On Wednesday, June 4^th, the Seattle City Council’s Education and Governance Committee voted to grant the highest paid City-employed executive, Jorge Carrasco, additional pay of up to $100,000, retroactive to January 1^st. Mr. Carrasco is the General Manager and Chief Executive Officer of Seattle City Light, a publicly-owned utility. He is currently paid $245,000 annually.

It is important to note that the Council Committee passed this raise, which amounts to paying Mr. Carrasco up to $175/hour, just two days after voting on the historic $15/hour minimum wage ordinance, and pledging to address income inequality.

The question of a pay hike for Mr. Carrasco came to the Council Committee following approval from the Mayor’s office. During the Committee discussion, the Mayor’s Personnel Director, Susan Coskey, said that there were “glaring differences” between City-employed executives and those in the private sector. Ms. Coskey also said that Mr. Carrasco is currently “underpaid.”

When he came into office, the Mayor of Seattle started paying an average of $45,000 more than his predecessor to top deputies. Around 800 City workers, meanwhile, are still waiting for the $15/hour promised to them by the Mayor in his executive order in January.

While Mr. Carrasco’s salary is financed by ratepayers, and not from the City’s direct funds, the same households that pay the regressive taxes of this city and state are also the ratepayers for the City’s utilities. It is not clear how the city government plans to justify such executive pay hikes at a time when electricity and other utility rates are increasing beyond the capacity of households struggling from the brunt of the recession. Such executive pay hikes are also completely inconsistent with efficiency targets included in City Light’s Strategic Plan. How can City Light claim to be in cost-saving mode and yet have exorbitant increases in executive pay?

My office has reiterated that the demand for a $15/hour minimum wage would not even have been on the city government’s agenda, let alone passed, had it not been for the grassroots mass movement of low-wage workers, community organizations and labor groups, 15 Now, and Socialist Alternative’s insurgent campaign to get a socialist and working class voice to City Hall.

The fact that this business-as-usual approach of increasing the already-inflated salaries of executives occurred only two days after the landmark $15/hour vote further demonstrates that working people cannot rely on establishment politicians to represent the interests of working people and fight against inequality and executive excess. Social change has and will continue to require mass movements.

The primary argument made by the Mayor’s office and by Councilmembers is that executives need to be paid as much as their “peers” in order to attract and retain “talent.” Such reasoning is empirically flawed. It is true that reduced turnover among the lowest-paid and poverty-stricken workers has been observed in response to increases in minimum wage. It can also be argued that jobs that come with high levels of responsibility or stress should come with commensurate salaries.

It is extremely tenuous, however, for the City to argue that an executive who is already paid $245,000 a year is somehow unable to discharge his duties due to hardship and urgently needs a pay increase. Similar arguments for executive salaries have been made for decades by the financial sector, and it was some of the very same outrageously overpaid executives who precipitated the financial collapse of 2008 that has left so many lost jobs and destroyed lives in its wake.

I have personally pledged to take home only $40,000 from the six-figure salary the City pays me as a Councilmember. I do not think it makes me any less committed to my work.

This year, median CEO pay in the US crossed over $10 million dollars, while incomes of most of the workers in the 99% have stagnated or fallen. We need elected representatives who will work against rather than pander to Wall Street’s culture of extreme wealth consolidation at the top. This issue, like many others, illustrates once again why the working class needs its own candidates for electoral office who will run independent of the corporate agenda of the two parties, while empowering social movements.

Posted: June 12th, 2014 under CEO Pay, Income Inequality, Public Accountability
Tags: CEO Pay, Income Inequality, Public Accountability, Seattle City Light