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From CEO Pay Has Grown 90 Times Faster than Typical Worker Pay Since 1978 | Economic Policy Institute
Over the last several decades, inflation-adjusted CEO compensation increased from $1.5 million in 1978 to $16.3 million in 2014, or 997 percent, a rise almost double stock market growth. Over the same time period, a typical worker’s wages grew very little: the annual compensation, adjusted for inflation, of the average private-sector production and nonsupervisory worker (comprising 82 percent of total payroll employment) rose from $48,000 in 1978 to just $53,200 in 2014, an increase of only 10.9 percent. Due to this unequal growth, average top CEOs now make over 300 times what typical workers earn. Although corporations are posting record-high profits and the stock market is booming, the wages of most workers remain stagnant, indicating they are not participating equally in prosperity. Meanwhile, CEO compensation continues to rise even faster than the stock market.
And from Top CEOs Make 300 Times More than Typical Workers: Pay Growth Surpasses Stock Gains and Wage Growth of Top 0.1 Percent | Economic Policy Institute
The chief executive officers of America’s largest firms earn three times more than they did 20 years ago and at least 10 times more than 30 years ago, big gains even relative to other very-high-wage earners. These extraordinary pay increases have had spillover effects in pulling up the pay of other executives and managers, who constitute a larger group of workers than is commonly recognized.1 Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1 percent and top 0.1 percent of U.S. households from 1979 to 2007 (Bivens and Mishel 2013; Bakija, Cole, and Heim 2012). Since then, income growth has remained unbalanced: as profits have reached record highs and the stock market has boomed, the wages of most workers, stagnant over the last dozen years, including during the prior recovery, have declined during this one (Bivens et al. 2014; Gould 2015) .
In examining trends in CEO compensation to determine how well the top 1 and 0.1 percent are faring through 2014, this paper finds:
I could go on but I'm trying to keep this down to 2 screens
Over the last several decades, inflation-adjusted CEO compensation increased from $1.5 million in 1978 to $16.3 million in 2014, or 997 percent, a rise almost double stock market growth. Over the same time period, a typical worker’s wages grew very little: the annual compensation, adjusted for inflation, of the average private-sector production and nonsupervisory worker (comprising 82 percent of total payroll employment) rose from $48,000 in 1978 to just $53,200 in 2014, an increase of only 10.9 percent. Due to this unequal growth, average top CEOs now make over 300 times what typical workers earn. Although corporations are posting record-high profits and the stock market is booming, the wages of most workers remain stagnant, indicating they are not participating equally in prosperity. Meanwhile, CEO compensation continues to rise even faster than the stock market.
And from Top CEOs Make 300 Times More than Typical Workers: Pay Growth Surpasses Stock Gains and Wage Growth of Top 0.1 Percent | Economic Policy Institute
The chief executive officers of America’s largest firms earn three times more than they did 20 years ago and at least 10 times more than 30 years ago, big gains even relative to other very-high-wage earners. These extraordinary pay increases have had spillover effects in pulling up the pay of other executives and managers, who constitute a larger group of workers than is commonly recognized.1 Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1 percent and top 0.1 percent of U.S. households from 1979 to 2007 (Bivens and Mishel 2013; Bakija, Cole, and Heim 2012). Since then, income growth has remained unbalanced: as profits have reached record highs and the stock market has boomed, the wages of most workers, stagnant over the last dozen years, including during the prior recovery, have declined during this one (Bivens et al. 2014; Gould 2015) .
In examining trends in CEO compensation to determine how well the top 1 and 0.1 percent are faring through 2014, this paper finds:
- Average CEO compensation for the largest firms was $16.3 million in 2014. This estimate uses a comprehensive measure of CEO pay that covers chief executives of the top 350 U.S. firms and includes the value of stock options exercised in a given year. Compensation is up 3.9 percent since 2013 and 54.3 percent since the recovery began in 2009.
- From 1978 to 2014, inflation-adjusted CEO compensation increased 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker’s annual compensation over the same period.
- The CEO-to-worker compensation ratio, 20-to-1 in 1965, peaked at 376-to-1 in 2000 and was 303-to-1 in 2014, far higher than in the 1960s, 1970s, 1980s, or 1990s.
- Over the last three decades, compensation for CEOs grew far faster than that of other highly paid workers, i.e., those earning more than 99.9 percent of wage earners. CEO compensation in 2013 (the latest year for data on top wage earners) was 5.84 times greater than wages of the top 0.1 percent of wage earners, a ratio 2.66 points higher than the 3.18 ratio that prevailed over the 1947–1979 period. This wage gain alone is equivalent to the wages of 2.66 very-high-wage earners.
- Also over the last three decades, CEO compensation increased more relative to the pay of other very-high-wage earners than the wages of college graduates rose relative to the wages of high school graduates.
- That CEO pay grew far faster than pay of the top 0.1 percent of wage earners indicates that CEO compensation growth does not simply reflect the increased value of highly paid professionals in a competitive race for skills (the “market for talent”), but rather reflects the presence of substantial “rents” embedded in executive pay (meaning CEO pay does not reflect greater productivity of executives but rather the power of CEOs to extract concessions). Consequently, if CEOs earned less or were taxed more, there would be no adverse impact on output or employment.
- Critics of examining these trends suggest looking at the pay of the average CEO, not CEOs of the largest firms. However, the average firm is very small, employing just 20 workers, and does not represent a useful comparison to the pay of a typical worker who works in a firm with roughly 1,000 workers. Half (52 percent) of employment and 58 percent of total payroll are in firms with more than 500 or more employees. Firms with at least 10,000 workers provide 27.9 percent of all employment and 31.4 percent of all payroll.
