Income Inequality Narrative Turns to CEOs

NATIONAL REPORT — With state legislative sessions swinging into action across the country this month, operators will need to manage not only the traditional issues affecting the P&L, like wage mandates, paid leave expansions, wage theft and restrictive scheduling proposals that have become all too familiar, buy they’ll also need to keep close watch of a host of emerging issues that may cause disruption as well.

The newest tactic in the income inequality narrative is escalating quickly, according to Joe Kefauver, managing partner of Align Public Strategies and Convenience Store News’ government affairs columnist.

“So far, just two weeks into their legislative sessions, numerous states are proposing laws to reconcile the pay differential between CEOs and frontline workers through various mechanisms, namely the tax code,” said Kefauver. “Essentially, they want to penalize companies if too much of a discrepancy exists.”

The bills introduced are modeled after the legislation that took effect last year in Portland, Ore. Other states are proposing similar but slightly different “millionaire’s taxes.”

Whether these and other proposals make it out of committees and become law (some will, according to Kefauver), it is only one aspect to consider. The exercise and publicity around the legislative process puts the issue on the table for activists, media and other stakeholders to drive.

Additionally, as the new federal pay data reporting requirements for publicly traded companies takes effect in early 2018, there could quickly be a national conversation about CEO pay-equity, which could be very problematic for the employer community.

Kefauver points out that as many states, particularly some blue (Democrat) states, react to the new federal tax bill by opening up their codes in search of new revenue, taxes like these fit like a glove into that process and subsequent narrative.

He warns that retailers shouldn’t dismiss this threat. “Those same folks thought a national consensus on a $15 minimum wage would never happen, nor would Republicans ever become champions of paid leave mandates. And yet, here we are,” he noted.

“In the ‘lifecycle’ of labor-related issues, it takes about three to five years for these issues to take root — to go from fringe to mainstream. We are now in year three of the CEO-pay issue and things are starting to look eerily familiar,” Kefauver continued. “After I see a movie a couple times, even I can get pretty good at predicting the ending. I think I know how this one ends, too.”