It’s True: Your Boss Is Making More Than You Do. Maybe 3,101 Times More.
The wage gap is only getting worse, the Economic Policy Institute finds.
An Occupy Wall Street protest in 2011. (Paul Stein / CC BY-SA 2.0)
There’s new data to back up the nagging feeling that millions of U.S. workers experience every payday: Their bosses really are making hundreds of times the amount the average worker does.
On average, that would be 312 times, according to a new report from the Economic Policy Institute, which analyzed the 2017 compensation of chief executives from America’s 350 top companies.
The disparity, The Guardian explained Thursday, “came after the bosses of America’s largest companies got an average pay rise of 17.6% in 2017, taking home an average of $18.9m in compensation while their employees’ wages stalled, rising just 0.3% over the year.”
It’s a gap that’s been widening since the 1990s, the article continues: “In 1965, the ratio of CEO to worker pay was 20 to one; that figure had risen to 58 to one by 1989 and peaked in 2000, when CEOs earned 344 times the wage of their average worker.”
There was a brief dip in CEO pay in the early 2000s, the report found, but it’s been steadily rising once again since 2009.
New financial disclosures rules allowed the EPI to bring this information to light. It compels companies to publish the ratio of CEO-to-worker pay. The rule, a Washington Post article explained this year, was part of the 2010 Dodd-Frank legislation passed in the wake of the 2008 financial crisis.
It took until 2015 for the disclosure rule to be finalized, the Post explained, because of resistance from business advocacy groups “that said it would be onerous and expensive to calculate.” In addition, the Post continues, “the rule was thought to be a goner after the 2016 election, when a Republican-controlled Congress and a White House whose transition team had promised to ‘dismantle’ Dodd-Frank came to power.”
It survived unscathed and, The Guardian explains, allowed American workers to confirm their worst suspicions about CEO pay:
Last year McDonald’s CEO Steve Easterbrook earned $21.7m while the McDonald’s workers earned a median wage of just $7,017–a CEO to worker pay ratio of 3,101-to-one. The average Walmart worker earned $19,177 in 2017 while CEO Doug McMillon took home $22.8m–a ratio of 1,188-to-one.
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