So… rich people have a LOT of money right now.
Like, “a lot” alot.
Just for perspective, the ratio of CEO to worker pay in the 1950s was 20 to 1. That was about $3500 per year for the average worker in 1950, which is just under $25k a year, according to Stanford. Now once upon a time, I went to school to be a History teacher, not a Math teacher, but I know my basic arithmetic. Sometimes, only knowing the basics can be really helpful in economics, a place sometimes way too in love with its own complexity. So:
$25,000 x 20 = an average CEO pay of 500,000 (in 2000 dollars)
Now, let’s take a look at some recent numbers from January 2018, where it shows that the CEOs of the 350 largest firms make 271 times more than their average workers… and that’s not even the worst! From the article:
“Although the 271:1 ratio is high, it’s still not as high as in previous years. In 2015, CEOs made 286 times the salary of a typical worker and 299 times more in 2014. Compare that to 1978, when CEO earnings were roughly 30 times the typical worker’s salary.”
According to a report from the Economic Policy Institute, the average CEO pay is 271 times the nearly $58,000 annual average pay of the typical American worker.
So let’s take that 58,000 and multiply it by 271, shall we? That nets us somewhere in the neighborhood of 15,718,000.
Let that sink in.
You get 58,000
They get FIFTEEN MILLION.
Now, a new article from the fantastic folks at Dissent Magazine detail a proposal to reduce this disparity…. somewhat.
“In 2010, trade union leaders presented elites at Davos with a proposal for a ratio-based maximum wage—something proposed in the United States by Amalgamated Transit Union President Larry Hanley. Hanley’s version would mandate that a top executive’s pay be no more than 100 times the salary of the company’s lowest-paid worker. In other words, if the receptionist or janitor makes $35,000 per year, the CEO would take home no more than $3.5 million. To raise his or her pay further, the boss would have to bring up the bottom as well.
While a 100:1 gap comes nowhere close to rigidly enforced equality, it would break from current norms in the United States, where a CEO in one of the country’s largest 350 firms earns an average of 271 times that of a typical worker, according to theEconomic Policy Institute.”
Reduce the gap to 100 to 1 as opposed to 271. That’s quite a harsh cut for the richies, isn’t it? I mean, that’s, what, a 158% reduction? Downright savage… until we run the numbers. Let’s take that $58,000 average income again, and this time multiply it by 100
58,000 times 100 is… $5,800,000. Over five and a half million dollars, PER YEAR, for the bigwigs at the 350 biggest companies. Speaking of 350 companies…
5,800,000 for 350 companies is… let’s take that 15 million and subtract the five and a half million… that’s a difference of $9,918,000 that could be used to, say pay people a living wage or give them healthcare free at the point of service… especially when you take that nine million saved and multiply it for all 350 firms…
3,471,300,000. Three billion four hundred seventy-one million three hundred thousand. Per year. And that’s only the 350 biggest firms in the country, and that’s even with the fairly tame expectation of cutting the ratio to 100 to 1. What if we cut it back down to the 1950s level?
58,000 avg income times 20 = 1,160,000 for the CEOs.
Do we dare subtract the 1,160,000 from the 15 million from the 271:1 ratio?
14,558,000. Per year to spread the wealth while the CEOs at the top 350 firms still get to make over a million a year. Oh, and if we take that 14 and a half million and multiply it by 350?
5,095,300,000. Five billion ninety-five million three hundred thousand. Per year. From only 350 companies. Money to be used for small towns, schools, roads, bridges, healthcare and, most important, money that could, and should, go into your pocket as realistic wages for the job you do.
I don’t know about you, but that could sure help a lot of people.