members of Congress and state legislatures, governors, and heads of major agencies have decreed that tens of thousands of working people should be fired or furloughed, suffer wage cuts and loss of benefits, and a freeze of their wages to solve the federal and state budget deficits.

President Obama joined the attack by ordering some 2 million federal employees to take a two-year wage freeze, which, with rising food, transportation and housing costs, amounts to a pay cut. And he did this without prior public discussion and the disruption of union collective bargaining contracts.

Now it’s time for Obama and all public officials to show their concern about budget deficits by taking a 10 percent cut in salaries for one year and a wage freeze for a second one. We propose that Obama show the way by announcing he is cutting his salary and, for starters, proposing that the 100 Senators and 435 members of the House do the same. It should include all pubic officials earning more than $100,000 a year.

Now for the banks, who were largely responsible for creating the crisis. They should be required to pay a 10 percent tax on their earnings since they were bailed out by the government. And everyone on Wall Street, earning a million dollars or more per year, including bonuses, should be asked to give up 10 percent of their salary. They would still have more than enough to live on.

And we should include CEOs that are reporting company profits, and sports superstars who are earning multimillions for playing basketball, football and ice hockey. And let us not forget college presidents, who are earning fabulous salaries.

Let the Wealthy Share the Cost of Budget Deficits

There is no doubt that the country has a pension problem. The total amount that pensions are underfunded is estimated at $3.5 trillion. The business media has aggressively tried to shift the blame for the pension crises onto the nation’s public employees and their unions.

The fact is that for decades many unions put a par† of the wages they won through collective bargaining into their retirement plans. Thousands of them have been fired or furloughed in California, New York, Illinois, Texas and other states.

It is morally proper that the well-to-do should pay a greater share of recovery costs during a national economic crisis than workers who haven’t had a wage increase in years.

* * * * *

This would be an appropriate time for AFL-CIO President Richard Trumka, Secretary-Treasurer Liz Shuler and Executive Vice-President Arlene Holt, who have retained their $200,000 plus salaries throughout the economic crisis, to show some sensitivity toward the millions of union members, who have lost their jobs and their homes, by announcing that they too will join those who are taking a 10 percent salary cut for one year and a pay freeze for another.

This pay cut would be a meaningful and moral step in narrowing the wide gap between the rich and the poor.—Harry Kelber

LaborTalk will be posted here on January 7, 2010 and on our two web sites and on

Our Very Best Wishes to All Workers
and Their Families for a Happy, Healthy
and Rewarding Year 2011

Harry Kelber, Editor
The Labor Educator

“The World of Labor”

will resume publication

on Saturday, January 8