Sunday, December 05, 2010

Undercover Bosses Exposed

The TV reality show Undercover Boss features a business executive fumbling his way through a much lower-echelon job. The message tends to be redemptive: As the suit in question gets to know a few underlings and explores the company from a worm's-eye level, he inevitably emerges a better, more knowledgeable person. The basic theme of the show is that, beyond the perks and the big office, there really isn't that much separating people on the bottom and the top of a company.

All very good television but needless to say , it does not extend to their pay-cheques. The average CEO in 2009 made 263 times as much as the average worker in his or her company, which means that these business leaders made more money on their first day of work than their average workers made all year. Walmart CEO Michael Duke -- who brings home $35 million per year -- makes more in an hour than an average new Walmart employee makes in a year.

GSI Commerce CEO Michael G. Rubin, who appeared in the first season of the show, brought home more than $2.3 million in 2009. By comparison, the average customer service representative at his company makes $10.16 per hour, or just over $20,000 per year. Rubin's fumbling enthusiasm as a customer service rep was fun to watch, but a certain pathos sets in when one realizes the patient co-worker who tutored the CEO through his mistakes brings home less than 1% of his boss's yearly wage.

The ratio between Rubin and his lowest-paid workers is about average. With stock options included, Chris McCann, the president of 1-800-Flowers , makes $1,311,031, or about 100 times the salary of a customer service rep at his company. The same goes for Great Wolf Lodge , where the average call center employee makes about 1.1% of the $1.7 million that goes to CEO Kimberly K. Schaefer. And Michael White, CEO of DirecTV , brought home about $1.5 million in 2009, 100 times the average salary of a DirecTV customer service representative.

For example, Lawrence O'Donnell's contract at Waste Management included a host of sweet perks, including annual bonuses of up to 120% of his yearly salary, stock benefits, four weeks of paid vacation, a hefty car allowance, country club memberships, and thousands of dollars in financial planning services. Even beyond his impressive paycheck -- and golden parachute -- O'Donnell's compensation package paints a picture of an executive who lives in a world far-removed from Waste Management's rank-and-file. CEOs often make more than their workers -- even when they stop working. For example, when O'Donnell left the company earlier this year, he took home a severance package of $1.6 million, almost 50 times the yearly salary of the average garbage truck driver at his company.

At Chiquita , the massive fruit company, with a $7.6 million paycheck, CEO Fernando Aguirre ranked as Undercover Boss's highest-paid executive. While it's difficult to determine the salaries of the unskilled migrant workers that he worked alongside, a higher-echelon production manager job at the company pays $56,000 per year, or 0.7% of Aguirre's salary. But that's only half the story. The bananas that have made Chiquita famous aren't grown in the U.S. Rather, they are produced in Latin America, where Chiquita's business practices are notorious. In 2004, workers in Honduras demanded a 75% wage increase from $4.91 to $8.60 per day. While the cost of living in Latin America is significantly lower than in the U.S., Chiquita's wages are still not enough to support its workers. As Human Rights Watch noted in 2002, many families have to put their children to work to put food on the table. At Chiquita, the report noted, kids were paid $3.50 per day, or less than one-8,000th of Aguirre's salary. In other words, Aguirre makes more money in 14 minutes than an 8-year-old banana picker makes in a year.

Academics from Harvard, Utah and Rice universities claimed that "higher income inequality between executives and ordinary workers results in executives perceiving themselves as all-powerful...leading them to maltreat rank and file workers."
According to the authors, archival data and laboratory experimentation have shown that high incomes, combined with distance between the execs and their employees, lead to the impression that workers are "dispensable objects not worthy of human dignity."


1 comment:

aberfoyle said...

Under cover boss,what toss pot tele.Exploiter employer freindly and patronisionly so.See the boss, share in the angnst of a worker stuggling to keep up with washing the dishes,see the boss share in the workers struggle to survive.See the boss,give back to the workers,see the boss using the workers talent to promote their profit,see the boss give a grant to the workers favoured charity ,see the boss give them status in their profit system.

See the boss.