US study lays bare extreme pay-ratio problem

From the Guardian: US income inequality - 'CEOs don't want this released': US study lays bare extreme pay-ratio problem

Excerpt:

In 188 of the 225 companies in the report’s database, a single chief executive’s pay could be used to pay more than 100 workers; the average worker at 219 of the 225 companies studied would need to work at least 45 years to earn what their CEO makes in one.

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It also shows how some of the most extreme disparities in CEO-to-worker pay exist in industries that are considered consumer discretionary, such as fast food and retail, with a 977 to 1 disparity, one of the widest gaps.

“Now we know why CEOs didn’t want this data released,” says Ellison, who championed the implementation of the pay ratio disclosure rule as it was written into the Dodd-Frank financial reform bill of 2010. “I knew inequality was a great problem in our society but I didn’t understand quite how extreme it was.”

“If wealth is being concentrated into fewer and fewer hands, then obviously wealth is being dissipated from more and more people,” Ellison said.

“We have people who are paying more half their income in rent, and we have whole school districts where poverty is erasing any opportunity for Americans to climb that ladder.”

According to a recent Bloomberg analysis of 22 major world economies, the average CEO-worker pay gap in the US far outpaces that of other industrialized nations.

The average US CEO makes more than four times his or her counterpart in the other countries analyzed.

Ellison rejected claims from corporate America that executive suite compensation is a just reward for the skillful exercising of their business talents. “Truth is, they’re doing nothing except extracting value and wealth from hard working people because they have economic advantages.”

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Upper-income taxation (see historical graphic here) was mostly above 90% from 1941 to 1960s. JFK made a BigMistake when he brought it down to 80%. And Reckless Ronnie became a Replicant saint when he sent them down to the 30% range.

Whichis the single-most reason why Wealth has skyrocketed for this very select group who are nonetheless just 0.1% of the nation's population. (See that fact demonstrated here where Prof. Domhoff of UofC showed clearly in his Who Rules America web-site accessible from here.)

How do you like living in a country where the bottom 80% of the population own only 11% of the nations total Net Worth* - and top 20% of us own the other 89%?

Seems fair to you? Not to me ...

*Which is essentially all Wealth minus Debt.

Lafayette said:

From the Guardian: US income inequality - 'CEOs don't want this released': US study lays bare extreme pay-ratio problem

Excerpt:


Upper-income taxation (see historical graphic here) was mostly above 90% from 1941 to 1960s. JFK made a BigMistake when he brought it down to 80%. And Reckless Ronnie became a Replicant saint when he sent them down to the 30% range.

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Except no one paid those rates. in 1952 the effective rate was 42% for the top 1%. in 2014 the effective rate was 36% an insignificant
difference.

Whichis the single-most reason why Wealth has skyrocketed for this very select group who are nonetheless just 0.1% of the nation's population. (See that fact demonstrated here where Prof. Domhoff of UofC showed clearly in his Who Rules America web-site accessible from here.)

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Actually it isn't. the biggest reason wealth has skyrocketed is investment. those that invest and those that don't.
the biggest movement of middle class wealth investment came during the 80's and 90's when interest rates were through the roof.
https://www.bankrate.com/banking/cds/historical-cd-interest-rates-1984-2016/

From 1970-1980 the investment into CD and bonds earned people millions of dollars.
you will see the wealth gap increase as savings percentages decrease. why?
there is no reason to save and most people have no clue about investments.

How do you like living in a country where the bottom 80% of the population own only 11% of the nations total Net Worth* - and top 20% of us own the other 89%?

Seems fair to you? Not to me ...

*Which is essentially all Wealth minus Debt.

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Life isn't fair. YOu want to be more successful then invest invest invest.
lower your debt and save more than you spend.

that is how wealth is created. YOu will find that most people that are wealthy live well below their means.
54% have college diploma's.

if you look at the typical minimum wage worker most do not even have a high school diploma or only a high school diploma.

you need to stop your class warefare it does nothing.

ludin said:

you need to stop your class warefare it does nothing.

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No way, José.

When 14% of American men, women and children are confined below the Poverty Threshold? Nope, never.

The idiocy of earning bundles of money is evident. Who needs more than a million to live very well. All the rest is "show".

And why is accumulating billions so much of a wonder in the US. Who the f**k really cares?

(You can't take it with you.)

America is increasingly barren of its True Values, if it ever had any besides financial glory. Everything, everywhere is measured in units of money. As if that was the only measure on earth. When of course it isn't. I can think of dozens of others, but naming them would only bore you.

