A Thought on Class Conflict

As some of the tension and protest in Ferguson and Baltimore recedes (or has it?), many are giving renewed thought to the state of racism in our society today. Numerous conclusions, including this powerful Time magazine cover from earlier this month, have been made draw comparison to the Civil Rights movement of the 1960’s. However, another underlying cause to the issue is class.

Whether or not this is the true cause I don’t know but we can all acknowledge a few things. Here are some of the typical associations about African-Americans relative to whites. They’re poorer than whites, more likely to go to prison, more likely to be on welfare, and more likely to be unemployed. Many of these issues have a historical basis, and while the civil rights movement improved liberties and economic situations for many, class didn’t necessary change as radically. When we look at the root of these problems the racism contributes to the history, but the current situation is based more on social class. Combine that with systemic racism from years prior and the situation isn’t promising. When your parents are poor, in jail, unemployed, or on welfare, your economic and educational opportunities in the United States are dramatically reduced. This makes it much more likely that you will repeat the behavior of your parents, and thus determining your social class.

According to the American dream, with a little elbow grease, grit, and work ethic you can create yourself and be as successful as you like. In fact, this very ideology is part of the problem. Just as some wealthier whites display downward classism towards other whites who they consider “rednecks” or “white trash”, they might have similar feelings towards many blacks. They are poorer, and Americans tend to discriminate against poor people because they sometimes blame poor people for staying poor and not climbing out of poverty.

To what extent class is the true cause I am not sure, but with as each new generation comes statistics showing people have greater levels of racial acceptance e.g. more approving of inter-racial marriage, as well as intellectual equality between races. These generational shifts could signify a “less racist” population every decade or so. If a decrease is racism is the case, maybe our feelings as a nation about class need to be further examined as we attempt to sort out the issues stirring this unrest.

Should There be a Cap on Salaries for Executives?

One Side of the Coin

After watching the Inequality for All documentary on wage inequality in the U.S, I was curious about the specifics of the wages and what was being done to reduce the gap. Executive pay in comparison to typical worker pay skyrocketed from an average of 20 times in 1965 to 296 in 2013. Even after the financial crisis of 2008, top executives are comparatively making more than ever by all accounts. Protest efforts from workers, and potential restrictions from the SEC have faded into the background as pay increases virtually unrestricted. In order to help restore a healthier balance we need the some sort of legislation as a cap for salaries.

Unless specific legislation is passed to even out, or proporciate the gap between the median worker and top executives, nothing is going to change on its own. Rather, I suspect the gap will only increase according to the current trend. The plan was to embarrass companies by highlighting their wage gaps, and it has not worked in the slightest. “The increased pressure for more disclosure was motivated by public shaming,” said Regina Olshan, head of the executive compensation practice at Skadden, Arps, Slate, Meagher & Flom. “The idea was somehow that the companies would be ashamed and change their ways.”

When this didn’t work the SEC tried to enact a rule to rectify the situation.

In 2013 The Securities and Exchange Commission proposed a specific pay-ratio rule for companies to disclose the average annual total compensation of their employees and compare that number with the amount awarded to the chief executive of the company. This would go on the overview disclosure seen by investors.

The Result: Heavy lobbying from the financial services industry and top media services kept the bill from advancing further. According to the Business Roundtable, (representing CEO’s lobbying efforts) “As an initial matter, we do not believe that the proposed pay ratio rules will provide investors with useful or accurate information.”

While the stats are difficult to calculate and could be potentially skewed, the usefulness of the information is crucial in the shaming tactic that was initially intended. According to the companies of many top paid executives, executive compensation is highly dependent on performance. However, only half of top 10 hedge funds outperformed S&P's 500-stock index in 2014, yet their managers fared exceedingly well, with the top 25 earning $11.62 billion in compensation.

Lastly, the other significant explanation for the wages of CEOs is to attract the best talent. The attracting of talent is on a relative scale as I see it. If more and more companies push the envelope for payment, the rest will follow. If the wage gap was much more even in the 1970’s, were companies then attracting lesser talent? I doubt it. It’s all proportional to what the norm has become and without proper regulation the current model could spiral out of proportion.

State of Georgia Steps Into College Football

Finally, there is some good news this past week in college football, (if you are in favor of keeping the amateurism of the sport).

The state of Georgia has taken its own steps to help control the illegal payments to college players. New legislation aims to punish those who pay athletes, and tempt them with benefits while they are in school.The new legislation is named for, and shaped around, Georgia running back Todd Gurley, who signed autographs in exchange for payment earlier this year. Gurley obviously knew about this NCAA rule restricting that type of action. It is made obvious to all athletes, and especially high profiles ones such as him where the rule is actually relevant. However the punishment if he were to be caught was not enough of a deterrent. He knew of the potential consequences and broke the rules anyway. Hence lawmakers have now taken it into their own hands to help regulate the violations in college football. This time they moved to protect the universities, and penalize those who are involved in these illegal activities with student-athletes.

Usually the legal system does not have much interaction with these violations(rather leaving it to the NCAA), but Georgia felt it was necessary to step in. This is extremely important to the universities as well because they have a way out of the mess now. They don’t have to take down banners and gets wins taken away after scandals. Now they have a more significant penalty in place to help deter people who could potentially involve athletes with these activities.

Barry Fleming, the man who drafted the bill, had this to say about its intent.“We plugged it into a law about alumni being overzealous. Now it's a misdemeanor of a high and aggravated nature. It can be up to a year in jail and a $5,000 fine. On the civil side, the university can sue the person who does this for any damages sustained, like losing a TV contract, not going to bowl games.” Often times illegal activities are a joint operation between universities and boosters, but this law targets those outside the school to help keep any temptations for the schools and athletes away.

This new law aims to discourage NCAA rules violations moving forward. Only the state of Georgia will enforce this rule as of now, but hopefully other states will follow suit and enact similar laws to help discourage the glaring violations that go along with college football.

Duke Leads Final Four Teams in Graduation Rates That Don't Reflect Real Graduation

As the winner of this years March Madness tournament, Duke’s men's basketball team is at the top when it comes to their success on the court. However, the amazing part of this year is that they also led the way in academic success. Duke was able to graduate more of its players than any of the other Final Four teams competing. If Duke is able to win, and graduate players, it should set a standard for the rest of the NCAA. It can be done, and it should be rewarded and celebrated.

That is the narrative they want everyone to hear. It’s a load of garbage, too. This is like being the best of the bad. They are by no means leading the NCAA.

A school’s graduation rates are usually assessed in one of two ways. The U.S. Department of Education’s Federal Graduation Rate, and the NCAA’s Graduation Success Rate.

According to the more generous GSR, 100 percent of Duke’s men’s basketball team who started there in 2007 graduated. While that’s supposed to be impressive, it is really irrelevant because the FGR numbers tell the real story. Only 67 percent of male basketball players who began their playing career at Duke graduated from the school within six years. This is so low for the type of school Duke is. A top private university with very generous funding, future hall of fame coach, and access to the nations best recruits arn’t doing too well. You’d think they would have higher standards.

As long as most schools hide behind “fake” numbers, and the NCAA stands by, nothing is going to change. There needs to be more of a push from fans to help get the athletes educated who go to these schools. We keep tuning into the tournament every march and more money is made, and in turn justifies the current system to those involved.