Chances are, you aren’t worth much.
I don’t say that as a commentary on your value as a human being. Rather, if we compare your annual salary to that of the average American CEO, you don’t stack up — at least probably not for a couple hundred years.
Is it OK that the lowest-paid employees at a company would have to work almost 9,100 years to earn what the CEO of the company earns in one year? Is there at least room for debate that maybe there is something slightly unethical about such a wide disparity?
I think so. But I run into plenty of people who think the CEO is worth every penny and that if someone is only earning minimum wage, that is all they deserve, as well. After all, the CEO is taking on all that risk!
Well, not really. I think you could argue that in many cases the minimum wage worker is taking on more personal risk working for a large company than the CEO.
A CEO can oversee mass lay-offs and the value of a company plummet, and he/she will still depart with the so-called golden parachute for all that “good” work.
However, when the CEO cuts hundreds of jobs for short-term financial gain, there is no parachute for the low-wage earner. Especially in today’s economy, those individuals are thrown to the wolves — or, even worse, the creditors.
But that’s OK, right? Only lazy and unmotivated people have low-paying jobs. Everyone gets their just desserts. The structure of our economic system is as fair as it gets. We can’t possibly improve upon it. Right? Right? (Yes, the sarcastic tone is very much intended.)
What prompted all of this? AP science writer Seth Borenstein did an analysis of CEO pay in this country compared to that of the typical worker. It really puts things in perspective.
WASHINGTON (AP) — David Simon of Simon Property received a pay package worth more than $137 million for last year, and the typical CEO took home $9.6 million, according to an analysis by The Associated Press.
Here are some ways to think about just how much money those salaries represent.
Simon’s $137 million is almost entirely in stock awards that could eventually be worth $132 million. The company said it wanted to make sure Simon wasn’t lured to another company.
HOW LONG IT TAKES OTHERS TO MAKE THAT MUCH: A minimum wage worker — paid $7.25 per hour, as some workers at Simon malls are — would have to work one month shy of 9,096 years to make what Simon made last year. A person making the national median salary, $39,312 by AP calculations, would have to work 3,489 years.
BY THE HOUR: Assuming Simon worked a 60-hour week, his pay was $43,963.64 per hour, or $732.73 per minute. To put that in perspective, the minimum-wage worker would have to labor for nearly three years to make what Simon earns in an hour. The average U.S. worker makes slightly less in one year than Simon makes in an hour.
COMPARED WITH AMERICA’S CEO: Simon makes about 342 times the $400,000 annual salary of President Barack Obama. In fact, if you add the salaries of Obama, Vice President Joe Biden, the Cabinet, the Supreme Court justices, all the members of the Senate and House of Representatives and all 50 governors, it is less than $110 million, so Simon makes well more than government’s top 600 leaders. In the past 100 years, U.S. taxpayers have paid a total of $80.6 million, adjusted for inflation, to presidents from Woodrow Wilson to Obama.
The median CEO salary of $9.587 million:
HOW LONG IT TAKES OTHERS TO MAKE THAT MUCH: A minimum wage worker would have to work 636 years to make that much. A person making the national average salary would have to work 244 years to make the median CEO salary.
BY THE HOUR: If you assume the CEO works a 60-hour week, the pay comes to $3,072.84 per hour, or $51.21 per minute. To put that in perspective, the minimum wage worker would have to labor more than 10 weeks to make what the median CEO earns in an hour. It would take the average U.S. worker nearly a month to make what the average CEO makes in an hour.
COMPARED WITH AMERICA’S CEO: The CEO who made the median salary took in 12 times the total $789,674 in gross income that President Obama reported last year. But it is less than half the $20.9 million in income that presumptive Republican nominee Mitt Romney reported in his tax filing.