HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » Latest Breaking News (Forum) » CEOs rake in 940% more th...

Wed Aug 14, 2019, 12:19 PM

CEOs rake in 940% more than 40 years ago, while average workers earn 12% more

This discussion thread was locked as off-topic by Yonnie3 (a host of the Latest Breaking News forum).

Source: CBS News

The chasm between what the country's corporate leaders and their workers earn is widening to Grand Canyon-like proportions, according to new research that shows CEO compensation surged 940% between 1978 to 2018 while the average worker saw a meager 12% pay hike over the same 40-year period.

"CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills," economist Lawrence Mishel and research assistant Julia Wolfe said in the report from the Economic Policy Institute, a left-leaning think tank.

Depending on how it's calculated, the average pay of CEOs at the 350 biggest U.S. companies last year came to $17.2 million, the EPI research found. (Or, alternatively, about $14 million, with the smaller number valuing the stock options that make up a big chunk of CEO pay at the time they were granted rather than when they were cashed in at typically higher prices.)

Last year chief execs got $278 for every $1 a typical worker earned, according to Mishel and Wolfe. Back in 1965, top corporate chiefs earned $20 for every dollar a typical worker earned, with that ratio rising to 58-to-1 by 1989. The gap widened dramatically in the following decades, they noted, due to a shift in the 1990s and 2000s to compensate CEOs mostly with stock options, restricted shares and other incentive-based pay fueled a spike in their earnings.

Read more: https://www.cbsnews.com/news/ceo-pay-in-940-more-than-40-years-ago-workers-make-12-more/



Once again..... CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills

18 replies, 1198 views

Cannot reply in locked threads

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 18 replies Author Time Post
Reply CEOs rake in 940% more than 40 years ago, while average workers earn 12% more (Original post)
groundloop Wednesday OP
sandensea Wednesday #1
empedocles Wednesday #4
geardaddy Wednesday #5
IronLionZion Wednesday #2
George II Wednesday #6
IronLionZion Wednesday #8
SharonAnn Wednesday #14
yerop Wednesday #3
George II Wednesday #7
progree Wednesday #12
BigmanPigman Wednesday #13
progree Wednesday #15
yerop Thursday #16
progree Thursday #17
AllaN01Bear Wednesday #9
mpcamb Wednesday #10
appalachiablue Wednesday #11
Yonnie3 Thursday #18

Response to groundloop (Original post)

Wed Aug 14, 2019, 12:39 PM

1. 'We're going to move ahead, without leaving anyone behind'



Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to sandensea (Reply #1)

Wed Aug 14, 2019, 12:48 PM

4. 'ReaganHood', who gave to the rich, by robbing the poor and most others - was key

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to empedocles (Reply #4)

Wed Aug 14, 2019, 02:23 PM

5. He should have stuck to lupines

This redistribution of wealth is trickier than it looks . . .

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to groundloop (Original post)

Wed Aug 14, 2019, 12:42 PM

2. Then you should have been a CEO. Workers made the wrong choice.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to IronLionZion (Reply #2)

Wed Aug 14, 2019, 02:25 PM

6. I was an engineer for 41 years, my salary went up more than 950% during that time.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to George II (Reply #6)

Wed Aug 14, 2019, 02:27 PM

8. What's your specialization?

Some tech fields have seen that kind of growth

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to George II (Reply #6)

Wed Aug 14, 2019, 06:45 PM

14. As an engineer at the same level? Or did you get promotions, move into management, etc.

The CEO's are still CEO's. They didn't get promoted. They just set their pay higher.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to groundloop (Original post)

Wed Aug 14, 2019, 12:44 PM

3. But even that 12% more doesn't take into account higher rents, tuition, medicine prices, etc.

which is why we need real economic change

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to yerop (Reply #3)

Wed Aug 14, 2019, 02:25 PM

7. It also doesn't take into account the different jobs 40 years ago vs. now.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to yerop (Reply #3)

Wed Aug 14, 2019, 03:26 PM

12. They are inflation-adjusted numbers, expressed in 2018 dollars

No, unfortunately the CBS news report in the OP doesn't say that. One has to get the full Economic Policy Institute report at
https://www.epi.org/files/pdf/171191.pdf

and search on "inflation", and "2018$" -- that gets them all I think (I also searched on "real" and "adjust" and a few others).