We've lost our way, and nothing you write will make anyone think there is ample justification for possessing so much when 40 million people below the Poverty Threshold barely possess a pot-to-piss-in ...

Lafayette said:

No way, José.
When 14% of American men, women and children are confined below the Poverty Threshold? Nope, never.

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If those people have at least 1 mode of transportation a roof over their head, indoor plumbing, they are considered the top 1% in the world.

The idiocy of earning bundles of money is evident. Who needs more than a million to live very well. All the rest is "show".

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again why do you hate people that are more successful than you? Jealousy? i do believe it is.
mad because they took the opportunity and you can't? If you spent half as much time actually investing
and saving as you do on this forum complaining and griping then you could be wealthy as well.

They choose to invest and save you choose to grip and complain.

And why is accumulating billions so much of a wonder in the US. Who the f**k really cares?

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Yes i wonder why you care so much.

(You can't take it with you.)

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nope but again who cares. that is the cool thing about freedom. it allows you to do what you would like to do.

America is increasingly barren of its True Values, if it ever had any besides financial glory. Everything, everywhere is measured in units of money. As if that was the only measure on earth. When of course it isn't. I can think of dozens of others, but naming them would only bore you.

We've lost our way, and nothing you write will make anyone think there is ample justification for possessing so much when 40 million people below the Poverty Threshold barely possess a pot-to-piss-in ...

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you like to spout number so here are some for you.

Eighty percent of poor households have air conditioning.
Nearly three-quarters have a car or truck; 31 percent have two or more cars or trucks.
Nearly two-thirds have cable or satellite television.
Two-thirds have at least one DVD player, and a quarter have two or more.
Half have a personal computer; one in seven has two or more computers.
More than half of poor families with children have a video game system such as an Xbox or PlayStation.
Forty percent have a wide-screen plasma or LCD TV.
Ninety-two percent of poor households have a microwave.
Forty-two percent of all poor households actually own their own homes.
The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
Ninety-six percent of poor parents stated that their children were never hungry at any time during the year because they could not afford food.
The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle-class children and in most cases is well above recommended norms.

ludin said:

... again why do you hate people that are more successful than you? Jealousy? i do believe it is.

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You seem to have no capacity to see the Bigger Picture.

This debate is not about you. It's not about me. It's all about us.

Welcome to macro-economics ...

In the 1960s, the pay ratio was 16 to one... I have to go soon, look up pay ratios in Europe.

Now, it's 100 to one, 200 to one, some places it's even higher.

Read Price of Inequality by Stiglitz for the full story.

Lafayette said:

From the Guardian: US income inequality - 'CEOs don't want this released': US study lays bare extreme pay-ratio problem

Excerpt:


Upper-income taxation (see historical graphic here) was mostly above 90% from 1941 to 1960s. JFK made a BigMistake when he brought it down to 80%. And Reckless Ronnie became a Replicant saint when he sent them down to the 30% range.

Whichis the single-most reason why Wealth has skyrocketed for this very select group who are nonetheless just 0.1% of the nation's population. (See that fact demonstrated here where Prof. Domhoff of UofC showed clearly in his Who Rules America web-site accessible from here.)

How do you like living in a country where the bottom 80% of the population own only 11% of the nations total Net Worth* - and top 20% of us own the other 89%?

Seems fair to you? Not to me ...

*Which is essentially all Wealth minus Debt.

Click to expand...

So, a "study" based on around 200 companies proves what? Given that there are over 10,000 public companies in the US I'd say not much.

Why is it a surprise that a person with a complex and highly responsible job gets paid more than the hourly workers in the company? Anyone here willing to take a pay cut so those in your company making less can catch up to you?

Equality means equal opportunity not equal outcome. Most of those top tier guys started on the bottom step. Their first jobs are frequently low skill, low pay ones but they don't stay there. Very few of us do. We work our way up as far as our skills and abilities (and ambition) will take us. Or we find a level we're comfortable with and level out.

the ideology and politics of jealousy and envy are wasteful and, to be frank -idiotic.

Bullseye said:

So, a "study" based on around 200 companies proves what? Given that there are over 10,000 public companies in the US I'd say not much.

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To any real economist it indicates something fishy going on.

Are you in the right "debate forum"? This one is about "economics". (Hint: Where two-hundred companies can indeed be indicative of the larger family as a whole when chose correctly.)

Lafayette said:

To any real economist it indicates something fishy going on.

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No, it doesn't. I've read several comments on "income inequality" and to many economists the "inequality" is the result of meritocracy - people with more skills, training an experience earn more.

Lafayette said:

Are you in the right "debate forum"? This one is about "economics". (Hint: Where two-hundred companies can indeed be indicative of the larger family as a whole when chose correctly.)

