CEO Pay Has Skyrocketed While Worker Pay Languished Since 1978



A new report from one of America's most influential think tanks, the Economic Policy Institute, compared the growth of CEO salaries to the pay of average workers between 1978 and 2018 and found distressing inequality. CEO pay has increased 1,008% over that period while that of the typical worker increased only 12%.


Some of the highlights from their research:

1. The gap between CEO compensation and average wages continues to grow. Overall, there’s a 278-to-1 pay ratio between workers and CEOs. In 1989, the compensation ratio was 58-to-1 and in 1965, it was 20-to-1.


2. CEO compensation is growing even faster than the salaries of other top wage earners. "The inflation-adjusted annual earnings of the top 0.1% grew 339.2% from 1978 to 2017. CEO compensation, however, grew three times as fast!" So, the 1% is doing fine, but CEOs lead the pack and are one of the primary drivers of growing income inequality in America.

Marketwatch: ... "the distribution of household wealth in America has become even more disproportionate over the past decade, with the richest 10% of U.S. households representing 70% of all U.S. wealth in 2018, compared with 60% in 1989, according to a recent study by researchers at the Federal Reserve."

3. CEO salary growth doesn't seem tied to "market forces" as some conservatives might argue. In examining how corporations set executive pay, the authors of the study found, "CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills."


4. The authors offer a variety of suggestions for addressing the growing "CEO pay gap." Among other things, they propose reinstating the higher top marginal income tax rate, and allowing company shareholders more influence in setting CEO pay.


#news #research

By: Don Lam & Curated Content


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