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Enact wage freeze, caps thoughtfully

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other opinions Detroit Lakes,Minnesota 56501
Detroit Lakes Online
Enact wage freeze, caps thoughtfully
Detroit Lakes Minnesota 511 Washington Avenue 56501

Anytime someone messes with someone's pay, that's serious business.

We saw efforts to do both at the federal and state levels on Wednesday -- one which was proper, and one which is questionable.


President Barack Obama on Wednesday put a halt to a seemingly never-ending flow of cash to top executives from major banks that also stand there, hands out, asking for taxpayer dollars to bail them out.

Obama capped chief executives' salaries at $500,000 on those companies that are receiving federal aid under the Troubled Assets Relief Program, or the initial $700 billion bailout bill approved last year by Congress. The move became necessary when a study in late December showed that the first 116 banks to get $188 billion in bailout bucks paid their top executives an average $2.6 million in annual salary, bonuses and benefits the previous year. The banks spent $1.6 billion on compensation for their top 600 executives in 2007.

Taxpayers want accountability and capping top pay is a way to put the institutions on notice that they'd better clean up their act with our money at risk.

"We don't disparage wealth," Obama said. "But what gets people upset -- and rightfully so -- are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers."

President Obama is right.

Meanwhile, a Minnesota state senator proposed Wednesday that a wage freeze be imposed upon public employees -- state, county, city, school districts, state universities and colleges.

While such a freeze may save $1 billion, it is problematic, as it most affects middle income Minnesotans who happen to be public workers. Also, it unilaterally breaks collective bargaining agreements, setting up a court battle or possible strikes.

Union reaction was swift against the proposal, with officials saying the proposal should be negotiated and include a guarantee of no public worker layoffs. With most union contracts in place with local governments, a possible state action would be near impossible to impose without a court fight.

And, at a time when the federal government is seeking economic stimulus by getting money and credit to people to purchase goods, imposing a public sector wage freeze would affect the buying power of a large segment of middle-class Minnesotans.

That's adversely affecting too many average families in Minnesota, and shouldn't be imposed unless properly negotiated.

-- Bemidji Pioneer