I ran a business. I know a CEO doesn't need to make 1,000 times more than his workers.

I’ve been an entrepreneur about as long as any American still alive. I started my fishing tackle business in 1937, as a high school sophomore. A few decades later, in a 1964 White House ceremony, President Lyndon Johnson named me the first Small Businessman of the Year.

At the ripe old age of 98, I’ve now been around long enough to watch the American business landscape evolve over the grand sweep of time — and I haven’t liked that evolution. 

Top executives today can pocket more for a morning’s labor than their employees earn in an entire year. Last year, the Institute for Policy Studies reports, 50 major U.S. corporations paid their chief executives more than 1,000 times what they paid their typical workers. 

I never paid myself more than four or five times what my employees were making. I lived like my friends in my hometown of Spirit Lake, Iowa. I drove an older car, served as a scoutmaster and resided in a modest home. I had a good life.

The younger me would have found today’s corporate world — where share prices mean everything and workers and communities mean just about nothing — unimaginable. 

Sharing, not shareholders

Even some top executives are recognizing that “business as usual” has become unsustainable. The business lobby group that represents America’s most prominent CEOs blew the whistle on this ugliness in August. 

In a formal Business Roundtable statement, more than 180 chief executives publicly rejected the notion that “corporations exist principally to serve shareholders.” They pledged instead to lead companies that would work for the benefit of all stakeholders — customers, employees and communities included.

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That’s a new pronouncement, but in it I hear echoes of what I learned about business ages ago. 

I remember one American Management Association session I attended early in the 1960s. We had 32 company presidents, some from small firms like mine, others from big time outfits like General Mills. Businesses, the session leader stressed, had to have a purpose grander than just piling up profits. 

That wisdom made complete sense to me, and I tried to live my business life from that perspective. 

My company’s business practices went beyond making my family as wealthy as we could be. We let workers do four nine-hour days for 40-hours pay, and had a profit-sharing plan that would eventually distribute 20% of all company earnings. 

We also set aside 10% of those earnings in an employee recreation fund, money we used for everything from ballgames to fishing trips. Once we closed our factory completely and all of us went to Yellowstone for a week. 

Our company tried to serve the greater community as well. We didn’t let warehouse space built up to anticipate future needs go empty. We put in tennis courts available for any locals to use.

Back in those mid-20th century years, America certainly had businesses that worked against the common good. But the idea that a modern business had to answer to many stakeholders, not just shareholders, set the overall business tone. 

Government policies bring change

Just as important, in the mid-20th century we had public policies — like a 91% marginal tax rate on married joint-return income of $400,000 or more — that reinforced that tone at every turn. Top business executives had little incentive to put a hard squeeze on workers, because most of the rewards for that squeezing went instead to Uncle Sam.

We haven’t had top tax rates anywhere near that for many years now. The current top rate for individuals, after the 2017 GOP tax cut, sits at just 37%. If we don’t start moving that back up, I fear that the Business Roundtable’s noble new goals will amount to no more than empty, self-serving rhetoric.

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But we need more than higher taxes on the rich. We need a whole array of new public policies that encourage businesses to share the wealth their workers create.

We could insist, for starters, that all corporate boards of directors must have significant worker representation, as Sens. Elizabeth Warren and Bernie Sanders have both come out in favor of. 

Workers would bring the values of sustainability, community and economic equity to discussions about corporate business practices. With workers on corporate boards, fewer companies would get away with paying their top executives exorbitantly more than their employees.

Why stop there? 

Imagine if we subjected corporations with unconscionably wide CEO-worker pay gaps to higher tax rates. In Portland, Oregon, a levy along that line went into effect last year. 

Or imagine if we stopped granting rewarding government contracts to firms that pay executives excessively more than workers. We already deny contracts to companies whose discriminatory policies add to racial and gender inequality. We shouldn’t let tax dollars go to companies that boost economic inequality either.  

We can create a world where businesses that care about all stakeholders can thrive. I hope I stick around long enough to see it.

Berkley Bedell served six terms in Congress as a Democratic representative from Iowa after founding and operating the Berkley Fly Co. He retired from Congress in 1986.