As a labor shortage rages in nearly every industry, we see reports suggesting that wages are increasing in many areas to attract workers. In fact, just this week we learned that the average pay for grocery and restaurant workers has topped $15 an hour for the first time.
But would it surprise you to learn that as wages inch up for the lowest paid, that they’re going up at the executive level as well? Probably not.
A new report issued by the Economic Policy Institute has tracked CEO pay back to 1978 and says that the average chief executive’s pay has grown 1,322% in that time period. And while that’s certainly a long span of time -- more than 40 years -- the average worker’s pay has grown a mere 18 percent during that same time period.
This means the average CEO makes $351 for every dollar the average worker does… and though a recent report in Forbes says wealth increased for the ultra-wealthy to the tune of $5 trillion during the pandemic, EPI points out that the CEO-to-worker pay ratio isn’t even the highest it’s ever been. That happened in 2000, when it was 366-to-1.
And even if you’re at the bottom rung of this lop-sided ladder, you’re not alone: the report says that even the top .1% of workers -- those just below the chief exec category -- still make about 6 and a half times less, putting CEOs, according to the report’s author Lawrence Mishel, “in their own stratosphere.”
But there’s hope. EPI says that the existing labor shortage will continue to put pressure on companies to increase wages and benefits for even their lowest paid workers and that could shift some power in the direction of the rank-and-file which is, says Mishel, “something they desperately need.”
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