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#578 - 1997 Snapshots, Part 1, 24-Dec-1997

Executive salaries in the U.S. increased much faster than corporate
revenues and corporate profits during the period 1980-1995, according
to tax data reported by the NEW YORK TIMES.[1] In inflation-adjusted
dollars, corporate revenues rose 129.5% during the 15-year period,
while taxable corporate profits rose 127%. Executive pay during the
period rose 182%. "They have all this diaphanous [insubstantial, vague]
language about performance and all these committee reports on how pay
was determined, but the simple truth is that executives are setting
their own pay," says Robert Monks of Lens, Inc., an investment fund.

Actually, tax data understate both the actual rise in executive pay,
and the higher rate at which it has risen compared to corporate
revenues, profits, and taxes, the TIMES reported. This occurs because
most executives are given "deferred stock options" as part of their
annual pay, and these deferred options are not taxable until the
executive "exercises" the option, which may occur years or decades
later (usually after retirement). Thus today's tax records do not
accurately reflect today's executive compensation.

For example, Roberto C. Goizueta, chief executive of Coca-Cola (who
died recently), had more than $1 billion in deferred accounts,
according to the federal Securities and Exchange Commission, which he
received as compensation over the past 17 years, thus averaging $58.8
million in deferred compensation each year for 17 years. (To add
perspective here: Mr. Goizueta's $1 billion could have served a
different purpose --it could have provided 1500 good jobs, each paying
$39,200 per year for 17 years.)

* * *

In the U.S., between 1972 and 1995, real wages for a full-time worker
declined 19% in inflation-adjusted dollars.[2] In 1996, income for men
with full-time jobs fell another 0.9%.[3]

* * *

Occupational illnesses killed an estimated 60,300 workers and made
862,200 workers sick in the U.S. in 1992 (the latest year for which
figures are available), according to a study published in ARCHIVES OF
INTERNAL MEDICINE in July.[4] On-the-job accidents killed 6,500 workers
and injured 13.2 million others that year. There is no reason to
believe that 1992 was an unusual year.

Occupational injuries cost $145 billion, and job-related illnesses cost
an estimated $26 billion for a grand total of $171 billion in 1992.
These cost estimates are likely to be low because they do not include
costs of pain and suffering, or costs of in-home care provided by
family members. Furthermore, the researchers conducting the study
believe they undercounted the actual numbers of workers injured, made
sick, and killed by their jobs.

This was the first study that had ever tried to tally the costs of on-
the-job injuries, illnesses and deaths.

By this reckoning, the costs of job-related harms greatly exceed those
of AIDS or Alzheimer's disease, and are comparable (or even somewhat
exceed) the costs of the better-known major killers, heart disease and
cancer. The main difference between occupational harms and the better-
known major killers is that the public has been made aware of cancer
and heart disease by media and government attention, whereas
occupational illnesses, injuries, and deaths remain underreported,
poorly studied, and largely ignored by governments, corporations, and
the public.

* * *

A new psychological disorder called "road rage" is partly responsible
for 28,000 highway deaths each year in the U.S., according to Ricardo
Martinez, a former emergency room surgeon who now heads the National
Highway Traffic Safety Administration.[5] About 42,000 people are
killed each year in highway accidents in the U.S., so "road rage" plays
a role in 2 out of every 3 such deaths. Road rage includes all forms of
aggressive driving such as tailgating, weaving through busy lanes,
passing on the righthand side, honking, gesturing, or screaming at
other drivers, and occasionally shooting a gun.

Dr. Martinez says the problem has two sources: a 35% increase in
traffic during the past decade with only a 1% increase in new roads;
and an increase in the "me first" philosophy among Americans during the
past decade.

According to a study by the American Automobile Association Foundation
for Traffic Safety, "violent aggressive driving" increased 7% each year
during the period 1990 to 1996.

* * *

Crime rates have dropped each year for the past five years in the U.S.,
but the prison and jail populations have increased 7% each year since
1990, reaching a record-breaking total of 1.7 million in 1996.[6] The
cost of prisons and jails is $30 billion per year, or $17,650 per
prisoner per year.

How can crimes go down and inmate populations rise? "The change in the
number of inmates tells us more about our feelings about crime and
criminals" and about changes in sentencing laws, than it does about
crime rates, says Franklin Zimrung, director of the Earl Warren Legal
Institute at University of California at Berkeley.

For example, North and South Dakota are similar in their social,
economic and racial characteristics and they have similar crime rates.
However, North Dakota incarcerates 90 of every 100,000 citizens while
South Dakota imprisons 279 per 100,000.)

Federal crime statistics do not include drug offenses because there is
assumed to be no victim, and drug offenses are not expected to be
reported to the police. Nevertheless, drug offenses are putting
enormous numbers of people in prison --those arrested for drugs jumped
27% between 1990 and 1995. More than half the increase in inmates
during the past 15 years is accounted for by drug offenses. At least
25% of new inmates today have never committed another crime besides a
drug offense.

But not just anyone is going to jail. Users of crack cocaine make up
the bulk of those imprisoned for drug use. Crack is a poor person's
drug; powder cocaine is a recreation of the rich. Congress and 14
states have passed laws making penalties for crack up to 100 times as
great as penalties for powder cocaine. As a result, African-Americans
are much more likely to go to jail, and for longer periods, than
whites. In 1993 African-Americans were seven times as likely to be
incarcerated as whites. An estimated 1471 African-Americans per 100,000
African-American citizens vs. 207 whites per 100,000 white citizens
were imprisoned at the end of 1993.[7]

California is setting the pace for the nation in imprisoning its
citizens. Like Florida, California now spends more, in total, on
prisons than it does on higher education. The California college system
was once hailed as the world's best public university system, but in
the last 20 years, California has built only one new college. Instead,
it has built 21 new prisons. The state now spends $6,000 per year for
each college student, but $34,000 per year for each prison inmate. In
recent years, the California college system has lost 10,000 employees,
including many faculty, while 10,000 new prison guards have been hired.

* * *

Only one percent of American children between the ages of 2 and 19 eat
a diet that includes proper amounts of all the food groups recommended
by the federal government, according to a telephone survey of the diets
of 3307 children conducted during 1989-1991. Even the diet of the top
1% exceeds federal recommendations for fat content. The results
appeared in PEDIATRICS in September.[8]

Federal guidelines say children should eat each day: 6 to 11 servings
of grain; 3 to 5 servings of vegetables; 2 to 4 servings of fruit; 2 to
3 servings of dairy products; and 5 to 7 ounces of meat.

Sixteen percent of children eat diets that do not meet any of the
federal guidelines.

Only 30% of children meet federal recommendations for fruits, grains,
meat, and dairy; 36% meet the recommendations for vegetables.

Federal guidelines say no more than 10% of a child's calories should
come from fat and sugar. According to the survey, the average American
child receives 40% of calories from fat and sugar.

White children came closer to meeting the federal guidelines than did
African-American or Hispanic children.

* * *

Pharmaceutical companies have discovered a new market for
antidepressant drugs: children.[9] In 1996, nearly 600,000 children in
the U.S. took antidepressant prescription drugs (Prozac, Paxil and
Zoloft). Prozac prescriptions for children aged 13 to 18 increased 47%
in 1996. The NEW YORK TIMES reports that the adult market for such
drugs is "saturated" --Prozac sales to adults fell 5% in 1996 and 2.5%
in 1995. As the TIMES put it succinctly, "Companies are looking for
customers." The drugs are not authorized for use in children (and their
use in children has been studied little), but neither are they
specifically prohibited, so it is legal for physicians to prescribe
them. An estimated 4 million American children --or 5% --suffer from
depression. The teenage suicide rate has been rising for a decade and
now equals that of adults.

* * *

Surely these facts and trends are all connected. It is the job of all
of us, as citizens of a self-governing republic, to see the
connections, discern the common root causes, create comprehensive
visions of a brighter future for everyone, then work like hell to make
them real. Organize, organize! Happy New Year.

--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)


[1] David Cay Johnston, "Executive Pay Increases at a Much Faster Rate
Than Corporate Revenues and Profits," NEW YORK TIMES September 2, 1997,
pg. D4.

[2] Ravi Batra, THE GREAT AMERICAN DECEPTION (New York: Wiley, 1996
[ISBN 0-471-16556-5]), Table 2.1, pg. 10, citing ECONOMIC REPORT OF THE
PRESIDENT (Washington, D.C.: The Council of Economic Advisors, 1996),
pg. 330.

[3] Steven A. Holmes, "New Reports Say Minorities Benefit in Fiscal
Recovery," NEW YORK TIMES September 30, 1997, pgs. A1, A24.

[4] J.P. Leigh and others, "Occupational Injury and Illness in the
United States. Estimates of Costs, Morbidity and Mortality," ARCHIVES
OF INTERNAL MEDICINE Vol. 157, No. 14 (July 28, 1997), pgs. 1557-1568.
And see Associated Press, "Job-Related Illness Cost Put at $171 Billion
in '92," NEW YORK TIMES July 28, 1997, pg. A9.

[5] Matthew L. Wald, "Temper Cited as Cause of 28,000 Road Deaths a
Year," NEW YORK TIMES July 18, 1997, pg. A14. And see: Lesley Hazleton,
"Fear Is Increasing on the Roads, But That May Not Be a Bad Thing," NEW
YORK TIMES October 16, 1997, pg. G2.

[6] Fox Butterfield, "Crime Keeps On Falling, but Prisons Keep On
Filling," NEW YORK TIMES September 28, 1997, Section 4, pgs. 1, 4. And
see: Associated Press, "In 90's, Prison Building by States and U.S.
Government Surged," NEW YORK TIMES August 8, 1997, pg. A16.

[7] Allen J. Beck and Darrell K. Gilliard, "Prisoners in 1994," BUREAU
OF JUSTICE STATISTICS BULLETIN [NCJ-151654], August, 1995, pgs. 1-13.

[8] K.A. Munoz and others, "Food intakes of U.S. children and
adolescents compared with recommendations," PEDIATRICS Vol. 100, No. 3,
Part 1 (September 1997), pgs. 323-329. And see Associated Press, "Few
Young People Eat Wisely, Study Shows," NEW YORK TIMES September 3,
1997, pg. A12.

[9] Barbara Strauch, "Use of Antidepression Medicine For Young Patients
Has Soared," NEW YORK TIMES August 10, 1997, pgs. A1, A24.

Descriptor terms: wages; executive pay; occupational safety and health;
road rage; aggressive behavior; crime; prisons; crack cocaine;
california; higher education; diet; children; pharmaceutical
corporations; antidepressant drugs; prozac; paxil; zoloft; suicide;

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