By State Representative, Leon D. Young
We all remember Bernie Sanders unsuccessful run for the White House in 2016. One of Bernie’s core campaign themes was the issue of wealth and income inequality. And, according to Sanders:
“Today, we live in the richest country in the history of the world, but that reality means little because much of that wealth is controlled by a tiny handful of individuals. The issue of wealth and income inequality is the great moral issue of our time, it is the great economic issue of our time, and it is the great political issue of our time.”
The reality is that since the mid-1980s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest people in this country. That is the Robin Hood principle in reverse. In fact, the top one-tenth of one percent owns almost as much wealth as the bottom 90 percent.
Despite huge advancements in technology and productivity, millions of Americans are working longer hours for lower wages. The real median income of male workers is $783 less than it was 42 years ago; while the real median income of female workers is over $1,300 less than it was in 2007. To further illustrate this point, according to The Executive Paywatch website, online database tracking CEO pay, the average CEO of an S&P 500 Index company made $13.94 million in 2017 — 361 times more money than the average U.S. rank-and-file worker.
Let’s examine some of the key facts you need to know about from this year’s Executive Paywatch report:
• Total compensation for CEOs of S&P 500 Index companies increased in 2017 to $13.94 million from $13.1 million in 2016.
• The CEO-to-worker pay ratio grew from 347 to 1 in 2016 to 361 to 1 in 2017.
• For the first time this year, companies must disclose the ratio of their own CEO’s pay to the pay of the company’s median employee. This change was fought for by the AFLCIO and its allies to ensure investors have the transparency they deserve.
• Mondelēz is one of the most egregious examples of companies that are contributing to inequality. The company, which makes Nabisco products including Oreos, Chips Ahoy and Ritz Crackers, is leading the race to the bottom by offshoring jobs. New CEO Dirk Van de Put made more than $42.4 million in total compensation in 2017—more than 989 times the company’s median employee pay. Mondelēz’s former CEO Irene Rosenfeld also received $17.3 million in 2017, 403 times its median employee’s pay.
• So far for 2017, the highest-paid CEO in the AFL-CIO’s Executive Paywatch database is E. Hunter Harrison, CEO of CSX Corporation. He received more than $151 million in total compensation. In contrast, the lowest-paid S&P 500 company CEO was Warren Buffett who received $100,000 in total pay in 2017.
• The toy-maker Mattel had the highest pay ratio of any S&P 500 company. Mattel’s median employee is a manufacturing worker in Malaysia who made $6,271, resulting in a CEO-to-employee pay ratio of 4,987 to 1. Buffett’s company Berkshire Hathaway Inc. had the lowest pay ratio of all S&P 500 companies, just 2 to 1.
To bring the income inequality issue a bit closer to home, here’s one last factoid to consider:
• About 40 percent of people living in Wisconsin are either poor or low-income, which is a total of approximately 2.3 million residents; and this includes 51 percent of children.
There is something profoundly wrong when we have a proliferation of millionaires and billionaires at the same time as millions of Americans work longer hours for lower wages and we have the highest childhood poverty rate of nearly any developed country on earth.