Employers should share the wealth
TEXT OF INTERVIEW
Bill Radke: In Washington, the hearings continue into the causes of the financial crisis. Yesterday, bank executives took heat for the way they profited from the mess. A huge chunk of those profits
are about to be handed out to bank employees, and our economics correspondent Chris Farrell says good for them. Good morning, Chris.
Chris Farrell: Good morning.
Radke: So you are just pleased as punch with Goldman Sachs employees raking in all this money?
Farrell: Yes I am. Now before our listeners turn off the radio, I’m making a strong distinction between the profits — which I think are disgusting, because they’ve been made off with the taxpayer — andt he company paying out the money that it’s making to its employees. I have to tell you, I wish more companies would pay out, what, 40 [percent], 50 percent of their revenue to their employees during the good times. Hey, that’d be a good thing.
Radke: But Chris, Americans are seeing bankers of all things and bank employees, after the crisis we’ve been through, those are the last people a lot of citizens want to see doing well.
Farrell: I agree with you Bill, and I agree with those people who are outraged when they’re thinking about the profits and the bailout. But there’s a bigger point here, and it has to do with companies paying out more of the wealth to their employees. And that’s what I think we should take away from the Wall Street culture. I mean, I was doing some research, I was reminded of this article, Daniel Gross, he’s a columnist at Newsweek, he wrote several years ago. And he was looking at the grumbling about how much auto workers were paid. You know, and all these legacy costs. He made a very important point: You know, those legacy costs — we have a good health care plan. We have a good retirement plan. We work in a factory and we’re able to own our own home and live in the middle class. In our society, companies should be paying more of what they make to their employees. I think that’s the bottom line and that’s why I like those bonuses.
Radke: Do you think more profit sharing is the way of the future?
Farrell: In a better world, yes. But in the world that we live in, no. Not with 10 percent unemployment, not with the broader measure of unemployment at 17.3 percent, the marginally attached, not with the rise of the temp worker — no, there is really no incentive for companies to do that. But I really wish that more companies would look at what Goldman is doing, look at what Morgan is doing, and take in the right lesson from, which is share the wealth with the employees.
Radke: Marketplace’s economics correspondnet, Chris Farrell. Thanks, Chris.
Farrell: Thanks a lot.
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