Starting at the top – Who Rules America? A corporate class? A corporate class? What category of the social ladder would they fit? What category of the.

Starting at the top – Who Rules America?Starting at the top – Who Rules America?

A corporate class?A corporate class? What category of the social What category of the social

ladder would they fit?ladder would they fit? For Wright they constitute the For Wright they constitute the

Capitalist class or America’s Capitalist class or America’s Ruling ClassRuling Class

Where do they fit in our ladder?Where do they fit in our ladder?

When we combine the 2nd (new money)

and 3rd tier – we get the One Percent

Approximately 14.5 percent – leaning closer to the second tier with incomes Beginning at 750,000

Note: the first tier are “Old Money”Such as seen in the film “”Born Rich”(and The One Percent)

Worth mentioning….Of the 39 women among the richest CEOs -- Inheritance is the main reason for their wealth

So How Did We Come To Have a Corporate class that is So How Did We Come To Have a Corporate class that is classified as an actual social class?classified as an actual social class?

grew out of …… grew out of ……

The increasing size of major corporations and their The increasing size of major corporations and their increasing domination of the global marketsincreasing domination of the global markets

The increasing concentration of stock ownership in The increasing concentration of stock ownership in major corporations, including ownership by other major corporations, including ownership by other (particularly financial) corporations(particularly financial) corporations

inherited fortunes, extensive stock holdings, and top inherited fortunes, extensive stock holdings, and top corporate executives…. Major source of income is corporate executives…. Major source of income is profits, interests, and extremely high salariesprofits, interests, and extremely high salaries

The growing network of interlocking The growing network of interlocking directorates that link top corporate directorates that link top corporate personnel and foster interests and personnel and foster interests and loyalties that transcend specific loyalties that transcend specific corporationscorporations

Characteristics of the Corporate Inter-Organizational Characteristics of the Corporate Inter-Organizational Leaders -- Functions of Interlock DirectoratesLeaders -- Functions of Interlock Directorates

Have more positions on corporate boardsHave more positions on corporate boards

More likely to be on board of larger corporationsMore likely to be on board of larger corporations

Often represent large banks on corporate boardsOften represent large banks on corporate boards

More often belong to elite social clubsMore often belong to elite social clubs

Some worked their way up to top positions rather than inheriting wealthy Some worked their way up to top positions rather than inheriting wealthy family status e.g., Bill Gates… others gain access through generational family status e.g., Bill Gates… others gain access through generational advantage e.g., George W. Bush, Steve Forbes advantage e.g., George W. Bush, Steve Forbes

Often represent corporate interests in foundations, universities, and Often represent corporate interests in foundations, universities, and government government

Corporate ClassCorporate Class

• Interlocking Directorates are a major Interlocking Directorates are a major means of communication among the means of communication among the power elitepower elite

• At the center of corporate cliques are At the center of corporate cliques are big banks – Citi, Bank America, Chase, big banks – Citi, Bank America, Chase, Chemical, Sallie… These surround Chemical, Sallie… These surround themselves with clusters of corporations themselves with clusters of corporations through interlocks through interlocks

The two darker lines represent double interlocks with Alcoa and ComcastThe two darker lines represent double interlocks with Alcoa and Comcast

Source: http://sociology.ucsc.edu/whorulesamerica/power/corporate_community.html

We also can determine the interlocks that the 153 We also can determine the interlocks that the 153 directors of these 25 companies create with still directors of these 25 companies create with still other companies. According to other companies. According to TheCorporateLibrary.com, they are also directors TheCorporateLibrary.com, they are also directors at an additional 214 corporations. Citigroup is at an additional 214 corporations. Citigroup is but one example, but it reveals why researchers but one example, but it reveals why researchers claim there is one big corporate community or claim there is one big corporate community or corporate class based on interlocking corporate class based on interlocking directorates.directorates.

So what? So what? Concentration of Power…..Concentration of Power…..

Service on two or three corporate boards not only means Service on two or three corporate boards not only means more money and prestige… it also results in more power in more money and prestige… it also results in more power in policy -- those who sit on two or more boards are more policy -- those who sit on two or more boards are more likely to be in policy-discussion groups and to receive likely to be in policy-discussion groups and to receive appointments to government advisory committees (Useem, appointments to government advisory committees (Useem, 1980). 1980).

Thus, becoming a director, and then an interlocking Thus, becoming a director, and then an interlocking director, can help move a person to the heart of the power director, can help move a person to the heart of the power structure. This finding recently has been supported by a structure. This finding recently has been supported by a sophisticated "small world" analysis of the interlocks among sophisticated "small world" analysis of the interlocks among corporations, foundations, policy-discussion groups, and corporations, foundations, policy-discussion groups, and cultural organizations (Barnes, 2005).cultural organizations (Barnes, 2005).