I could go on but I'm trying to keep this down to 2 screens
In before someone says "We are suppose to willingly give and not be forced... blah blah blah..." and/or "give all your money away then." Just more deflection from why they are cool with Reagan's corporate welfare policies. (I'm not totally anti-Reagan, but I do dislike his economic policies.)
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Smoke,
You do know you are completely free to live off what you can grow on your own land. OH................... that's right, you AREN'T, are you? There are no less than around thirty government regulations you have to satisfy and pay for (some on an ongoing basis) to even grow a garden for profit on your own lot.
You do know you are completely free to live off what you can grow on your own land. OH................... that's right, you AREN'T, are you? There are no less than around thirty government regulations you have to satisfy and pay for (some on an ongoing basis) to even grow a garden for profit on your own lot.
So we need corporate welfare so CEO's can afford all the red tape you're talking about? I guess if they can't survive off their millions/billions, we should continue to bail them out like Bush and Obama did... They have children to feed... They must eat A LOT!
We aren't talking about mom and pop shops like Ricky was talking about. They aren't covered like the big boys are. They aren't too big to fail.
We aren't talking about mom and pop shops like Ricky was talking about. They aren't covered like the big boys are. They aren't too big to fail.
I don't know if that was bad or good. But let's put you in office at those times............... What would you have done? Do you even have the slightest idea of how many thousands of jobs we are talking about making disappear? Then how are you, as president, going to feed them, let alone give them some place to sleep?
Well, if there is a lot of unnecessary red tape that cause business owners (both big CEO's and small mom/pop shops) expense, then I would propose we cut it. Democrats will definitely throw a fit over it, but I would appeal to the side of them that hates the fact big businesses are untouchable (too big to fail). You can't make everyone happy, I know that.
When we have "too big to fail" businesses, we don't allow for fresh blood in the market. We are left with stagnant dead-end waste. The government picks winners and losers... The CEO's stay rich at the expense of their workers. Idealistically, if everyone WASN'T too big to fail, then when one business fails another rises. One group of people will lose a job, but other people will be employed by the new business. That's how capitalism is suppose to work. Corporate welfare goes against that notion.
When we have "too big to fail" businesses, we don't allow for fresh blood in the market. We are left with stagnant dead-end waste. The government picks winners and losers... The CEO's stay rich at the expense of their workers. Idealistically, if everyone WASN'T too big to fail, then when one business fails another rises. One group of people will lose a job, but other people will be employed by the new business. That's how capitalism is suppose to work. Corporate welfare goes against that notion.
Not specifically knocking anyone, but some people just do not seem to really think anywhere on down the road.
I have never been responsible for any more that 250 men on a job. But, believe me, it is staggering to realize that you have to think about THEIR futures at least a year ahead.
And don't you think, for a moment, that Trump does not feel the responsibility for the thousands of people he has employed..... and now the entire country.
I have never been responsible for any more that 250 men on a job. But, believe me, it is staggering to realize that you have to think about THEIR futures at least a year ahead.
And don't you think, for a moment, that Trump does not feel the responsibility for the thousands of people he has employed..... and now the entire country.
Which is why I would rather have Trump over Hillary. The only issue I have is that Trump wants to control what businesses do (leaving the US for new jobs) by slapping their products with a 35% tariff. I love that businesses will be inclined to stay rather than having that 35% tariff but that isn't how the free market is suppose to work. It's a bandaid solution that doesn't fix the corrupt and broken system, but it does give immediate results at the expense of going against our ideals.
If it costs me $2 to make a product overseas... and I sell it here for $20........... while employing no Americans.
Wouldn't it make sense that the playing field has to be leveled if I sell here where it costs you $5 to make the same product... WHILE employing a thousand Americans?
That can only be done in a very few ways. One is to make me sell it at the same price you have to charge. (tax me on importing)......... Or give you corporate $ breaks to the point that you can still make money selling at my lower prices.
Actually, a combination of both has to be done.
Wouldn't it make sense that the playing field has to be leveled if I sell here where it costs you $5 to make the same product... WHILE employing a thousand Americans?
That can only be done in a very few ways. One is to make me sell it at the same price you have to charge. (tax me on importing)......... Or give you corporate $ breaks to the point that you can still make money selling at my lower prices.
Actually, a combination of both has to be done.
Now this is the type of "corporate welfare" I'm in alignment with; conditional corporate welfare. If a business employs x amount of people and pays them a minimum of x amount of dollars, you then get x amount in "corporate welfare". This would be helping to fix the system as opposed to a bandaid solution. The other aspect is cutting the unnecessary red tape which will make it more profitable to produce here at home... well unnecessary for people who can stomach a tree or two being chopped down or a hole being dug.
However, if I had to pick between the same old business as usual the last 8 years, or Trump's bandaid solution, it's a no brainer; make mine a teenage mutant ninja turtle bandaid. I'd rather Americans have jobs as you were saying earlier.
However, if I had to pick between the same old business as usual the last 8 years, or Trump's bandaid solution, it's a no brainer; make mine a teenage mutant ninja turtle bandaid. I'd rather Americans have jobs as you were saying earlier.
The average worker accepts indentured servitude because they know if they don't their jobs will go overseas to some kid in China working for $5 a day. Corporate America has decided that in the global economy we will compete with third world countries by becoming on. Thus, we have stagnant or even decreasing compensation for workers while CEOs suck up all the increase, and with it the elimination of the middle class which is what made this country great and strong. If it costs an American company 25k to build an suv and a third world country, by virtue of servitude wages, only spends 10k to build the same vehicle, then the third world country should pay a 15k tariff rather than the US decreasing worker pay to match that of the third world country. Which is actually something Trump said he would do, imposing tariffs on third world products. But just how far do you think he'll get with that, having stocked his cabinet with rich people who don't want to share the wealth?