Executive Pay: How does the CEO’s pay compare to workers’ checks?

Auto worker on the line
T
he inequality between CEO pay and the typical worker’s pay has grown in leaps and bounds.
   

In 1965, CEOs of big American companies earned 24 times the typical worker’s pay, according to the Economic Policy Institute. The EPI is a non-partisan think tank.

In 2007, the difference was 275 times the typical worker’s pay. The average CEO’s compensation had increased 167.3% from 1989 to 2007. In the same period, the compensation of the typical worker had risen by only 10%.

Surprised?

The huge gap between CEO and worker pay in America has no rival around the world, according to the EPI’s statistics. The United Kingdom is the only nation that comes close. Other than the U.K., all European nations and Japan have much smaller ratios of CEO to worker pay.

The flap about big bonuses for executives of bailed out banks is only the most recent instance of long-run concerns about growing inequality.

Even before the 2008 crash, some leaders labeled the rising pay gap “perfectly scandalous,” called for a “fat cat” tax on the highly compensated, and argued for an all-around cap on top executives’ pay.

These weren’t even American leaders—they were Europeans referring to the rising gap in their own countries. They were quoted in a USA Today article last year.

 

America continues to top the pay-inequality list. Should this be a cause for concern?
    Are you concerned about it? Why or why not?

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