Bipolar Nation: The Rich Get Richer
Times are tough. Do the numbers: Chief executive officers (CEOs) of the country’s biggest companies experienced pay increases of a minuscule 15 percent in 2012, compared with the 28 percent their pay rose in 2011.Only 15 percent. Ah! I’m sure they’ll make it up in bonuses and stock options this year. The rich will get richer and the poor will get porridge, cold porridge.Those statistics are from GMI, Global Market Insite. Meanwhile, the earnings of workers (adjusted for inflation) declined by 2 percent, according to the U.S. Department of Labor. You might say there’s a trend, or a tidal wave. CEO compensation has increased by more than 725 percent since 1978. In that same period, the compensation for “average” workers in their companies has increased by less than 6 percent. One might even say that the folks running companies are running down the country, or at least everyone else, with the possible exception of professional athletes and other entertainers.Looking at it another way, the Pew Research Center, studying new census data, reported last Tuesday that from 2009 to 2011, average wealth among the top 7 percent of the country rose by 28 percent — that number again. Boy, these recessions are tough, at least for the other 93 percent, whose wealth declined by 4 percent in the same period.My favorite statistic on earnings is the ratio between the compensation of American CEOs and American workers. I traveled the country in the late 1970s and early 1980s collecting data on that ratio. What I found then was that the big bosses in America were paid approximately 20 to 30 times as much as their average employee. At that time, I checked the ratio for other developed countries, basically in Western Europe. There the ratio ranged from about eight to 12 times what their employees made.American figures, available for publicly owned companies, indicate that the CEO-to-worker earnings ratio is now more than 200-to-1. That means bosses are now paid 200 times more than their “average” employees. The ratio, or earnings gap, has increased by more than 750 percent. To put it another way, CEO pay has grown 127 times as fast as employee pay. For the record: The ratio in Great Britain is 22-to-1. In France it is capped, by law, at 15-to-1. In Germany it is capped at 12-to-1.
© 2013 UNIVERSAL UCLICKWait, before you go…
If you're reading this, you probably already know that non-profit, independent journalism is under threat worldwide. Independent news sites are overshadowed by larger heavily funded mainstream media that inundate us with hype and noise that barely scratch the surface. We believe that our readers deserve to know the full story. Truthdig writers bravely dig beneath the headlines to give you thought-provoking, investigative reporting and analysis that tells you what’s really happening and who’s rolling up their sleeves to do something about it.
Like you, we believe a well-informed public that doesn’t have blind faith in the status quo can help change the world. Your contribution of as little as $5 monthly or $35 annually will make you a groundbreaking member and lays the foundation of our work.Support Truthdig