Sunday, June 14, 2009

Someone else asks...

Ynet News
Our self-serving execs
Is it proper for executives of Jewish non-profit organizations to be paid huge salaries?
Published: 06.14.09, 11:22 / Israel Jewish Scene

This week the Froward published an article that exposed which executives of major American Jewish organizations took personal pay cuts while firing staff and which did not. Out of the 21 organizations surveyed only nine of the executives did so. Three of them refused to comment. The rest laid off employees while their own salaries remained sky high. While this shows a complete lack of leadership and commitment to people less fortunate than themselves it may not be unethical. The ethical dilemma here is another one...

...One must not forget that these are organizations that regularly send us letters begging us for our hard-earned cash. Often they paint dire pictures of urgent need to inspire us to give more. While I am not suggesting that donated money goes exclusively to pay big salaries. Certainly most of the contributed money goes to important programs. But that is beside the point...

...Now clearly one can argue that Jewish organizations need to pay their executive with salaries that are competitive in the market. Howard Rieger of the United Jewish Communities argued exactly this point in the Forward article. He said that, “In a competitive marketplace for management talent, not-for-profits needed to weigh the urge to cut salaries for the sake of appearances against the need to pay enough to retain top-flight employees.” Unfortunately this market reality does not fit in with our higher sense of Jewish ethics and morality...

...A person who makes the decision to work in the non-profit sector must realize that they are trading the potential for attaining wealth for a life of meaning and fulfillment. It is this tradeoff that Judaism extols and praises.

One, however, who seeks wealth from a pool of money donated for a specific worthy communal cause, becomes the subject of derision from Judaism’s ethical and rabbinic writings. It is time for the executives of our organizations to step up and show some real leadership. That begins with internalizing and then modeling the concept of working in the service of others—a mere ten percent pay cut does not show that type of leadership. For most of them a 60-80% pay cut would be much more appropriate.

The same can be said for Rabbis, Rosh Yeshivas, Dayschool administrators, Federation Employees, and so on. The median household income in the United States is about $55,000 give or take (2007 stats). There is no reason for ordinary administrators to earn much more than the median income - they simply aren't doing anything above average or extraordinary. They do the exact same things that people in other corporations and businesses do.

The fact that they supposedly do it for the poor or in the name of God does not make a difference. The market cannot bear anymore inflated egos or inflated salaries. That things might have been different if not for globalization is a non-starter - globalization happened and American wages have been held down due to having to compete for jobs with third world backwaters with no Judeo-Christian ethical labour, environmental and safety regulations. As the chart we saw recently shows, when adjusted for inflation people's incomes have been stagnant for 30+ years.

So it should be obvious to even the most dense executive of a Jewish institution of any kind that salaries far above the median wage are simply unsustainable. The community cannot support people making high wages to do average jobs. As fewer and fewer people can afford to support them, the funding issues are going to get more and more alarmingly bad as the recession/depression continues - and for a long time afterward.

It's time to face the music now, and make adjustments while things are not so desperate and painful. Money spent on administrator's high salaries is money much better spent to benefit the community directly, through charity or education or other programs. We cannot justify paying high salaries to glorified office workers when people in the community are going hungry, having their utilities cut off, can't afford tuition costs, or are even losing jobs and losing homes.

And it says a lot about us that we even have to debate this point.

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