Source: Source: http://sociology.ucsc.edu/whorulesamerica/power/corporate_community.htmlhttp://sociology.ucsc.edu/whorulesamerica/power/corporate_community.html

And…..And…..Power to impact policies that benefit the Power to impact policies that benefit the

Corporate Class Corporate Class

Senate Committee on Governmental Senate Committee on Governmental Affairs: Affairs:

13 of the top 130 corporations had 13 of the top 130 corporations had ties with 70 percent of the other 117 ties with 70 percent of the other 117 corporations via 240 Direct and corporations via 240 Direct and 5,547 Indirect Interlocking 5,547 Indirect Interlocking Directorates (indirect = when two or Directorates (indirect = when two or more corporations are tied by their more corporations are tied by their board members through a 3board members through a 3rdrd))

Over 70% of assets of the 200,000 Over 70% of assets of the 200,000 Corporations in America are held by Corporations in America are held by 100 of them or .0005%......100 of them or .0005%......

Source: Kerbo 2010, Stratification in the U.S. Source: Kerbo 2010, Stratification in the U.S.

It’s a “small world” after all…..It’s a “small world” after all…..

Stock-Voting Positions Held by Other Banks in Stock-Voting Positions Held by Other Banks in TopFive Banks Ranked by Assets (Kerbo 2010)TopFive Banks Ranked by Assets (Kerbo 2010)

Rank by AssetsRank by Assets NameName Stock-Voting RankStock-Voting Rank Stock Stock

11 Bank of AmericaBank of America 1. Morgan Bank1. Morgan Bank

2. Citibank2. Citibank

4. First National Chicago4. First National Chicago

2.88%2.88%

2.47%2.47%

1.08%1.08%

22 CitibankCitibank 1. Morgan Bank1. Morgan Bank

2. First National Boston2. First National Boston

3. Harris Trust3. Harris Trust

3.26%3.26%

2.65%2.65%

1.59%1.59%

33 Chase ManhattanChase Manhattan 1. Rockefeller Family1. Rockefeller Family 1.85%1.85%

44 Manufacturers Manufacturers HanoverHanover

1. Morgan Bank1. Morgan Bank

2. Hartford National2. Hartford National

3. Bankers Trust3. Bankers Trust

3.88%3.88%

1.09%1.09%

0.80%0.80%

55 Morgan BankMorgan Bank 1. Citibank1. Citibank

2. Chase Manhattan2. Chase Manhattan

3. Manufacturers Hanover3. Manufacturers Hanover

4. Bankers Trust4. Bankers Trust

2.63%2.63%

1.43%1.43%

1.42%1.42%

1.10%1.10%

Given the recent economy Given the recent economy

CEOs are surely taking a hit, right?CEOs are surely taking a hit, right?

House Committee on Oversight and Government Reform, noted that before the infusion, the , noted that before the infusion, the banks had spent or allocated $108 billion banks had spent or allocated $108 billion on employee compensation and bonuses on employee compensation and bonuses for the first nine months of 2008, nearly for the first nine months of 2008, nearly the same amount as 2007. the same amount as 2007.

Source: Washington PostSource: Washington Post

Put another way, a worker who Put another way, a worker who earned $41,861 (including earned $41,861 (including compensation) made about $400 less compensation) made about $400 less last year than what the average last year than what the average large-company CEO made in one large-company CEO made in one day. day.

That assumes 260 days of pay (52 That assumes 260 days of pay (52 weeks x 5 days a week).weeks x 5 days a week).

Several years after the Great Several years after the Great Recession…..Recession…..

In 2011 the chief executives of the In 2011 the chief executives of the 500 biggest companies in the U.S. 500 biggest companies in the U.S. (as measured by a composite (as measured by a composite ranking of sales, profits, assets and ranking of sales, profits, assets and market value) got a collective pay market value) got a collective pay raise of 16% last year, to $5.2 billion. raise of 16% last year, to $5.2 billion.

Source:http://www.forbes.com/sites/scottdecarlo/2012/04/04/Source:http://www.forbes.com/sites/scottdecarlo/2012/04/04/americas-highest-paid-ceos/americas-highest-paid-ceos/

This compares with a 3% pay raise This compares with a 3% pay raise for the average American worker. for the average American worker. The total averages out to $10.5 The total averages out to $10.5 million apiece. million apiece.

