By Sahid Fawaz
Remember when conservatives preached trickle down economics as if it was proven science? Well, corporate profits and productivity have skyrocketed in the economic recovery over the last six years. But there was no trickle down to employees.
"According to the latest annual survey by the Economic Policy Institute, a progressive think tank, CEOs at the 350 largest companies in the country pocketed an average of $16.3m in compensation each last year. That’s up 3.9% from 2013, and a whopping gain of 54.3% since the recovery began in 2009.
The average annual earnings of employees at those companies? Well, that was only $53,200. And in 2009, when the recovery began? Well, that was $53,200, too. In other words, while the CEOs have seen their compensation soar by 54%, the typical worker’s paycheck hasn’t budged.
Right now, the average CEO compensation package is 303 times the size of the average earnings of their employees. The late management consultant Peter Drucker (who, as a winner of the Presidential Medal of Freedom, was no foe of capitalism) recommended that a CEO-to-worker pay ratio should never top 25; otherwise, he argued, they would 'increase employee resentment and decrease morale'. By 2005, when Drucker died, the ratio was closing in on 400:1."
We've said it before and we'll say it again: unions are the only real check on runaway executive pay. It's unions that ensure that employees get a fair shot at enjoying the profits from their labor. Without union membership, employees have little power to improve their pay as their companies rake in millions and billions in new profits.
For the rest of the story, check out the Guardian piece here.