Posted by: Ken R | November 30, 2013

Time to Balance the Ratio of Executive Pay with Minimum Wage Earners


OMAHA,NE – The ratio of executive pay to minimum wage pay has become ridiculously astronomical in the US during the last three decades. Executive pay has skyrocketed and middle income earners and minimum wage earners have suffered with pay stagnating or decreasing. According to a slideshow posted after a Huffpost article on 11/24/2013 Walmart has a CEO to employee pay ratio of 717:1.  Only one company in the US has a greater CEO to employee ratio, United Health Group with a CEO to employee ratio of 1737:1.  Information at Payscale.com puts WalMart’s Executive Pay ratio even higher, at 1034:1.  Why does this need to happen in a country once known as the land of opportunity?

Executive Pay Ratio Chart

Look at these ridiculous executive pay ratios. From Economic Policy Institute

Raising the minimum in the US won’t do businesses the harm they as conservatives claim as Business week points out, “America’s minimum wage is 27 percent of the U.S. average pay, a lower ratio than that of any other member of the Organization for Economic Co-operation and Development except Mexico. That doesn’t prove that the U.S. floor is too low—only that it can be higher without the sky falling. In Denmark, among the leading countries in income equality and national happiness, the minimum pay set by negotiations between employer groups and unions is the equivalent of about $20 an hour. Despite that, the World Bank has ranked Denmark as the easiest place in Europe to do business for three years running.” BusnessWeek 11/27/2013

Recently, the Swiss had a public vote on a referendum to cap executive pay at 12 times the wage of the lowest employee.  The proposal was rejected by two-thirds of voters, but the discussion highlighted the issue of executive pay, a discussion that needs to come to the US along with raising minimum wage.  I agree with the Swiss proposal to cap executive pay at a ratio of 12:1. Executive pay has risen in the past decade while middle class and poor incomes have stagnated or decreased.  American wages and hours are being cut to pay CEOs astronomical amounts of money. If you can’t understand that, then there’s the ignorance you speak of. A capitalist economy needs consumers who can afford to live in it. Sociopathic CEOs are an affront to that truth.  According to Payscale.com WalMart CEO, Michael Duke gets $23,150,000 a year. That adds up to 1000 jobs at $23,150 a year to pay his outrageous and astronomical salary. Time to reign in Executive Pay in this country!

References

Swiss Executive Pay Referendum – http://www.huffingtonpost.com/2013/11/24/executive-pay-switzerland-proposal_n_4333376.html

SEC and Executive Pay ratios. http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539817895#.UmCucmRDu3o

Minimum Wage http://www.businessweek.com/articles/2013-11-27/what-a-higher-minimum-wage-does-for-workers-and-the-economy

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Responses

  1. So why do you not include any information on ways to fix this? Like including information on H.R. 1010 the Fair Minimum Wage? Which you can learn more on the Forward Equality blog at http://wp.me/p1RsS2-jq But otherwise, I agree with your post.

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    • HR 1010 is just minimum wage, it doesn’t even begin to touch capping executive pay to employee wages.

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      • Well, Ken, I believe it is a start and should be included in your post. Or include the contact to Congress so that people can call and bitch. But, it usually helps when they have a strong point to their call. Maybe, there could be a closer collaboration between progressive groups in Nebraska.

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      • Well, there is plenty of talk about raising the minimum wage, not enough talk about capping executive pay.

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      • Okay, so is there a bill in Congress trying to fix this?

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      • Nope. I’m thinking further ahead.

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  2. […] sitting on their behinds.  The CEO of WalMart gets paid around $23,000,000 a year. That’s 1000 jobs at $23,000 a year lost to one CEO’s outrageous salary.  This is not the Land of […]

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