Where 'Class Warfare' Really Comes From

What fosters a so-called "class war'' is the arrogance of executives who believe they should be rewarded just for being executives.

By SHARE

It's been one thing after another for Pinnacle Airlines. In February, 2009, a regional flight operated by Colgan Air, which is owned by Pinnacle, crashed in suburban Buffalo, killing 50 people. The accident was, according to the National Transportation Safety Board, due to pilot error, raising questions about why Colgan was using such young and low-paid pilots (particularly copilots) to handle such a life-and-death responsibility. Recently, Pinnacle Air filed for bankruptcy, and the pilots have been having trouble getting paid. The families of the victims may have trouble collecting, too, since the bankruptcy imposes a mandatory stay on remaining lawsuits involving flight 3407. The company, seeking to restructure, is pushing for 5 percent employee pay cuts.

And yet, that didn't stop Pinnacle from giving its executives huge cash windfalls just weeks before the company filed for bankruptcy. As found by some excellent reporting by the Buffalo News's Jerry Zremski, one exec was awarded a $250,000 raise; another was given a $125,000 bump, and—most stunning, after the deadly debacle—its departing CEO was given a $1.7 million consulting contract. Unless he's going to explain how not to do things, that amount is particularly questionable.

[Rick Newman: How Corporate America Is Damning Itself]

Americans were outraged when this sort of practice happened on Wall Street, but the big bucks don't stop there. The attitude seems to be that no matter how badly an executive behaves, or how poorly the company performs, those at the top need never be held accountable—certainly not financially.

If the premise is that people need to be paid more to encourage them to do better at work, why pay the pilots so badly? The average Pinnacle pilot makes $60,000-70,000 a year, but copilots, before they formed a union, were paid as little at $16,000 a year, the News reported. Now, copilots are paid a base salary of $28,000, and Pinnacle wants to cut employee pay even as it is rewarding the executives who presided over a failing company.

[Read the U.S. News debate: Do the Rich Pay Their Fair Share in Taxes?]

To those who fret about a simmering "class war": This is where it comes from. It doesn't come from rhetoric, campaign or otherwise, that President Obama or the Democratic Senatorial Campaign Committee uses. It doesn't even come from Mitt Romney talking about how many Cadillacs his wife owns, or what salary level his NASCAR-fan friends are in. It's not anybody's words; it's this sort of outrageous mismatch, not only of money but of responsibility and accountability. This is a capitalist country, and few begrudge people for making a lot of money after coming up with a creative idea, or brilliantly managing business. What fosters a so-called "class war is the arrogance of executives who believe they should be rewarded just for being executives, forcing workers and consumers and taxpayers to pay when their business venture went south. There were many losers in the Pinnacle story, and some of the losses can never be retrieved, as the families of 50 crash victims well know. Someone needs to pay—and it shouldn't be the employees or the victims' families. It should be the executives.

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