Gaps Between Pay Of CEOs and Average Workers Is Huge And Getting Wider
Monday, September 5, 2011
As the U.S. celebrates its 117th national Labor Day holiday, it is important to remember that this day is more than just the official end of the summer and another excuse to have a barbecue.
It is a day to celebrate the achievements and contributions made by the American worker throughout this country’s rich history. It's also a time to reflect on the fact that chief executive officers are making more money compared to front-line workers than at almost anytime in history.
Right now it may be hard for many to celebrate.
The official unemployment number is 9.2 percent. The real unemployment number, also known as U6, is actually 16.2 percent.
This is considered a more accurate indicator of the health of the workforce because it includes people who are underemployed (working part-time but wanting to work full-time) as well as people who have stopped looking for a job but still want to work.
All totaled, 25.3 million people are unemployed or underemployed.
Even those who are fully employed may not have reason to celebrate, according to a new study released by the Washington-based Institute for Policy Studies.
The 18th annual executive compensation survey details the growing income gap between workers and CEOs.
The national ratio for CEO-to-worker pay grew 20 percent from last year to hit a whopping 325 to 1.
The ratio in San Diego County, however, remains at 42 to 1.
Corinne Wilson heads up research and policy with the Center for Policy Initiatives in San Diego. She said the new report details how people are struggling to get by while corporate executives are living the good life.
"It shows that companies are generally doing well,” said Wilson. “Their leaders are doing extremely well. But the workers and public are not sharing in that."
She said many families are feeling the impact of stagnating wages and are forced to work multiple low-paying jobs just to make ends meet. This, in turn, affects the children in these families.
“If people are not able to help their kids because they are having to work and not seeing their kids, that means that these kids are going to be at a disadvantage their whole lives,” Wilson said.
Well-paid CEOs may work long hours and not spend as much time with their children, either, she said. But their spouses are not forced to also work long hours to support their families. They can also afford to hire private tutors if their children need help with homework.
The average personal income in San Diego is just under $45,000, according to statistics from the Bureau of Economic Analysis. By contrast, the average CEO's yearly compensation in the county is just over $1.9 million.