Minimum Wage Perspective: CEOs Earn 331 Times the Average U.S. Worker

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After the wave of retail worker strikes that swept across the United States in 2013, the issue of minimum wage was again propelled into the forefront of the national debate in 2014 by President Barack Obama’s State of the Union Address. “Americans understand that some people will earn more than others, and we don’t resent those who, by virtue of their efforts, achieve incredible success,” said the president, who asked Congress in last year’s address to lift the minimum wage. “But Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.”

While Congress failed to pass any minimum wage legislation last year, five states — Connecticut, Delaware, Maryland, Minnesota, and West Virginia — plus Washington, D.C., have already enacted increases so far this year. And as part of the Obama administration’s pledge to make 2014 a year of “action,” with increasing the federal minimum wage a key plank, the White House has continued to campaign for a significant hike. However, as the president noted in his January address, to ensure that minimum wage increases reach the millions of Americans now working for $7.25 an hour, “Congress needs to get on board.”

CEO-to-Worker Pay Ratio, Source: AFL-CIO


“America is supposed to be the land of opportunity, a country where hard work and playing by the rules would provide working families a middle-class standard of living. But in recent decades, corporate CEOs have been taking a greater share of the economic pie while wages have stagnated and unemployment remains high,” says the introduction of an annual executive pay watch report compiled by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).

That report found that in 2013, chief executive officers of U.S.-based companies earned an average of 331 times more than the American worker and 774 times more than a minimum wage salary. For clarity, the average American worker took home $35,239 last year, while a full-time worker making the federal minimum wage earned $15,080. Of course, the CEO-to-worker comparison is not exact –the AFL-CIO’s measure of CEO compensation includes such perks as stock options and equity awards, while workers’ compensation excludes pensions and employer contributions to 401(k) plans.

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