For the average or typical worker, they use --

For comparison, Table 2 also presents the average annual compensation (wages and benefits of a full-time, full-year worker) of a private-sector production/nonsupervisory worker (a group covering more than 80% of payroll employment), allowing us to compare CEO compensation with that of a typical worker. From 1995 onward, the table also identifies the average annual compensation of the production/nonsupervisory workers corresponding to the key industry of the firms included in the sample. We take this compensation as a proxy for the pay of typical workers in these particular firms and use it to calculate the CEO-to-worker compensation ratio for each firm.


Here is the BLS series for production and nonsupervisory employees -- I'm not sure these are exactly what they used, but they show both the wages in nominal dollars and in inflation-adjusted dollars.

At the top of the page one can set the dates to whatever date range one wants. Interesting to set it back to 1970 ...

Average Weekly Earnings Of Production And Nonsupervisory Employees, total private, ((in current dollars aka nominal dollars aka "greenbacks" ))
https://data.bls.gov/timeseries/CES0500000030

If one sets the start date back to 1970, one can see that earnings have greatly increased

Since the EPI report headlined numbers is the 1978-2018 period, I'll just pick July numbers for these years:
July 1978 $ 211.81
July 2018 $ 767.60
For a 3.62-fold increase (which is a 262% increase)

And this is the corresponding inflation-adjusted one:

Total Private Average Weekly Earnings of Production and NonSupervisory employees, 1982-1984 Dollars,
https://data.bls.gov/timeseries/CES0500000031

If one sets the start date back to 1970, one can see that inflation-adjusted earnings peaked in about 1973 -- the highest number in the table I can see is $345.95 in February 1973.

It bottomed out in 1990-1996 (just looking at the graph), and it has increased steadily since, but the latest (July 2019) it is only $314.67, so yes, it's buying power has dropped 9.04% over the years (February 1973 to July 2019).

Since the EPI report headlined numbers is the 1978-2018 period, I'll just pick July numbers for these years:
July 1978 $321.90
July 2018 $312.45
For a 2.9% DECREASE. Hmmm.

So what the above says is the average production and non-supervisory worker lost 2.9% of their buying power over these 40 years, despite a 3.62-fold increase in their nominal dollar earnings.

The CPI (CPI-U) has increased from 65.50 in July 1978 to 251.597 in July 2018 -- a 3.84-fold increase (which is a 284% increase)
http://data.bls.gov/timeseries/CUSR0000SA0

Anyway, it is certainly grossly unfair that all (or virtually all depending on what data one uses) of the productivity gains of 40 years and very substantial increases in real GDP per capita has gone to the top few.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to progree (Reply #12)

Wed Aug 14, 2019, 06:39 PM

13. This is good info. I didn't know this.

It makes me miss my dad even more since we liked to discuss this type of economic stuff. Actually it was more like him explaining it to me (not easy).

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to BigmanPigman (Reply #13)

Wed Aug 14, 2019, 10:49 PM

15. Thanks for that 😃😃😃. It makes putting all that (#12) together seem worthwhile 😃 n/t

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to progree (Reply #12)

Thu Aug 15, 2019, 03:31 AM

16. inflation, yes. But housing prices, tuition, medical costs?

I doubt the 12% puts anyone ahead.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to yerop (Reply #16)

Thu Aug 15, 2019, 08:56 AM

17. That's all included in the CPI, so they say

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to groundloop (Original post)

Wed Aug 14, 2019, 02:53 PM

9. what do these people do(ceos)? seriously , what do they do?

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to AllaN01Bear (Reply #9)

Wed Aug 14, 2019, 02:58 PM

10. Assign blame to lower totem pole dwellers.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to groundloop (Original post)

Wed Aug 14, 2019, 03:20 PM

11. 'It's the stock options, stupid'

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink


Response to groundloop (Original post)

Thu Aug 15, 2019, 09:19 AM

18. Locking after a review by Forum Hosts

The hosts received an a alert that this story is analysis. The hosts agreed.

Latest Breaking News Forum
Statement of Purpose

Post the latest news from reputable mainstream news websites and blogs. Important news of national interest only. No analysis or opinion pieces. No duplicates. News stories must have been published within the last 12 hours. Use the published title of the story as the title of the discussion thread.


A re-post in Editorials and Other Articles or in General Discussion is suggested.

Cannot reply in locked threads

Back to top Alert abuse Link here Permalink