The chasm between CEO and worker pay hurts society
February 14, 2014 12:00 AM
Poor Dave Majernik (“Inequality Gimmick,” Jan. 31 letters). He’s feeling very tender toward our wealthy brothers and sisters. I hope that I can ease his pain for these poor unfortunates so that he doesn’t have to stay up nights worrying about them.
Let’s start with CEO compensation. In 1980, CEO compensation was 42 times that of the average worker. Today it is 354 times greater even though worker productivity has increased 80 percent over that time. CEO compensation in Japan, Germany, France, Italy, Canada, South Africa, Britain, Mexico, Venezula and others are considerably lower. Despite the increase in productivity, the median income for workers in the United States has actually dropped by $4,000 since 2001 if adjusted for inflation. As worker productivity goes up, so does CEO compensation but not worker compensation.
The wealthy? Well, they are doing really well. The richest 5 percent own 82 percent of all stocks. During the current recovery, 95 percent of the wealth has gone to the top 1 percent. The top income tax rate was at an all-time high during the Eisenhower administration at 91 percent. Even under Nixon the top rate was 70 percent and under St. Ronald was at 50 percent for most of his two terms. It now sits at 35 percent, so the wealthy are keeping more and making more.
Income inequality is real and is a danger to our democracy.
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