Saturday, March 6, 2010

Are stagnant wages the result of huge increases in CEO salaries?

I'd like to see a study that looks at the stagnant (or even falling) wages of the average American worker in relation to the sharp increase in the compensation to CEO's and other top executives. According to the Economic Policy Institute, ""in 1965, U.S. CEOs in major companies earned 24 times more than an average worker. In 2005, the average CEO in the United States earned 262 times the pay of the average worker, earning more in one day than the average worker in a whole year." It's probably even more today.

Just as a thought experiment, Company A pays its top execs an extra $40 million a year in total compensation compared to what they would have been paid relative to the average worker in say 1968. Now take that $40 million a year and distribute it to your lowest salaried workers in the form of a pay raise, say $2,000. That's 20,000 workers that see their wages rise within the company. And that's a $2,000 increase every year. Good-bye to stagnant wages.

On paper, it sounds quite convincing, though I'd like to see the data on actual companies. This area seems ripe for research, if it hasn't been done already.

Given Tonelson and Kearns recent NY Times OP-ED in which they point out quite convincingly that we are incorrectly measuring worker productivity because we don't measure the off-shore worker hours, it seems possible that the top executives are simply replacing higher wage American labor with cheap, foreign labor and pocketing the difference in cost. The CEO-Media Complex is entrenched. That's why we need the research to support a move toward more shareholder and worker say in executive compensation. Again, the German model seems like a viable alternative.

Our CEO-Media Complex is giving all the credit (and the money) to top execs. All companies are teams, and everyone plays a role. If a company does well, all employees should be rewarded and it could be argued that they average worker on the front lines should be rewarded as much or more than the top executives.

Instead, we laud CEO's like former GE CEO Jack Welch in our press giving them far too much credit. As recent history has shown, Welch's business decisions for which he was praised and put on countless magazine covers (as well as given millions in a sweetheart retirement package that continues to this day) were actually detrimental to GE in the long run, as well as detrimental to our environment and our country. That's just one example.

I'm not an economist, just a concerned citizen and employee disgusted with rising executive pay at great cost to the average worker. I'd love to hear your thoughts.

10 comments:

raybanoutlet001 said...

longchamp handbags
air jordan retro
air jordans,cheap air jordans,air jordan shoes,air jordan 11,air jordan 13,air jordan 6,air jordan 4
lacoste outlet
michael kors outlet store
nike roshe run
discount sunglasses
adidas stan smith uk
adidas stan smith men

raybanoutlet001 said...

adidas nmd runner
michael kors handbags wholesale
ralph lauren outlet online
kobe 9 elite
michael kors handbags
cheap michael kors handbags
michael kors handbags
michael kors handbags sale
cheap jordans
michael kors handbags

adidas nmd said...

supra shoes
nike shoes
replica watches
ecco shoes
pittsburgh steelers jersey
coach
ray ban sunglasses
michael kors handbags
michael kors
oakley sunglasses wholesale

Unknown said...

nike outlet
polo ralph lauren
michael kors uk
houston texans jerseys
chaussure louboutin
coach outlet
mbt shoes online
basketball shoes
ralph lauren pas cher
ugg outlet

adidas nmd said...

michael kors outlet
browns jerseys
bengals jersey
ralph lauren uk
christian louboutin shoes
moncler jackets
oakley sunglasses
ferragamo outlet
hugo boss suits
ray ban sunglasses

chenlili said...

adidas superstar
polo ralph
burberry outlet canada
oakley sunglasses
mcm bags
adidas outlet
supreme
air max 270
louboutin
adidas football boots
20183.23chenjinyan

Unknown said...

nike flyknit racer
goyard handbags
converse outlet store
nike basketball shoes
derrick rose shoes
balenciaga
nike air force 1
hermes belt
longchamp bags
jordan retro 12

Unknown said...

zzzzz2018.7.11
canada goose jackets
prada shoes
ralph lauren outlet
nike chaussure
nike air max 90
golden goose sneakers
valentino shoes
pandora charms outlet
polo ralph lauren
christian louboutin shoes

qqqqqq said...

0822jejeA été inspiré basket nike air max bw solde par la chaussure pour s'habiller dans quelque chose qui reflète ses caractéristiques uniques. A été basket nike internationalist noir inspiré par la chaussure pour mettre quelque chose qui air jordan 11 low philippines reflète ses caractéristiques uniques. Nike Shox Deliver se tourner vers air jordan future gs femme les équipes cette année, ne vous attendez pas à ce achat soldes basket nike moins cher que Dwayne Wade fasse quelque chose de radical sur le marché de la chaussure nike blazer basse femme pas cher chaussure.

Unknown said...

www0906

canada goose outlet
golden goose
jordan uk
ecco shoes
true religion
coach outlet
coach outlet online
christian louboutin shoes
ugg outlet
clarks shoes