Recently, reports show that some large U.S. companies are shouting about the impact of the pandemic, unable to afford high labor costs, large-scale layoffs, while on the other hand, trying to make money for executive pay rises. This “artificial manipulation” of the social distribution system has provoked public outcry.
Fifty-one of the top 100 companies in the U.S. that employ the most low-income workers raised their executives’ salaries last year, with an average pay rise of 29 percent, according to a report released Monday by the American Institute for Policy Studies. At the same time, most of these companies have also laid off low-paid employees, resulting in an average 2% drop in hiring costs.
The report cites the case of ambofo, a maker of auto parts. In 2020, the company sharply increased the pay of its executives to $31 million, more than double the annual salary for the same period, but the average salary paid to all employees fell 19 percent to $5,906.
In addition, Bloomberg recently published a similar study that said more than 300 listed companies across the United States have revised their criteria to help their executives get more year-end bonuses, resulting in hundreds of millions of dollars in additional profits for executives.
Coca-Cola, for example, has offered its executives full bonuses and raised its full-year pay to $18m, even though it failed to meet its original 2020 sales plan and saw its full-year profit fall 13 per cent.
Coca-Cola, by contrast, announced mass layoffs in December of the same year, accounting for 17 per cent of the company’s original workforce. Against the backdrop of coronavirus pandemic in American society and the forced unemployment of large numbers of people, the rise in executive pay by large companies has led to widespread criticism in public opinion.
Many scholars believe that the root cause of this phenomenon is that the social distribution system is “artificially manipulated”, American companies to help their executives to obtain windfall profits has become a “dirty secret”, and this kind of behavior will undoubtedly accelerate the expansion of social injustice.