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Thursday, 14 May 2015 07:31

CEO-to-Worker Pay Rises to a Ratio of 373-1, AFL-CIO Finds

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aeconomyceo(Photo: seiuhealthcare775nw)

The AFL-CIO just released its executive compensation study covering 2014, and the chasm between workers' and CEOs' pay is rising at an alarming rate.  According to the McClatchy Washington Bureau, the gap continues to "soar":

The ratio jumped to 374-to-one in 2014, up from 331-to-one in 2013, the union report said, noting that back in 1980 it stood at 42-to-one....

[The figures take on new] importance...as economists and policymakers debate the cause of anemic wage growth. Income has been largely stagnant for workers, even as millions of new jobs have been created and the unemployment rate now stands at 5.4 percent.

[The CEO pay] increase of 15.6 percent over the prior year [is] well above the sub-par annual wage growth for workers that’s below 3 percent.

In short, with all the talk of closing the income inequality gap, it is only getting vastly worse, according to the AFL-CIO study.

On the AFL-CIO Executive Paywatch website, Walmart is used as a case study demonstrating income disparity between CEOs and workers:

Walmart CEO Doug McMillon received $19,392,608 in total compensation. In comparison, the average production and nonsupervisory worker in the U.S. made $36,134 in 2014. Doug McMillon made 536 times the U.S. average rank-and-file worker's pay.

As a counterpoint to McMillon's salary, Executive Paywatch offers the testimonial of Tiffany, a Walmart worker:

I worked at Walmart for almost three years as a customer service manager in Laurel, Md., after working at a Walmart store in Louisiana. I am a proud wife and a mother of two girls.

In 2013, I earned about $12,000 as a full-time employee. These poverty wages force my family to receive public assistance. Currently, we are enrolled in the public health care program for low-income families and the Women, Infants, and Children (WIC) program for my infant daughter.

The pay disparity between the top corporate earners and the workers is shameless. And the US taxpayer is actually subsidizing the profits of large corporations such as Walmart; we're paying for the survival programs that underpaid employees must turn to for support. Without these crucial programs, many employees would not have enough money to put food on the table.

In fact, Walmart depends on government programs in multiple ways. In February of 2014, a BuzzFlash commentary noted, "Walmart is claiming that its sales dropped in the fourth quarter because the government has cut back on food stamps, also called the Supplemental Nutrition Assistance Program (SNAP)."

As BuzzFlash documented in an April 2015 commentary, six Walmart heirs have assets that exceed the combined economic worth of the bottom 40 percent of the US population. This is a stunning fact with profound implications:

There are much larger issues of financially restructuring the US economic system to be debated than just returning to the status quo before the great income shift facilitated by neoliberal economics. However, as a practical reality, for the 2016 election, the discussion is going to be limited to those who claim that they are advocating increased "economic opportunity" and a much smaller group of politicians who call for an economic redistribution of wealth back to the workers and poor of the United States.

Listen closely, because that distinction is a vital one to the majority of people in the nation.

Expanded "economic opportunity" is a misleading siren song, because if the idea had any merit, we would have seen a vast expansion of "economic opportunity" in the last 35 years. Instead, we have seen a growing concentration of wealth in the hands of a few - and stagnant and decreased wages for the vast majority of the rest of the nation.

The pay-gap statistics released by the AFL-CIO this week are further confirmation that only true systemic economic change can lead us to a just income distribution in the US.

Not to be reposted without permission of Truthout.