Pay Gap Widens Between Management and Workers
The sixth annual survey by the Institute for Policy Studies and United for a Fair Economy today reported that the pay for top corporate executives versus an average production worker last year reached a gap of 419 to 1.
The survey, A Decade of Executive Excess," also cited that the gap compares to a 1980 sum of 42 to 1. If the pay for workers had risen at the same pace as executives, the organization says the average production worker would today earn $110,000 annually. Instead, the pay rate for this employment sector is $29,000, and the minimum wage would have been $22.08/hour compared to today's rate of $5.15.
One factor leading to the widening gap a significant rise in the stock market, since management now relies on 401K and other investments for the bulk of annual compensation. Over the last 10 years, annual CEO compensation at a large company is estimated at $10.6 million compared to $1.8 million in 1990. In 1998, executives realized a 36 percent increase.
Others commented on the gap and explained that it is due, in part, to America's desire for wealth coupled with a booming economy.