The “take away” soundbite is that “corporate CEOs have been taking a greater share of the economic pie” as wages remain stagnant for working stiffs. The “proof” is evidenced in 331-to-1 gap in compensation between the nation’s CEOs and average workers.
That particular finding emboldened the House Democratic Caucus to rally behind the “CEO/Employee Pay Fairness Act.” If the Caucus has its way, a public company would be prevented from deducting executive compensation over $1M unless it also provides rank-and-file employees raises in compensation that keep pace with the cost of living and labor productivity.
Whenever a Democrat inserts the word “fairness” into a Congressional bill, it’s time to probe the allegations giving rise to the stormy petrels and their caterwauling.
According to the Wall Street Journal, the AFL-CIO calculated the pay gap based on 350 S&P 500 CEOs. Sounds impressive. However, that sample represents .14% of U.S CEOs in 2013 (N=~249k). That’s .14%, not 1.4%, or 14%. It’s .14% (or 86% less than 1%).
The Bureau of Labor reports that the average annual salary for U.S. CEOs is $178.4k as compared to the ~$35.3k annual salary the AFL-CIO claims the average American worker earns.
So, do the math: That’s a 5-to-1 pay gap, hardly the 331-to-1 pay gap touted by the AFL-CIO union bosses and their compliant minions in the mainstream press.
This particular slice of the "economic pie" is not stagnant salaries for others. In fact, if the entire executive team of Yum Brands was to “spread the wealth around”—as 2008 presidential candidate Barack Obama famously said to Joe the Plumber while on the stump—by taking $0.00 in compensation, Yum Brand employees would receive a .05/hour pay raise (~$900/year) or a 2.78% raise.
Hardly the 333-to-1 difference touted by the AFl-CIO’s stormy petrils.
Want to know what's stagnating salaries? Begin with Obamanomics.
Let the discussion begin…
To read the Wall Street Journal article, click on the following link:
"About That CEO/Employee Pay Gap."