Executive Pay
In 1999, the average corporate top executive was paid 419 times as much as the average factory worker, up from a ratio of 42-to-1 in 1980. After the dot.com bubble burst, the executive pay bubble burst as well right? Wrong. According to Business Week, the average CEO still made 411 times the average factory worker in 2001.
Had worker pay risen at the same pace as executive pay did in the 1990s, the average production worker would have been making more than $110,000 a year at the end of the decade compared with the $29,000 the worker actually made.
The federal minimum wage would have been around $22.00 an hour, not the current $5.15.
The Institute for Policy Studies (www.ips-dc.org) and the group United for a Fair Economy (www.ufenet.org) said the average annual compensation for a chief executive of a large company was $10.6 million in 1998, a fivefold increase from the $1.8 million of 1990.
How much would you be making if your pay had grown as much as CEO pay has? Between 1980 and 1998, the average pay of regular working people increased 68 percent. In contrast, CEO pay grew a whopping 1,596 percent! According to Business Week, the average CEO of a major corporation made $10.6 million in 1998. If CEO pay continues to grow at that rate over the next 50 years, the average CEO would be paid more than 150,000 times what a typical factory worker would make.
Heres what a minimum wage paycheck would be like today if it had grown at the same rate of increase as an average CEOs? If your 1994 annual pay was $15,000, you would be in luck. Today you would be making an amazing $297,904! These figures were calculated based on 1994-1998 data published in Business Week.
Sources: Business Week, May 6, 2002, Special Report — The Crisis in Corporate Governance, www.businessweek.com; Northwest Labor Press, Chief Executive Officers’ Pay Exploded in 1990s, www.nwlaborpress.org/12-03-99CEO.html.
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