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I've seen similar studies like this and the sample set is usually overloaded with the top of the Fortune 500 - which is not indicate of the entire population of corporations and businesses at all.

late said:

In the 1960s, the pay ratio was 16 to one... I have to go soon, look up pay ratios in Europe.

Now, it's 100 to one, 200 to one, some places it's even higher.

Read Price of Inequality by Stiglitz for the full story.

Click to expand...

you tell me why Dwayne the Rock Johnson is paid 22 million per movie, and i will explain why CEO's are paid they they are

gdgyva said:

you tell me why Dwayne the Rock Johnson is paid 22 million per movie, and i will explain why CEO's are paid they they are

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Alright. That is a good one.

Bullseye said:

So, a "study" based on around 200 companies proves what? Given that there are over 10,000 public companies in the US I'd say not much.

Why is it a surprise that a person with a complex and highly responsible job gets paid more than the hourly workers in the company? Anyone here willing to take a pay cut so those in your company making less can catch up to you?

Equality means equal opportunity not equal outcome. Most of those top tier guys started on the bottom step. Their first jobs are frequently low skill, low pay ones but they don't stay there. Very few of us do. We work our way up as far as our skills and abilities (and ambition) will take us. Or we find a level we're comfortable with and level out.

the ideology and politics of jealousy and envy are wasteful and, to be frank -idiotic.

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I am assuming that as is usually the case the professional statisticians selected representative companies as it would be impossible to poll 10,000. Much like trend polls, for goods, services and politics do not ever poll every person in the country.

I distrust your estimate of 10,000 publicly traded companies in the US, it appears made up to me.

If you are going to criticize statistics, you should at least support yourself with stats of your own, stats from believable outlets

gdgyva said:

you tell me why Dwayne the Rock Johnson is paid 22 million per movie, and i will explain why CEO's are paid they they are

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That tells the whole story.

Next

Fearandloathing said:

I am assuming that as is usually the case the professional statisticians selected representative companies as it would be impossible to poll 10,000. Much like trend polls, for goods, services and politics do not ever poll every person in the country.

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As I said, the studies of this nature I've seen don't do that. They use 200 of the biggest.

Fearandloathing said:

I distrust your estimate of 10,000 publicly traded companies in the US, it appears made up to me.

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Come up with your own number then. It's far greater than 200

Fearandloathing said:

If you are going to criticize statistics, you should at least support yourself with stats of your own, stats from believable outlets

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I don't criticize the stated numbers, I question the methodology. As I've said I've seen these "CEO make a gazillion times what their average employ does" and usually they use a small sample of top companies. The exact numbers isn't the point.

gdgyva said:

you tell me why Dwayne the Rock Johnson is paid 22 million per movie, and i will explain why CEO's are paid they they are

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Pay is supposed to be tied to the value an employee adds. I can assure that neither the companies or their CEOs are doing 16 to 30 times better than the 1960s.

gdgyva said:

you tell me why Dwayne the Rock Johnson is paid 22 million per movie, and i will explain why CEO's are paid they they are

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His movies earn money even with his high salary - that's way he gets it.

Ah just as I expected: If you read the Executive Summary of the study you find their same was the Fortune 500. Er, make that the FIRST 225 of the Fortune 500. Not a representative sample.

There are always going to be a few outliers

But here is a chart that might interest some of you

https://www.bloomberg.com/graphics/ceo-pay-ratio/

what is the value of a CEO? and how do you value their worth?

i would want as much as i could get....just like the majority of you would...and what their reps negotiate for them

Fearandloathing said:

I am assuming that as is usually the case the professional statisticians selected representative companies as it would be impossible to poll 10,000. Much like trend polls, for goods, services and politics do not ever poll every person in the country.

I distrust your estimate of 10,000 publicly traded companies in the US, it appears made up to me.

If you are going to criticize statistics, you should at least support yourself with stats of your own, stats from believable outlets

Click to expand...

https://finance.yahoo.com/news/jp-startup-public-companies-fewer-000000709.html

there are about 4.3k publicly traded companies.
which is down from 8k.

The fact is that most ceo's etc have started off at the bottom of the ladder and worked their way up the company ladder.
the other fact is not everyone can be ceo of a company.

Bullseye said:

No, it doesn't. I've read several comments on "income inequality" and to many economists the "inequality" is the result of meritocracy - people with more skills, training an experience earn more.

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And, no doubt, they should.

The argument centers about how much more. And I keep putting up the same damn economic research (here) indicating that too much income is going to too few.

