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Are CEOs worth 380 times what the average worker makes?
There's a pretty amazing viral video on the loose showing how wealth is distributed in this country. More than 3.5 million people have watched "Wealth Inequality in America" on YouTube so far. And one of the most striking statistics from the video is this: The average CEO makes 380 times what the average worker makes.
Are top executives worth that much? Leave a comment and tell us what you think.
A surprise viral hit: Income inequality, the movie
Learn more about where the video came from and why it has gone viral.
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I do call BS on his hypthetical example, because I'm not aware of many CEO's making $200,000,000+. My example if GE's CEO making $21.5 million is more realist (and fairly accurate if you can trust Forbes to be accurate of his CEO and the number of employees GE has). In my example, spreading his pay among all the employees doesn't really have any affect on them. Similarly, a hedge fund manager might make a 1% commission on a billion dollar transaction multiple times per year and make $50,000,000. Seems obscene, but his cut is a very small percentage and not having any affect on anyone in the fund. (In other words, some guy with his pension fund invested in a hedge fund isn't losing his retirement because of the fund manager's commission.)
Rarely do these obscene salaries affect any of the minions, but people like to act as if people are poor because someone else is rich and it isn't the case. Horizon star's final point is correct, it's just about trying to make rich people villions.
What is not recognized is that most CEO decisions would be very competently made by the line workers of the company. Few stand-out CEO's who have taken brave and surprising stands to make their company prosper. In a word the answer to "Are CEO's worth 380 times the average wage earner?" NO!
The assumption that CEO's have taken more risk and worked harder is not necessarily true. The CEO's of large corporations did not start those companies, they got the right kind of education at the right school. Yes, of course they are smart, well-educated, hard-working, etc., but most were born into families that could give them the right start. Class mobility is no longer a feature of American economic life, according to recent studies. This situation is not good for a country. Have you visited countries where the wealth is in the hands of a few, and the rest have little chance to rise? Do you want to live there?
Wait, this calculation does not sound right.
For an average salary of $32,000 (picking one on the low end of most reported average earnings figures for full-time workers) then the CEO would be making $12 million?
Really?
No, don't think so.
And does that CEO pay figure include stock, which pays out over time, very well, for some? But is worthless for many.
The CEO-bashing might feel good and may include valid points. But you lost me with this crude back-of-the-envelope number.
A better story for this business program might be how interest and dividends are taxed, which does give high-earners who are also risk-takers in the stock market a low federal rate.
For all of the folks who fall into this 1% who decry that America needs to get back to the values it once had, they cannot see that this pay inequality is the root of the problem. In the Sixties, a CEO, a President of a company made around 25X more than their average worker. The "nuclear family" was destroyed when mom & pop HAD to work two jobs to make ends meet and they had to do that because they didn't make as much as before.
No one is saying that the top 1% haven't worked for their money, but to suggest that they somehow work harder than the poor or middle class is wrong. To suggest that if the poor or middle class worked harder, they too would be in the top 1%, implies some sort of bizarre alternate reality where your paycheck is directly proportional to how hard you work. The question is, should the government attempt to correct this massive inequality? Depends, if you think the government should "establish justice, insure domestic tranquility, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity".
I am sorry, I am a capitalist. Bill Gates I assume would be one of the 1% of the people on this chart. Bill Gates earned every penny and I believe most of it was through the value of his stock and not a paycheck. I am not for socialism like this videos is. There will always be a chart where someone has it all or nothing. Even in a socialist soceity those who are in power are treated better than the rest, even with all the wealth "equally spread" among the people.
Now if you want to talk about CEOs who make 200 to 300 times their lowest employee' wage, that fail companies, stockholders and employees and still get a multi million bonus, that story would have meaning.
Really, than why did he try to use a natural monopoly to create another one? Why was there a two tier pricing system depending on whether or not the manufacturer sold OS Warp? Copyrights are a government sanctioned monopoly, which is how he made his money. That and an IBM antitrust suit. Otherwise, IBM would have created their own OS without Mr Gates. Why are there no African American software moguls? Because you can't learn to program if you never have access to a computer.
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