Jim Wellehan: Repairing the damage of income inequality


Income inequality in America is now the highest since the Great Depression; the highest in the developed world. Skewed income and wealth separate our society into “haves” and “have-nots,” and it is nearly impossible for have-not communities to have great schools, sustainable family structures, or opportunities for their children.

Income inequality is passed on from generation to generation, and “born-poor, die-poor” is becoming the American way of life. Nearly 1,600,000 children in America are homeless.

Switzerland, a capitalistic society, recently held an election to limit CEO pay to 12 times the pay of the lowest paid employee. Sadly, it was defeated because of concern that it would drive some firms to leave Switzerland.

In America, 500-to-1 top-to-bottom pay rate differentials are not uncommon. A recent news article on MSNBC indicated that the average CEO pay in the top 350 firms in this country is $14,100,000. At that rate, if the CEO goes to the bathroom four times a day, he makes more money in a week’s bathroom stops than a base worker makes in a year.

We humans can be a greedy group, and the lords always did better than the peasants. But beyond a certain level, it is very destructive, as it destroys the feeling of community and nationhood

The children in wealthier communities have opportunities to get special sports, music and language instruction, have someone home when they get back from school, and are provided with great opportunities to receive an incredibly fine education through graduate school. We maximize what they can contribute to our society, while we minimize the potential contributions of the other children.

In the 1960s, when Honda was starting on its route as a world class car maker, the top-to-bottom pay differential at Honda was 7-to-1. Honda’s history of being a great company began in that sort of sharing way.

It worked, and Japan — a manufacturing powerhouse — has the lowest income inequality of any developed nation.

Some people are smarter than others, or work harder, or are more creative. But it is unimaginable that one person’s skills are worth 500 times another person’s annual compensation.

Change is called for, and Switzerland’s attempt sets an excellent direction.

If there is a 12-to-1 top-to-bottom pay ratio, wouldn’t it be wonderful to have the CEO saying “You know, the folks on the factory floor are doing a great job. They should get a raise.” And that is what he or she will have to say if he or she wants a raise.

Isn’t that a more societally beneficial approach than saying: “We can cut their retirement benefits and have everyone pick up their own health plan. That way we’ll be more profitable and I can get a big bonus, a raise and more valuable stock options.”

It is time to respect and appreciate the many people in this society who work hard to make it a better world — janitors and CEOs both.

Let’s do it in a fair way that keeps us all on the same team and works to provide social harmony, while we provide a world-class education to all our children. Then our country can benefit from the talents of all. Fairness, kindness, sharing, commonality and community are all great things, and they improve the lives of all.

When your mom baked a chocolate cake, your older brother may have wanted the bigger piece on the corner. What would you or your mom have thought and done if he took a piece that was 500 times bigger than yours?

Your mom’s instincts and discipline are what made your family home a good place to eat a chocolate cake.

Let’s all enjoy America’s cake together.

Jim Wellehan is president of Lamey-Wellehan Shoes.