Compensation levels for private Compensation levels for private investment fund managers soared investment fund managers soared even further out into the pay even further out into the pay stratosphere. Last year, the top 50 stratosphere. Last year, the top 50 hedge and private equity fund hedge and private equity fund managers averaged $588 million managers averaged $588 million each, more than 19,000 times as each, more than 19,000 times as much as typical U.S.workers earned.much as typical U.S.workers earned.

Source: ForbesSource: Forbes

ForbesForbes’ survey reported that hedge funds ’ survey reported that hedge funds increased their assets by 14 percent to $2.2 increased their assets by 14 percent to $2.2 trillion, while private equity funds raised a record trillion, while private equity funds raised a record $300 billion to reach $2 trillion in assets.$300 billion to reach $2 trillion in assets.

The Debate – We are coming out of the recession The Debate – We are coming out of the recession – why not pay them more….– why not pay them more….

Pays: CEOs of the 50 firms that have Pays: CEOs of the 50 firms that have laid off the most workers since the laid off the most workers since the onset of theonset of the economic crisis took economic crisis took home nearly $12 million on average home nearly $12 million on average -- 42 percent more than the CEO pay -- 42 percent more than the CEO pay average at S&P 500 firms as a whole.average at S&P 500 firms as a whole.

• • Fred Hassan of Schering-Plough, by far the Fred Hassan of Schering-Plough, by far the highest-paid layoff leader, last year pocketed highest-paid layoff leader, last year pocketed nearly $50 million. Hassan received a $33 million nearly $50 million. Hassan received a $33 million getaway gift when his firm merged with Merck, getaway gift when his firm merged with Merck, while 16,000 workers were receiving pink slips. while 16,000 workers were receiving pink slips.

Ranking second on the layoff leader list, Ranking second on the layoff leader list, William Weldon of Johnson & Johnson took William Weldon of Johnson & Johnson took home $25.6 million, more than three times home $25.6 million, more than three times as much as the S&P 500 CEO average, at a as much as the S&P 500 CEO average, at a time when his firm was slashing 9,000 jobs time when his firm was slashing 9,000 jobs and facing charges of drug quality control and facing charges of drug quality control violations.violations.

Profit-Employment Disconnect:Profit-Employment Disconnect:

The overwhelming majority of the layoff-The overwhelming majority of the layoff-leading firms — 72 percentleading firms — 72 percent

— — announced their mass layoffs at a time announced their mass layoffs at a time of positive earnings reports. This reflects a of positive earnings reports. This reflects a broader trend in Great Recession broader trend in Great Recession Corporate America: squeezing workers to Corporate America: squeezing workers to boost profits and maintain high CEO pay.boost profits and maintain high CEO pay.

Five of the 50 top layoff leaders owe their good Five of the 50 top layoff leaders owe their good fortune directly to major taxpayer bailouts of the fortune directly to major taxpayer bailouts of the financial sector. Of these, American Express CEO financial sector. Of these, American Express CEO Kenneth Chenault took home the highest pay, Kenneth Chenault took home the highest pay, $16.8 million, a sum that included a $5 million $16.8 million, a sum that included a $5 million cash bonus. American Express has laid off 4,000 cash bonus. American Express has laid off 4,000 employees since receiving $3.39 billion in TARP employees since receiving $3.39 billion in TARP funding.funding.

Meanwhile…. What’s happening to Meanwhile…. What’s happening to American WorkersAmerican Workers

What are your chances of moving up What are your chances of moving up the social mobility ladder? the social mobility ladder?

Wage inequalityWage inequality

The past five years have seen an The past five years have seen an explosion of income disparity in the explosion of income disparity in the U.S. - Of all industrialized nations, U.S. - Of all industrialized nations, the U.S. has the greatest gap the U.S. has the greatest gap between the wealthiest and poorest between the wealthiest and poorest members of society.members of society.

American workers, by contrast, are taking home less in real American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. Back in weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 those years, precious few top executives made over 30 times what their workers made. In 2009, CEOs of major U.S. times what their workers made. In 2009, CEOs of major U.S. corporations averaged 263 times the average corporations averaged 263 times the average compensation of American workers. CEOs are clearly not compensation of American workers. CEOs are clearly not hurting.hurting.

Source: Executive Excess Report 2010 Institute for Policy ResearchSource: Executive Excess Report 2010 Institute for Policy Research

Wage InequalityWage Inequality

……..has been increasing, in part, ..has been increasing, in part, because of the declining real value of because of the declining real value of the minimum wage. the minimum wage.

