Walgreens has no buzz. Almost every week, millions of us walk into a local outlet of this drab drugstore giant and give the enterprise all around us not a second thought. Maybe we should.
Walgreens illustrates — personifies — the long-term economic trends that the Trump years so cavalierly doubled down upon. The core reality at the heart of these trends: Top corporate executives are busily pocketing immense paychecks at the direct expense of their workers.
At Walgreens, workers start an $10 an hour. No chain store empire employing essential workers pays less. Could Walgreens afford to pay more? Just no way, the company’s flacks would like us to believe. Walgreens was cost-cutting, the excuses go, even before the pandemic hit, announcing plans in 2019 to shut down 200 of its 9,000 local U.S. outlets.
The squeeze on Walgreens workers has only deepened over the course of the pandemic. No retail giant in the United States, report Brookings analysts Molly Kinder and Laura Stateler, has given its workers less of a Covid hazard-pay bump than Walgreens, just 18 cents an hour.
But the pathetically paltry Walgreens hazard pay boost looks even worse when we turn our attention to the Walgreens eminences who have faced no pandemic-time hazard. These most fortunate Walgreeners — the power suits who run the company — have continued to rake in fabulously generous rewards.
Walgreens CEO Stefano Pessina, the company disclosed last month, took home $17 million in the company’s fiscal 2020. Altogether, the five top Walgreens execs averaged $11 million for the year, a 9 percent hike over the previous year’s annual average.
Pessina became the top dog at Walgreens after his previous employer, a Swiss-based pharmacy retailer, merged into Walgreens in 2015. Since then, his pay has soared, from $7.1 million in 2015 to $14.7 million in 2017 and then to $19.2 million in 2019.
In fiscal 2020, meanwhile, the typical Walgreens employee pulled down a mere $33,396. Pessina’s take-home outpaced that meager reward by 524 times. In effect, Pessina made more in a single weekday morning than his company’s median-pay workers made for an entire year of labor.
Brookings’ analysts Kinder and Stateler have found similar levels of top-dog greed at other U.S. retail giants, most notably at Amazon and Walmart. Amazon CEO Jeff Bezos and the heirs to the Walmart fortune, the two researchers note, “have grown $116 billion richer during the pandemic — 35 times the total hazard pay given to more than 2.5 million Amazon and Walmart workers.”
Amazon and Walmart, Kinder and Stateler added last month, “could have quadrupled the extra Covid-19 compensation they gave to their workers” and still earned more profit than they registered in the previous year.
Not every major corporate player has treated the pandemic as just another easy greed-grab opportunity. Workers at Costco — who start at $15 an hour, $5 an hour more than workers at Walgreens — have had an extra $2 an hour added to their hazard base rate.
Costco’s top executive team, interestingly, last year collected less than half the pay that went their counterparts at Walgreens. Costco’s most typical workers took home $47,312 for the year. The ratio between that median worker pay and Costco CEO W. Craig Jelinek’s compensation? That ratio sat at 169 to one, less than one-third the pay gap between Walgreen’s chief exec and his company’s most typical workers.
The question these numbers raise for the American people: Which corporations should we as a society be rewarding, those companies whose execs enrich themselves at worker expense or those that do a much better job at valuing the contributions all their employees are making?
In moments of past national crisis — like World War II — lawmakers took action to prevent corporate profiteering. They put in place stiff excess profits taxes. We could act in that same spirit today. We could, for instance, raise the tax rate on companies that pay their top execs unconscionably more than their workers.
We could also start linking government contracts to corporate pay scales: no tax dollars to any corporations that pay their top execs over a certain multiple of what their workers take home.
Efforts to link taxes and contracts to corporate pay ratios have already begun. Voters in San Francisco this past November opted to levy a tax penalty on corporations with top execs making over 100 times typical San Francisco worker pay. In Oregon, the city of Portland had earlier taken a similar step. At the national level, progressive lawmakers have introduced comparable legislation.
Donald Trump may now be gone from his power perch. But the corporate execs who did so well throughout his tenure remain in place. We need to change the rules that flatter their fortunes.