The labor union, AFL-CIO, released its annual report Tuesday documenting what CEOs are making. The Paywatch report found that in 2015, CEOs made 335 times more than the average of nonsupervisory workers.
The study of American S&P 500 companies also showed that CEOs make over 800 times more than minimum wage workers, and 242 times more than union workers. 24/7 Wall St reported that while CEOs were making an average of $12.4 million in 2015 (down from $13.5 in 2014), a nonsupervisory worker earned, on average, around $36,900.
The union says that the figure for nonsupervisory workers compared to CEOs has been adjusted for inflation and reflects the stagnation in wages seen in the United States for nearly 40 years.
The wealth gap between CEOs and their employees is not a new concern, but wealth disparity and CEO pay has been made a key issue in 2016 by presidential candidates like Bernie Sanders, Jill Stein, and even Donald Trump criticizing what CEOs are making versus their employees.
The Washington Examiner, last month, featured Democratic candidate Bernie Sanders sounding off on Verizon CEO Lowell McAdam, whose company is currently facing a strike of up to 40,000 workers, about McAdam’s earnings which made him over $18 million last year, almost 500 times more than the average worker, while pursuing outsourcing.
“What I think is contemptible is CEOs with multimillion dollar compensation packages, presiding over extremely profitable companies, and still refusing to give their employees fair contracts.”
A key point to Sanders’ rhetoric, as well as those who agree, is that while worker wages have mostly stagnated since the 1970s, CEOs making 335 times more than their employees today continues an increasing trend. In 1980, CEOs made 42 times more than the employee average; by 1990, CEOs made 107 times more. Though much less of an issue in the 2012 election, CEOs made record profits during that year.
AFL-CIO included information on S&P 500 CEOs helping their companies avoid taxes. The union lambasted those CEOs who make many more times the earnings of their employees for creating more jobs overseas than in the U.S., as well as working over the middle class.
“The income inequality that exists in this country is a disgrace. We must stop Wall Street CEOs from continuing to profit on the backs of working people,” said AFL-CIO President Richard Trumka. “Last month, when I stood with the Carrier workers in Indianapolis whose jobs making home heating furnaces are being shipped to northern Mexico, I saw firsthand how corporate greed destroys communities. Carrier is a subsidiary of United Technologies and its CEO Gregory Hayes made nearly $10.8 million in 2015. It’s shameful that a CEO can make that type of money and still destroy the livelihood of the hardworking people who make the company profitable.”
Responses in defense of CEOs earnings have argued points such as companies needing to pay their CEOs such high salaries for fear that they may seek jobs elsewhere, as well as how top investors routinely agree on increasing what CEOs are making, adding up to amounts many more times the average workers’ incomes. The Hill noted defenses of what CEOs were making.
“Companies and their shareholders must acquire the talent needed to run a successful business. CEO pay is set through a dialogue of investors, directors and management. Painting with a broad brush misses these points and what is needed for the long-term success of a business and its shareholders,” Tom Quaadman, senior vice president of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness, said. “The more that ratios are used to embarrass businesses the more we will see the continued decline of public companies in the United States.”
[Photo by Mark Lennihan/AP Images]