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 social ladder would they fit? For Wright they constitute the Capitalist class or America’s Ruling Class For Wright they constitute the Capitalist class or America’s Ruling Class

Where do they fit in our ladder? When we combine the 2 nd (new money) and 3 rd 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 classified as an actual social class? grew out of …… The increasing size of major corporations and their increasing domination of the global markets The increasing size of major corporations and their increasing domination of the global markets The increasing concentration of stock ownership in major corporations, including ownership by other (particularly financial) corporations The increasing concentration of stock ownership in major corporations, including ownership by other (particularly financial) corporations inherited fortunes, extensive stock holdings, and top corporate executives…. Major source of income is profits, interests, and extremely high salaries inherited fortunes, extensive stock holdings, and top corporate executives…. Major source of income is profits, interests, and extremely high salaries

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

Characteristics of the Corporate Inter-Organizational Leaders -- Functions of Interlock Directorates Have more positions on corporate boards Have more positions on corporate boards More likely to be on board of larger corporations More likely to be on board of larger corporations Often represent large banks on corporate boards Often represent large banks on corporate boards More often belong to elite social clubs More often belong to elite social clubs Some worked their way up to top positions rather than inheriting wealthy family status e.g., Bill Gates… others gain access through generational advantage e.g., George W. Bush, Steve Forbes Some worked their way up to top positions rather than inheriting wealthy family status e.g., Bill Gates… others gain access through generational advantage e.g., George W. Bush, Steve Forbes Often represent corporate interests in foundations, universities, and government Often represent corporate interests in foundations, universities, and government

Corporate Class Interlocking Directorates are a major means of communication among the power eliteInterlocking Directorates are a major means of communication among the power elite At the center of corporate cliques are big banks – Citi, Bank America, Chase, Chemical, Sallie… These surround themselves with clusters of corporations through interlocksAt the center of corporate cliques are big banks – Citi, Bank America, Chase, Chemical, Sallie… These surround themselves with clusters of corporations through interlocks

The two darker lines represent double interlocks with Alcoa and Comcast Source:

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

So what? Concentration of Power….. Service on two or three corporate boards not only means more money and prestige… it also results in more power in policy -- those who sit on two or more boards are more likely to be in policy-discussion groups and to receive appointments to government advisory committees (Useem, 1980). Service on two or three corporate boards not only means more money and prestige… it also results in more power in policy -- those who sit on two or more boards are more likely to be in policy-discussion groups and to receive appointments to government advisory committees (Useem, 1980). Thus, becoming a director, and then an interlocking director, can help move a person to the heart of the power structure. This finding recently has been supported by a sophisticated "small world" analysis of the interlocks among corporations, foundations, policy-discussion groups, and cultural organizations (Barnes, 2005). Thus, becoming a director, and then an interlocking director, can help move a person to the heart of the power structure. This finding recently has been supported by a sophisticated "small world" analysis of the interlocks among corporations, foundations, policy-discussion groups, and cultural organizations (Barnes, 2005). Source: Source:

And….. Power to impact policies that benefit the Corporate Class Senate Committee on Governmental Affairs: Senate Committee on Governmental Affairs: 13 of the top 130 corporations had ties with 70 percent of the other 117 corporations via 240 Direct and 5,547 Indirect Interlocking Directorates (indirect = when two or more corporations are tied by their board members through a 3 rd ) 13 of the top 130 corporations had ties with 70 percent of the other 117 corporations via 240 Direct and 5,547 Indirect Interlocking Directorates (indirect = when two or more corporations are tied by their board members through a 3 rd )

Over 70% of assets of the 200,000 Corporations in America are held by 100 of them or.0005% Over 70% of assets of the 200,000 Corporations in America are held by 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 TopFive Banks Ranked by Assets (Kerbo 2010) Rank by Assets Name Stock-Voting Rank Stock 1 Bank of America 1. Morgan Bank 2. Citibank 4. First National Chicago 2.88%2.47%1.08% 2Citibank 1. Morgan Bank 2. First National Boston 3. Harris Trust 3.26%2.65%1.59% 3 Chase Manhattan 1. Rockefeller Family 1.85% 4 Manufacturers Hanover 1. Morgan Bank 2. Hartford National 3. Bankers Trust 3.88%1.09%0.80% 5 Morgan Bank 1. Citibank 2. Chase Manhattan 3. Manufacturers Hanover 4. Bankers Trust 2.63%1.43%1.42%1.10%

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

Put another way, a worker who earned $41,861 (including compensation) made about $400 less last year than what the average large-company CEO made in one day. Put another way, a worker who earned $41,861 (including compensation) made about $400 less last year than what the average large-company CEO made in one day. That assumes 260 days of pay (52 weeks x 5 days a week). That assumes 260 days of pay (52 weeks x 5 days a week).

