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Business, Politics

Union Elites Throw Stones from Glass Houses

Posted: May 24, 2017 at 4:49 am   /   by

When the AFL-CIO, America’s largest federation of labor unions, recently released its Executive Paywatch report, the goal was to expose the country’s “greedy CEOs.”

The report alleges that the average chief executive officer of a S&P 500 firm earned $13.1 million in total compensation in 2016, while the typical U.S. worker made only $37,632. According to the union, this comes out to “a CEO-to-worker pay ratio of 347-to-1.”

Don’t believe the hype. Numerous fact-checkers—from The Washington Post to the American Enterprise Institute’s Mark Perry—have questioned the math behind the AFL-CIO’s eye-catching figure. Perry rightly points out that the AFL-CIO’s metrics take into account only the highest-paid CEOs from the S&P 500, not the average pay of all chief executives in the United States—a more accurate indicator of executive pay. According to the Department of Labor, the average U.S. “chief executive” earned $194,350 in 2016. That’s a tidy sum, but a far cry from $13.1 million and a 347-to-1 CEO-to-worker pay gap.

Experts at the Annenberg Public Policy Center have found that “when all CEOs are included, the pay disparity is far smaller” than the AFL-CIO leads on. The Washington Post’s Fact Checker reached a similar conclusion, acknowledging that “most chief executives do not work at large companies.” When then-presidential candidate Hillary Clinton repeated the union’s talking points by claiming that “the average CEO makes about 300 times what the average worker makes,” Fact Checker labeled her claim as “completely wrong.”

Perhaps union leadership just wants to change the subject. Despite lambasting corporate elites, hundreds of union officials earn six-figure incomes on their members’ dime. According to a Center for Union Facts analysis of Labor Department filings, at least 192 union presidents made more in gross income than the average CEO in 2016. For instance, Timothy Canoll, president of the Air Line Pilots Association, earned more than $775,000 last year. International Brotherhood of Boilermakers President Newton Jones came close at $756,973, while Laborers’ International Union President Terence O’Sullivan made nearly $718,000 in total compensation. Even AFL-CIO President Richard Trumka, who often criticizes the “greed of corporate CEOs,” took home $294,537 in 2016—far more than the typical CEO.

In 2016, roughly 50 union presidents earned more than $300,000 in total compensation. At least 22 of them made $400,000 or more. Keep in mind that an annual household income of $430,000 lands you firmly in the 1 percent—dreaded company in union America.

And union elites can expect more than a base salary. Take Newton Jones, who heads the Boilermakers union headquartered in Missouri. Out of his $757,000 earnings package, more than $321,000 came in the form of travel and other business disbursements. In one recent year, the Boilermakers spent more than $270,000 at the luxurious Hilton Marco Island hotel in Florida. According to a recent Kansas City Star investigation, the union also “gives cars as gifts to executives when they retire and pays ‘consulting fees’ to officers after retirement.”

The Boilermakers are hardly alone. In 2016, the American Federation of Teachers spent nearly $100,000 on limousine services. Pennsylvania’s Electrical Workers Local 98 spent more than $264,000 on Philadelphia Eagles tickets in one recent year, claiming that the tickets were used “to promote job creation.” The United Auto Workers union takes the cake, providing at least $39 million in dues-funded loans to keep its pristine Black Lake Golf Club in Michigan afloat for union elites. How many production workers book tee times at Black Lake?

The real tragedy here is that employees’ monthly dues payments—still mandatory in many states—continue to fund union leadership’s expensive tastes. Union members often sit idly by as their dues dollars are effectively transferred from collective bargaining to limousine rides and football tickets. It’s no wonder that only 25 percent of current and former union employees approve of today’s union leadership.

Union elites would be better off serving them than throwing stones from glass houses.

NOTE: The above op-ed column was published by Luka Ladan, communications director at the Center for Union Facts.

Richard Berman

Richard Berman is the executive director of the Center for Union Facts, a 501 (c)(3) organization that fights for transparency and accountability in America's labor movement. It is located in Washington, D.C.

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Union Elites Throw Stones from Glass Houses