The big bosses are taking all the money! USA Today dutifully reports: “CEOs in the AFL-CIO’s pay database released Wednesday earned an average of $13.5 million last year, which is 373 times more than the $36,000 per year paid to the average production and nonsupervisory worker, says the AFL-CIO. CEO pay in the AFL-CIO study increased 16% in 2014.”
According to the union, that CEO-to-worker pay ratio pay is “simply unconscionable. … It doesn’t have to be this way. Lawmakers should raise the minimum wage and protect U.S. workers by not engaging in bad trade deals. Corporations should pay their employees a living wage. And workers should have a collective voice on the job to demand their fair share.”
But before we do all that supposedly wonderful stuff that the AFL-CIO wants us to do, let’s take another look at those numbers. As my AEI colleague Mark Perry points out, you really shouldn’t compare — as the AFL-CIO does — the wages of the average worker to the compensation of CEOs at a few hundred, large companies, often multinationals. In 2014, the BLS reports that the average pay for America’s 250,000 chief executives was only $181,000. So the CEO-to-worker pay ratio for the average CEO compared to the average worker is only about 4, not nearly 400.
And if you calculate the CEO-worker pay ratio at the 100 largest US companies — which I did using 2013 PayScale data — it works out to 79-to-1 — a fraction of what the exaggerated AFL-CIO analysis finds. Only five companies had a ratio of over 200-to-1, by the way, that year.
Friday, May 15, 2015
Untrue Statements From Unions? I'm (not) Shocked.
I would suggest a refresher course in arithmetic: