Friends,
What would a typical worker earn now if their wages had grown as much as the pay of CEO’s at big corporations, over the past 50 years?
$25 an hour? $100 an hour? Click on this video.
The first bar shows us what the salary of the typical American worker was in 1968, including benefits. Back then, they earned a little over $25 an hour, in today’s dollars.
But what did the typical worker actually earn in 2024?
The typical worker’s earnings went up to $36.49 an hour.
Good news, right? Who wants to celebrate?
Not so fast. Back to my original question: If worker pay had climbed as much as CEO pay since the late 1960s, what would the typical worker earn today?
Ready for this? $432. Per hour.
Of course corporations aren’t paying their workers anywhere close to that. Instead, they’re now paying their CEOs 280 TIMES MORE than the typical worker.
Why is that? Not because CEOs have become so much more valuable than their workers over the past fifty years. No, it’s because the system is rigged.
Big corporations chronically underpay workers compared to their worker’s productivity on the job. Productivity — that is, the value of their output.
But instead of sharing these profits with their workers, corporations and their CEOs are siphoning them off into stock buybacks.
Stock buybacks reduce the number of shares available for investors to purchase, which drives up the value of the remaining shares.
These rising share prices bump up CEO pay, because increasingly, part of their compensation is in shares of stock.
CEOs can now effectively give themselves a raise, while workers get the shaft. That’s how you end up with a chart like this, in the video.
What can we do about it?
1. Raise the federal minimum wage, which hasn’t been increased since 2009.
2. Support and strengthen labor unions, which fight for better wages.
3. Use antitrust laws to break up big corporations that dominate their industries, raising prices for consumers and reducing job opportunities for workers.
4. Raise taxes on corporations whose CEOs are paid hundreds of times more than their workers.
5. And ban stock buybacks.
But first we have to realize that the reason CEOs are getting paid insane amounts of money is not because the “free market” dictates that they’re worth it. It’s because we’re letting them get away with it.
This post has been syndicated from Robert Reich, where it was published under this address.