What aspect of the American economy continues to grow? The income disparity.
When it comes to pay, the United States is the 42nd most unequal country in the world, according to the CIA’s World Fact Book, which ranks countries in terms of how “equally” wealth is distributed.
The U.S. ranks behind the European Union and the United Kingdom in pay inequality. It’s also behind Cameroon, the Ivory Coast, Egypt, Tunisia and Yemen, and just ahead of Uganda and Jamaica, according to news reports.
The top 0.1 percent of earners in the U.S. took home 10.4 percent of the nation’s income, including capital gains, the Washington Post reported. At the very tippy top, the top 1 percent took home more than a fifth of all personal income in the U.S.
Research shows that the single largest group of the highest-income earners are executives and other managers in firms, according to a landmark analysis of tax returns, the Washington Post reported.
After executives, managers and financial professionals, the next largest group of earners were lawyers with 6.2 percent and real estate professionals at 4.7 percent. Media and sports figures, combined, made up only 3 percent.
Executive compensation at the nation’s largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of America has stalled, the Post reported.
In 2010, median CEO pay jumped 27 percent, a USA Today analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1 percent, according to the Bureau of Labor Statistics.
Supporters say CEOs deserve such pay, in part, because they kept companies profitable during the recession. Critics say they did so by firing workers, and cutting pay for those they kept.
Supporters say extreme pay is necessary to retain talented chief executives.
Harvard researcher Kelly Shue, however, has documented just how much “peer influence” — in no way related to skill or performance — impacts what corporations pay their top executives, Inequality.org reported. The “old-buddy network” is alive and well, Shue found.
Other successful businesses, however, are known for treating their workers well, and no one’s CEO is starving. Google, Costco and Nordstrom come to mind. As do Amazon.com, Starbucks, and yes, Microsoft.
Repeated surveys by the National Opinion Research Center since 1987 have found that 60 percent or more of Americans agree or strongly agree with the statement that “differences in income in America are too large.”
No one wants to deny top executives their just rewards. But no single executive is worth more than the company’s actual workforce. Sharing the pie is good for business, fairness and human dignity.
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