Rep. Barney Frank said that wage inequality among U.S. workers is his No. 1 priority as he prepares to take over chairmanship of the House Financial Services Committee this week.In a speech at the National Press Club, Frank, D-Mass., said that he will hold hearings about wages over the next two years in an attempt to address the gap between economic growth and workers' wages.
“We have a system which is producing, by a combination of natural forces and government policy, more inequality than is necessary for efficiency or than is socially healthy, because it produces gridlock,” Frank said. He later added that getting the financial and business communities, including the Federal Reserve, to understand the importance of breaking such inequality is the single most important issue.
He specifically pointed to the recent announcement of the resignation of Home Depot Inc. chief executive Robert Nardelli as an example of gluttonous levels of executive pay.
“Even if inequality doesn't bother [the business community], even if Nardelli getting $210 million for being fired when other people make $7 an hour for working very hard, even people untroubled by that … they ought to recognize that we are in gridlock; that we are unable to go forward with policies that many think are pro-growth because there are so many people who see only the short-term pain that those inflict, or even the medium-term pain and don't see any gain.”
Frank also pledged to introduce a bill that would give shareholders the ability to vote on executive pay packages, though he said all the details of such legislation had yet to be hammered out. Frank also said he expects the House to pass new rules for government-sponsored mortgage lenders Fannie Mae and Freddie Mac, but that he would be opposed to limiting the investment portfolios the two companies maintain -- instead suggesting that some of Fannie and Freddie's profits be funneled into affordable housing programs.
