CEO of Walmart Makes in One Hour What the Average Employee Makes In a Year: How Skyrocketing Inequality Is Hurting America
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S. Robson “Rob” Walton, Walmart chairman, has a net worth of about $19.7 billion. And he's only number 9 on the list of 2010's top 20 richest Americans.
Walmart workers, meanwhile, make around $8.75 an hour—about $18,000 a year. They'd have to work over a million years to approach what the chairman of Walmart Stores is sitting on. Alice and Jim Walton each have about $20 billion, and Christy Walton has $24 billion.
Last year Jonathan Turley noted that the CEO of Walmart, Michael Duke, makes his average employee's yearly salary every hour.
A new report by the Washington Post on “Breakaway Wealth” contains new research by economists Jon Bakija, Adam Cole and Bradley T. Heim, who analyzed tax returns from the top 0.1 percent of earners in the U.S. That top percentile takes home more than 20 percent of the personal income in the country, and their average income is $5.4 million. The average income of the bottom 90 percent, according to the Post, is just $31,244.
The news that the income gap is growing in the United States is probably not news at all to most working people. But this data throws the trend into sharp relief. Surprise, surprise, they're mostly not media personalities or athletes (just 3 percent). They're chief executives and managers (41 percent), and of course they work in finance (18 percent)--the same executives who are benefiting nicely from policies that have favored the rich and tilted the playing field in their favor, maintaining low personal and corporate tax rates and in some cases actually bailed their companies out with government funds.
Executive pay has been heading sharply upward since the 1970s, but at the moment the gap looks especially ugly as unemployment stagnates and real wages decline, as conservatives attack union pay and benefits and Congress has Social Security, Medicaid and Medicare in its sights.
Moreover, it's not an inevitable result of the invisible hand of the free market. The Postwrites:
“What the research showed is that while executive pay at the largest U.S. companies was relatively flat in the ’50s and ’60s, it began a rapid ascent sometime in the ’70s.
As it happens, this was about the same time that income inequality began to widen in the United States, according to the Saez figures.
More importantly, however, the finding that executive pay was flat in the ’50s and ’60s, when firms were growing, appears to contradict the idea that executive pay should naturally rise when companies grow.
This is a 'challenge for the market story,' Frydman said.”
The Postoffers one other possible explanation. Economists theorize that the “social norms that once reined in executive pay” are gone. A dairy executive the Post lovingly describe from the 1970s turned down raises several times, saying that he made enough money. There are few such protestations from today's multimillionaires.
We got the New Deal during the Great Depression, let's not forget, less because we had benevolent overlords than because the wolves were at the door. Communism had come to Russia; unions were strong and many run by socialists themselves. The New Deal was a compromise position between the threat of communism, organizing by progressive and socialist activists aligned with labor, and the pushback from business. And during the '50s and '60s, while executive pay was less exorbitant, those New Deal programs were still strong and unions had organized over 30 percent of the workforce. (Even now, the median wage for union workers is more than $10,000 a year more than non-union.)