What happens to SB 1372 currently before the California legislature is not important. Its very existence is what’s relevant since it is based on the ratio of CEO to workers’ compensation and as such highlights a reality behind the inequality that we frequently talk about these days. In 1965 says a study by the Economic Policy Institute, CEOs made 20 times what their median employees made. By 2012 the ratio had risen to 273 to 1! Leaving aside corporate culture and its values, can this ratio be spiritually, morally or ethically defensible? Spiritually, ethically and morally all humans are equals, not to speak of legally. And while differences among people are obvious, necessary and unavoidable, it’s difficult to see how they can justify a ratio of 273 to 1. It could easily be argued that this gap is nefarious to the moral fabric, to economic and social mobility, to the general culture and of course to the making of a fairer, sounder society.
SB 1372 proposes to tax corporations with a CEO to worker ratio under a 100 lower and those above higher than the current rate. Its proponents hope for federal legislation along these lines. It’s doubtful it shall pass since the California Chamber of Commerce calls it a job killer, but given that the CEO of CVS Caremark Larry Merlo’s salary last year was $12.1 million or 422 times the median CVS salary of $28,700, it makes a needed point.