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Linda_Owl's avatar

Do you know the current pay-scale ratio difference between CEOs & the average worker?

Asked by Linda_Owl (7722 points ) December 4th, 2011

In the US, inequality has been rising since 1980. Between WWII & the election of Ronald Reagan in 1980, the average income grew by $19,000.oo. The bottom 90% of the country received 65% of that increase. However, between 1981 & 2008 average income grew by around $12,000.oo – and about 96% of that went to the Top 10% of the Richest people in the country. The pay-scale ratio difference between CEOs & the average worker in 1980 was 35 to 1. CEOs began to out-source jobs & close down companies following Reagan’s election, after Reagan started dismantling the regulatory processes & giving tax breaks to the businesses moving their companies to various third world countries.Now the pay-scale ratio difference between the CEOs & the average worker today is 185 to 1.

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10 Answers

jerv's avatar

I have seen some estimates well in excess of 500:1, but it really depends on what companies you look at.

Linda_Owl's avatar

Well, @jerv, the article upon which I based my question was based on information thru the end of 2008. I have no doubt that the pay-scale ratio difference is now (in Dec. of 2011) quite a lot more extreme.

JLeslie's avatar

I have heard some numbers similar to this. It makes me sick.

ETpro's avatar

Let’s get to the CEO’s in a minute. When viewed in inflation-adjusted dollars, the average worker’s income has remained almost flat since 1979. The income of the top 1% has gone up 240% in that same period. In 1980, the average CEO made about 24 times the income of an average worker. CEO pay peaked in 2001 at 300 times the income of the average worker today. That’s part of the problem driving wealth inequity. The other issue is all the tax breaks have gone to the wealthiest Americans over the past 30 years. Outside the mortgage interest deduction, and child credits, there is little in tax dodges available to the average worker, even if they rise to middle management. But millionaires and billionaires can often work the system so they actually get money FROM the IRS for filing.

Linda_Owl's avatar

And there, @ETpro , has explained our current situation in the US (& maybe the world) in terms that all of us can understand. Separate & unequal – it has not worked in the past & it will not work now. Something has got to change.

JLeslie's avatar

I recently saw Zbigniew Brzezinski quoting some stats on Morning Joe about how extreme our gap is between the upper and lower classes is. Or, the dwindling middle class. Something along those lines. We ranked horribly. He saw it as a great concern, that it can ruin the US. I wish I had a link for you about it.

@ETpro The stat you give about the average income top 1%, I assume that is all income. So, it would include non-salary income? Which would be different than CEO income. Although, I don’t know how they would count stock options and other benefits given to salaried employees.

ETpro's avatar

@JLeslie Yes, all income. The truly wealthy rarely work. THey make nearly all their income through investments, often in offshore enterprises where returns are large and they may be able to duck even the low capital gains taxes that would apply to investment income within the US.

JLeslie's avatar

@ETpro I wonder what percentage of the top 1% are salaried employees? That 1% has a really wide range of income. Isn’t it something like $400k and up? Or, is the minimum a higher amount?

ETpro's avatar

I don’t know. It would take some digging. I will wait to see of someone else chimes n with a readily available answer first. But I can find it. The truth is out there.

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