The US has one of the most rank Income Disparities of any "supposedly developed" nation on earth (from FACTS - Global Inequality):



And that is happening because Reckless Ronnie whacked upper-income taxation down from 70% to 30% in the 1980s. ("Wealth" being Net-After-Tax Income".) We need to put them back up to the 95% above a maximum-income level.

Who the hell needs to amass billions upon billions of dollars - just to leave most of it to their children ...

Bullseye said:

I've seen similar studies like this and the sample set is usually overloaded with the top of the Fortune 500 - which is not indicate of the entire population of corporations and businesses at all.

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Yes, of course the LoonyLeft create "artificial" studies to prove how unfair the US is in its distribution of Net Income. Then they stupidly post them on the Internet just waiting to be disproved. (I cannot think of anything more stoopid for a public institution to do.)

Let's see your references to those "studies" that are supposedly top-loaded. You seem to think that people on the Left of the political spectrum are stupid enough to do such. We aren't ...

Bullseye said:

So, a "study" based on around 200 companies proves what? Given that there are over 10,000 public companies in the US I'd say not much.

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Which shows how little you know about the science of economic analysis.

This is an Economics Debate Forum ... perhaps you'd be happier on a Message Board?

Lafayette said:

And, no doubt, they should.

The argument centers about how much more. And I keep putting up the same damn economic research (here) indicating that too much income is going to too few.

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Sorry, no, you "research" doesn't prove anymore than that our economy is based on meritocracy. PS: Piketty is an ultra-liberal looney, who is generally laughed at in mainstream economics.

Looking at the quality of life of those on the lower end of the income scale it's hard to explain why income equality is bad.

Lafayette said:

The US has one of the most rank Income Disparities of any "supposedly developed" nation on earth (from FACTS - Global Inequality):

Click to expand...

Meaningless statistic. Or, maybe not: Maybe it shows that this country rewards hard work, risk taking, acquiring skills and knowledge, and entrepreneurship. You guys faith to realize wealth is boundless - just because I acquire more doesn't mean someone else is getting less. Wages are similar - there's a direct relationship between what a person add to the company and what he gets paid. You seem to agree with that, in principle.

Layfayette said:

And that is happening because Reckless Ronnie whacked upper-income taxation down from 70% to 30% in the 1980s. ("Wealth" being Net-After-Tax Income".) We need to put them back up to the 95% above a maximum-income level.

Who the hell needs to amass billions upon billions of dollars - just to leave most of it to their children ...

Click to expand...

Nobody "needs" to amass that much wealth but if they gain the experience, training and knowledge to demand a large wage why should they not do so? Or if they take the risks and make the sacrifices to build a business and make it grow why should they not reap the rewards?

layfayette said:

Yes, of course the LoonyLeft create "artificial" studies to prove how unfair the US is in its distribution of Net Income. Then they stupidly post them on the Internet just waiting to be disproved. (I cannot think of anything more stoopid for a public institution to do.)

Let's see your references to those "studies" that are supposedly top-loaded. You seem to think that people on the Left of the political spectrum are stupid enough to do such. We aren't ...

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My reference was the study itselfl it clearly set their data was from the top 225 of the Fortune 500 companies.

Lafayette said:

Which shows how little you know about the science of economic analysis.

This is an Economics Debate Forum ... perhaps you'd be happier on a Message Board?

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LOL, displaying that the study sample is not representative of the entire population is pure analysis. What you're relying on is dishonest fact fudging.

Bullseye said:

LOL, displaying that the study sample is not representative of the entire population is pure analysis. What you're relying on is dishonest fact fudging.

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I have an advanced degree in Economics, and I worked my ass-off trying to get it.

By no means did I "fudge" the numbers in order to get the results I desired. For which, btw, if ever discovered would have likely cost me my job teaching economics.

What planet do you live on ... ?

Lafayette said:

No way, José.

When 14% of American men, women and children are confined below the Poverty Threshold? Nope, never.

The idiocy of earning bundles of money is evident. Who needs more than a million to live very well. All the rest is "show".

And why is accumulating billions so much of a wonder in the US. Who the f**k really cares?

(You can't take it with you.)

America is increasingly barren of its True Values, if it ever had any besides financial glory. Everything, everywhere is measured in units of money. As if that was the only measure on earth. When of course it isn't. I can think of dozens of others, but naming them would only bore you.

We've lost our way, and nothing you write will make anyone think there is ample justification for possessing so much when 40 million people below the Poverty Threshold barely possess a pot-to-piss-in ...

Click to expand...

There is your problem. No one is confined below the poverty threshold. When you believe that you have a self fulfilling prophecy.