Several years after the Great Recession….. In 2011 the chief executives of the 500 biggest companies in the U.S. (as measured by a composite ranking of sales, profits, assets and market value) got a collective pay raise of 16% last year, to $5.2 billion. In 2011 the chief executives of the 500 biggest companies in the U.S. (as measured by a composite ranking of sales, profits, assets and market value) got a collective pay raise of 16% last year, to $5.2 billion. Source: ericas-highest-paid-ceos/ Source: ericas-highest-paid-ceos/

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

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

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

The Debate – We are coming out of the recession – why not pay them more…. Pays: CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average percent more than the CEO pay average at S&P 500 firms as a whole. Pays: CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home nearly $12 million on average percent more than the CEO pay average at S&P 500 firms as a whole.

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

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

Profit-Employment Disconnect: The overwhelming majority of the layoff- leading firms — 72 percent The overwhelming majority of the layoff- leading firms — 72 percent — announced their mass layoffs at a time of positive earnings reports. This reflects a broader trend in Great Recession Corporate America: squeezing workers to boost profits and maintain high CEO pay. — announced their mass layoffs at a time of positive earnings reports. This reflects a broader trend in Great Recession Corporate America: squeezing workers to boost profits and maintain high CEO pay.

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

Meanwhile…. What’s happening to American Workers What are your chances of moving up the social mobility ladder? What are your chances of moving up the social mobility ladder?

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

American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 times what their workers made. In 2009, CEOs of major U.S. corporations averaged 263 times the average compensation of American workers. CEOs are clearly not hurting. American workers, by contrast, are taking home less in real weekly wages than they took home in the 1970s. Back in those years, precious few top executives made over 30 times what their workers made. In 2009, CEOs of major U.S. corporations averaged 263 times the average compensation of American workers. CEOs are clearly not hurting. Source: Executive Excess Report 2010 Institute for Policy Research Source: Executive Excess Report 2010 Institute for Policy Research

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

Real Value of Minimum Wage (2010 dollars)

State by State State by State State by State State by State

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

Bad news……. If you were born in 1990 If you were born in 1990 What you could buy with $100 What you could buy with $100 Would cost $ in 2011 Would cost $ in 2011 Adjusted for inflation, the minimum wage was worth $8.54 per hour in 1968, according to calculations by the Economic Policy Institute. The current Federal minimum wage is $7.25 per hour. Adjusted for inflation, the minimum wage was worth $8.54 per hour in 1968, according to calculations by the Economic Policy Institute. The current Federal minimum wage is $7.25 per hour.calculations by the Economic Policy Institutecalculations by the Economic Policy Institute If you were born when I was…. What you could buy with $100, would now cost you $747.67……. If you were born when I was…. What you could buy with $100, would now cost you $747.67…….

The “anxious class” and slowed mobility The value of the minimum wage has not kept up with inflation. When adjusted for inflation, the value of the minimum wage is 26% lower than it was in The value of the minimum wage has not kept up with inflation. When adjusted for inflation, the value of the minimum wage is 26% lower than it was in 1979.

Inflation and Social Mobility in the Past Decade Changes in Cost-of-living and the Minimum Wage Since September 1997 Changes in Cost-of-living and the Minimum Wage Since September 1997 Overall inflation 26% Overall inflation 26% Food 23% Food 23% Housing 29% Housing 29% Medical care 43% Medical care 43% Child care and nursery school 52% Child care and nursery school 52% Educational books and supplies 61% Educational books and supplies 61% Gasoline, unleaded regular 134% Gasoline, unleaded regular 134% Minimum wage 0% Minimum wage 0% Source: Bureau of Labor Statistics Source: Bureau of Labor Statistics Available at Available at

“Other worldly” compensation and high risk ventures by corporation…. Tax dollars used to compensate for the above Combined with average wages that have not kept up with inflation….. Have lead to…..

Income Disparity in the U.S. Average income of top 1 percent equals the top of Mt. Everest (28,028 ft) Average income of top 1 percent equals the top of Mt. Everest (28,028 ft) 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 percent 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 percent Average Family Income 13 feet Average Family Income 13 feet Average Individual income 9 feet Average Individual income 9 feet

Social Mobility????….. Top 1 % Earn 23.5 % of U.S. incomes And the Top 20% earn 72 percent of the incomes of the United States Note: Investment incomes are not taxed at the same rate as incomes…. And many of our nation’s wealthiest earn their keep via investment incomes…….

Wealth Says even more Top 1 percent own 40.2% of wealth Top 1 percent own 40.2% of wealth 42 percent of the Forbes 400 inherited their money

In other words….. Top 10% own 91.9 percent of the wealth Control over 80% of Corporations ******************** Bottom 90% own 8.1 percent Control less than 20 percent of Corporations

Asset Poverty……… The poorest 40% owned 0.2% percent of all national wealth. The bottom 20% had a negative net worth - they owed more than they owned.