- - Thursday, June 4, 2015

ANALYSIS/OPINION:

It’s one of Washington’s annual rituals: The AFL-CIO, the largest federation of labor unions in America, releases its annual Executive PayWatch report, alleging the “average worker” makes pennies in relation to fat-cat CEOs swimming in pools of gold.

Left-wing politicians and journalists eat it up, but the report is based on faulty statistics and hides an embarrassing secret: Quite a few union bosses make more than the average business executive.

The AFL-CIO asserts that CEOs make more than 300 times what the average worker earns. But as numerous people have pointed out — ranging the ideological spectrum from economist Mark Perry at the American Enterprise Institute to The Washington Post’s “Fact Checker” — the comparison the AFL-CIO uses is suspect. The union cherry-picks the country’s top-paid executives from the S&P 500 as their CEO sample, while using a calculation for the “average worker” that undercounts their true earnings.

Using the top-paid executives for comparison purposes is a ridiculous way to assess the pay of employees and executives. Indeed, one could goose the pay of the “average worker” by using professional athletes for the comparison. Such a move would be little different from picking CEOs who all guide companies worth billions of dollars as representative business people — it’s picking the extreme to represent the mainstream.

In reality, the average chief executive makes $180,700 according to compensation data from the federal Bureau of Labor Statistics. And guess who makes more than that? According to unions’ annual financial filings with the federal government, 162 union presidents, executive presidents or international presidents — not including those who retired and took deferred compensation — made more than the average CEO in 2014.

That’s a deliberately conservative estimate of the number of union bosses who make more than the average chief executive: It doesn’t include officials who carry a title other than “president” or some other semantic weasel words. Dozens of union secretary-treasurers and other officers also make more than that amount.

In our analysis, the big wage winner was John Niccollai, president of New Jersey-Local 464 of the United Food and Commercial Workers, who was paid $573,299 out of the compelled dues from the three-figure paychecks of supermarket workers. If you’re counting total compensation, the top dog is Laborers’ Union President Terrence O’Sullivan, whose expense account runs his tab up to $670,403.

These union bosses might defend themselves by saying that they have special talents and responsibilities that have to be fairly compensated. And they’d be mostly right — but the same fact applies to a business CEO, whether that person makes less than six figures at a very small business or millions as head of a Fortune 500 company. Union bosses bashing businessmen for being paid for their skills is the highest hypocrisy, especially when considering that businessmen are paid from the fruits of voluntary commerce while union bosses are most often paid from forced dues.

The left and union bosses want to push the idea of “income inequality” as the cause of all America’s economic problems. The unions and the organizations they fund will create biased “research” to get the notion in front of 2016 voters. When it comes to digesting news about who gets paid what, the public needs to remember to look for the union label — it’s a sign the research is suspect.

Rick Berman is president of Berman and Co., a Washington public affairs firm.

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