A brief return to Corporate Class What constitutes a corporate class? What constitutes a corporate class? What category of the social ladder would they fit? What category of the social ladder would they fit?

Where do they fit in our ladder? When we combine the 2 nd (new money) and 3 rd tier 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” (highly recommended) Of the 39 women among the richest CEOs -- Inheritance is the main reason for their wealth

Corporate 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

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

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 2007, Stratification in the U.S. Source: Kerbo 2007, Stratification in the U.S.

Characteristics of the Corporate Inter-Organizational Leaders (Kerbo, 2007) 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 More often worked their way up to top positions rather than inheriting wealthy family status More often worked their way up to top positions rather than inheriting wealthy family status 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 interlocks (Kerbo 2007)At the center of corporate cliques are big banks – Citi, Bank America, Chase, Chemical, Sallie… These surround themselves with clusters of corporations through interlocks (Kerbo 2007)

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 )

Stock-Voting Positions Held by Other Banks in TopFive Banks Ranked by Assets (Kerbo 2007) 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%

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 last year. 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 last year. House Committee on Oversight and Government Reform House Committee on Oversight and Government Reform Source: Washington Post Source: Washington Post

S&P 500 CEOs S&P 500 CEOs last year averaged $10.5 million, 344 times the pay of typical American workers. last year averaged $10.5 million, 344 times the pay of typical American workers.

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).

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.

Forbes’ survey of the top 20 hedge fund and private equity managers concluded that their combined income for 2007 was 43 percent higher than in “To even make the list,” the magazine wrote, “you needed minimum earnings of $350 million, which is $90 million higher than the year before.” Forbes’ survey of the top 20 hedge fund and private equity managers concluded that their combined income for 2007 was 43 percent higher than in “To even make the list,” the magazine wrote, “you needed minimum earnings of $350 million, which is $90 million higher than the year before.” The magazine 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 magazine 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.

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.

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.

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 30% 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 30% lower than it was in 1979.

Real Value of Minimum Wage (2000 dollars)

Year Actual Wage Adjusted for Inflation n/a n/a In 1979 Minimum wage was $2.90 actual, but $6.27 adjusted In 1979 Minimum wage was $2.90 actual, but $6.27 adjusted Source: Source:

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…. Tax dollars used to compensate for the above Combined with average wages that have not kept up with inflation…..

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) 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 twenty percent of U.S. incomes And the Top 20% earn fifty 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 42% of wealth Top 1 percent own 42% of wealth

In other words….. Top 10% own 72 percent of the wealth Control over 80% of Corporations ******************** Bottom 90% own 28 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.

How about Global Inequality? Richest 2 percent own more than half of the global wealth Richest 2 percent own more than half of the global wealth Bottom 50 percent own almost 1 percent of global wealth Bottom 50 percent own almost 1 percent of global wealth Top 5 percent receive 1/3 of world income Top 5 percent receive 1/3 of world income Poorest 40 percent earn 5 percent of world income Poorest 40 percent earn 5 percent of world income