8 Reasons Some CEOs Make 331 Times As Much As Their Employees
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Here are some depressing statistics: In 2013, CEOs of S&P 500 companies made 331 times as much as their employees. Your average American worker not in a supervisory role made $35,239, while the average CEO made $11.7 million, according to the AFL-CIO Executive Paywatch website. CEO pay has increased a whopping 937 percent since 1978, according to a new report by the Economic Policy Institute.
So while CEOs are making a killing, more and more people find themselves with stagnant-at-best pay. People laid off from good-paying jobs (the result of rigged trade deals) are forced into jobs at half their former pay and no benefits, if they can find a job at all. Weak wage growth predates the Great Recession. Between 2000 and 2007, the median worker saw wage growth of just 2.6 percent, despite productivity growth of 16.0 percent, while the 20th percentile worker saw wage growth of just 1.0 percent and the 80th percentile worker saw wage growth of just 4.6 percent.
At this point, massive income inequality is not new, we all know about it. Yet there are still conservative myths floating around about why it is and what we can do. Conservatives say the poor are poor because of their own choices, but recent evidence shows that “social mobility” – the economic opportunity ladder – has largely disappeared. America’s rich only get richer and the poor don’t have much chance to do anything about it. Of course inequality is not new. There have always been rich and poor, but our country’s current concentration of income and wealth is much greater than it used to be – or should be. Another myth is that the rich deserve more because they are “job creators.” But many of America’s wealthiest inherited their money. For example, the six Walmart heirs have more wealth than 40% of Americans combined.
The truth is, there are so many ways the system is rigged against regular, working people. Here are just a few of the reasons the average CEO has a massive paycheck while many ordinary Americans languish economically.
1. Trade deals that work against us.
Put simply, we got tricked into approving “free trade” deals that rigged the rules to allow companies to escape the borders of our democracy, with its good wages and worker safety and environmental protections. We let companies move production to places where people don’t have rights and the environment is even less protected, and then let them bring the same product or service back here to sell for the same price!
This made the fruits of democracy—good wages and benefits and strong regulations to protect us and the environment—into a competitive disadvantage.
We were told that protecting our good pay and benefits and environmental regulations was a bad thing economically because it was “protectionist” so we stopped protecting these things. Now look at us.
With these trade deals in place the owners/executives of companies could lay people off or pay minimum wages with no benefits under the threat of being laid off if they tried to do something about it. The trade deals let them pocket the wage and regulation differential for themselves. The result? More to the top few and less for the rest of us.
Many try to frame this as inevitable and unstoppable. They call it “globalization,” as if that is something that just happened, as a product of the progress of technology. They say “it’s a global world now and there’s nothing we can do about it.” But this was a global world when the first ship sailed across a border, and the first camel caravan crossed a desert. All we have to do is demand balanced and fair trade. (In one 2006 plan to balance trade, senators Russ Feingold and Byron Dorgan proposed the Balanced Trade Restoration Act of 2006, similar to a plan proposed earlier by Warren Buffett. The idea was simple, exporters would receive a certificate stating the value of what they had sold which they could sell to importers. Importers could not import without a certificate. So imports and exports would be balanced, and the value of the certificate would help exporters.)