Labor & Employment Law

Too Much Money Can Make the Boss Mean

By James Parks

Here?s another reason to do away with runaway CEO pay.  A study shows bloated CEO pay can make the boss mean.

The study examined the corporate behavior of 261 companies and found a close correlation between pay inequality and poor treatment of workers. In companies where CEOs made much more than their average workers, the companies were more likely to underfund pensions or cut corners on health and safety. Often, according to the study, the bosses engaged in a cost-benefit analysis, calculating that a fine would be a cost of doing business, compared with the profits they could make.

 ?You end up basically thinking of those at the bottom as numbers,?? Sreedhari Desai, a Harvard research fellow who co-authored the study, told The Boston Globe columnist Joanna Weiss. ?You feel somehow that they aren?t even worthy of the normal people that you?d meet. They?re disposable.??

Writing about the study last summer for the Campaign for America?s Future, Sam Pizzigati sums it up this way:

The?data and the lab games, in the end, would both generate findings that point to the same conclusion. Wide pay gaps between executives and workers?enhance the sense of power executives feel and cause them to ?objectify lower level employees.?

Or, to put the matter more plainly, ?executives with higher income treat employees more meanly.?

Click here to read the study, ?When Executives Rake in Millions: Meanness in Organizations.?

Full post as published by AFL-CIO NOW BLOG on January 25, 2011 (boomark / email).