Real Value of Minimum Wage Real Value of Minimum Wage (2010 dollars)(2010 dollars)

2013 - State by State

Good News……Good News……

The value of the minimum wage has The value of the minimum wage has risen in the last two years, following a risen in the last two years, following a three-year government effort to boost three-year government effort to boost the lowest allowable hourly wage in the lowest allowable hourly wage in the United States. The final stage, the United States. The final stage, which took effect in July of 2009, , brought the minimum wage up nearly brought the minimum wage up nearly 11 percent to its current rate. 11 percent to its current rate. BUT……BUT……

Bad news…….Bad news…….

If you were born in 1990If you were born in 1990 What you could buy with $100 What you could buy with $100 Would cost $169.33 in 2011Would cost $169.33 in 2011

Adjusted for inflation, the minimum wage was worth $8.54 per Adjusted for inflation, the minimum wage was worth $8.54 per hour in 1968, according to hour in 1968, according to calculations by the Economic Policy Institute. The current Federal . The current Federal minimum wage is $7.25 per hour.minimum wage is $7.25 per hour.

If you were born when I was…. What you could buy with $100, If you were born when I was…. What you could buy with $100, would now cost you $747.67…….would now cost you $747.67…….

The “anxious class” The “anxious class” and slowed mobilityand slowed mobility

The value of the minimum wage has The value of the minimum wage has not kept up with inflation. When not kept up with inflation. When adjusted for inflation, the value of adjusted for inflation, the value of the minimum wage is 26% lower the minimum wage is 26% lower than it was in 1979.than it was in 1979.

Inflation and Social Mobility in the Past DecadeInflation and Social Mobility in the Past Decade

Changes in Cost-of-living and the Minimum Wage Since Changes in Cost-of-living and the Minimum Wage Since September 1997September 1997

Overall inflation         Overall inflation          26% 26% Food          Food          23% 23% HousingHousing 29% 29% Medical care         Medical care          43% 43% Child care and nursery school         Child care and nursery school          52% 52% Educational books and suppliesEducational books and supplies 61% 61% Gasoline, unleaded regular        Gasoline, unleaded regular        134%134% Minimum wage            Minimum wage            0% 0% Source: Bureau of Labor StatisticsSource: Bureau of Labor Statistics Available at http://www.cbpp.org/cms/?fa=view&id=635Available at http://www.cbpp.org/cms/?fa=view&id=635

““Other worldly” compensation and high risk Other worldly” compensation and high risk ventures by corporation….ventures by corporation….

Tax dollars used to compensate for the Tax dollars used to compensate for the aboveabove

Combined with average wages that have not Combined with average wages that have not kept up with inflation…..kept up with inflation…..

Have lead to…..Have lead to…..

Income Disparity in the U.S. Income Disparity in the U.S.

Average income of top 1 percent Average income of top 1 percent equals the top of Mt. Everest equals the top of Mt. Everest

(28,028 ft)(28,028 ft) In the last decade, top one-fifth of families saw their incomes In the last decade, top one-fifth of families saw their incomes

increase by 40 percent. While 60 percent saw a decrease of 7.5 increase by 40 percent. While 60 percent saw a decrease of 7.5 percentpercent

Average Family Income 13 feetAverage Family Income 13 feet

Average Individual income 9 feetAverage Individual income 9 feet

Social Mobility????…..Social Mobility????…..

Top 1 % Top 1 %

Earn 23.5 % of U.S. incomesEarn 23.5 % of U.S. incomes

And the Top 20% And the Top 20%

earn 72 percent of the incomes of the United earn 72 percent of the incomes of the United StatesStates

Note:Note:

Investment incomes are not taxed at the Investment incomes are not taxed at the same rate as incomes…. And many of our same rate as incomes…. And many of our

nation’s wealthiest earn their keep via nation’s wealthiest earn their keep via investment incomes…….investment incomes…….

Wealth Says even moreWealth Says even more

Top 1 percent own 40.2% of wealthTop 1 percent own 40.2% of wealth

42 percent of the Forbes 400 inherited their money

In other words…..In other words…..

Top 10% own 91.9 percent of the Top 10% own 91.9 percent of the wealthwealth

Control over 80% of CorporationsControl over 80% of Corporations

****************************************

Bottom 90% own 8.1 percentBottom 90% own 8.1 percent

Control less than 20 percent of Control less than 20 percent of CorporationsCorporations

Asset Poverty………Asset Poverty………

The poorest 40% owned 0.2% The poorest 40% owned 0.2% percent of all national wealth.percent of all national wealth.

The bottom 20% had a negative net The bottom 20% had a negative net worth - they owed more than they worth - they owed more than they owned.owned.