Friday, September 17

Shocking Inequality: Why San Francisco Voted for an “Overpaid Executive Tax” | Executive pay and bonuses

OROn Matt Haney’s way to work at City Hall in San Francisco, lavish homes of some of America’s richest tech billionaires, as well as hundreds of the country’s most desperate people living in street tent camps.

The “shocking and extreme inequality” that he and the other 900,000 residents are forced to navigate every day prompted Haney, a member of the San Francisco Board of Supervisors, the city’s legislative body, to propose a new “executive tax. overpaid “designed to help address the problem.

San Francisco voters overwhelmingly supported a new law It will impose an additional 0.1% tax on companies that pay their CEO more than 100 times the average of their workforce. The surcharge increases by 0.1 percentage points for every factor of 100 that a CEO is paid above the median, up to a maximum of 0.6%.

Many of the largest and most well-known American companies would easily fall into the highest group. For example, Elon Musk, the CEO of Tesla and the world’s third-richest person, received $ 595 million (£ 449 million) last year, almost 10,000 times the company’s median salary of just under $ 60,000. .

Elon Musk was paid $ 595 million last year, nearly 10,000 times Tesla's median salary.
Elon Musk was paid $ 595 million last year, nearly 10,000 times Tesla’s median salary. Photograph: Odd Andersen / AFP / Getty Images

Tim Cook, Apple’s chief executive, received $ 134 million in 2019, more than 2,300 times the company’s median salary of $ 57,600.

At Google’s parent company Alphabet, Sundar Pichai’s $ 86 million was just 350 times the median of $ 246,804. Unlike Tesla and Apple, Alphabet does not operate commercial stores, which lowers the average salary.

Sundar Pichai, CEO of Alphabet and Google, earned 350 times the median salary of his employees.
Sundar Pichai, CEO of Alphabet and Google, earned 350 times the median salary of his employees. Photograph: Tsering Topgyal / AP

Salary levels for American CEOs have increased by an average of 940% since 1978, compared with a 12% increase in salary for workers. according to the thinktank of the Economic Policy Institute.

The new San Francisco tax is estimated to generate an additional $ 60 million to $ 140 million a year, revenue that will be spent on improving the provision of housing and health care for the city’s poorest people. The tax, which will take effect in 2021, will be charged to all companies operating in the city, not just those based there. The pay rate will be calculated by comparing the salary of CEOs to the median of workers in the city, not around the world.

Haney said that while the city desperately needs more money, the tax is also designed to “encourage companies to pay more to those who pay less or reduce the huge pay of their executives.” He hopes the new law will serve as an example for other cities, states and even countries, like the UK, to try to help tackle inequality around the world.

“San Francisco has one of the most extreme inequalities in the world, and many of the best-known companies that grow here have some of the largest gaps between executive pay and worker pay,” Haney said in an interview. on Zoom while walking. to work this week.

Haney, who represents District 6, which includes Tenderloin, Mission Bay, and South of Market, added: “The contrasts are especially stark in my district, where I represent some of the wealthiest parts of San Francisco, and the country, and some of the the poorest areas with a large number of homeless people without access to medical care ”.

Tents pitched by the homeless in San Francisco's Tenderloin district.
Tents pitched by the homeless in San Francisco’s Tenderloin district. Photograph: Shannon Stapleton / Reuters

He said the coronavirus pandemic had exacerbated San Francisco’s inequality problem, which had already created “a city of extreme suffering” that depleted local government resources.

“The healthcare system was already very strained and the pandemic has exposed it even more,” Haney said. “It has shown how severe inequality is, poor people couldn’t afford shelter, and people of color and essential workers endured the heat of the pandemic.

“At the same time, the richest have gotten much richer [from the pandemic] it shows the fundamental flaw in our economic system. A small number of people continue to reap huge benefits at a time when almost everyone else was suffering more than ever.

“The only way to solve inequality in San Francisco is to have high-earners share it,” he said.

“There is a very dangerous imbalance here, people don’t like where we go. We want to live in a city where we and our neighbors are fine, healthy and safe, when you have a city so unequal that it is very difficult to keep everyone healthy and safe.

“It is 0.001% of society that is causing the problem, there has to be an adjustment of accounts or we will see more suffering and poverty and it is a concern for all of us: our health and quality of life. The pandemic has shown us how we are all connected, and when some people cannot take care of themselves, it can put us all at risk. “

Haney said that in the face of state and national government inaction, the city had decided to act on its own. “It is a double objective, to address inequality and bring in new resources that allow us to respond to the greatest emergency,” he said.

Haney hopes that San Francisco can act as a role model for others to follow. Portland, Oregon, introduced a similar but more limited tax in 2018 and is expected to raise about $ 3 million from roughly 150 businesses.

“The overwhelming victory here will lead other cities and states to follow suit,” Haney said.

“San Francisco is a modern version of A Tale of Two Cities wherever you look, we cannot have a nation that becomes that.”

Leave a Reply

Your email address will not be published. Required fields are marked *