Home > The Economy > Why not s/v? (2 graphs)

Why not s/v? (2 graphs)

from David Ruccio

fredgraph

I think it’s a positive move that the Securities and Exchange Commission has approved a rule that would require most public companies to regularly reveal the ratio of the chief executive’s pay to that of the average employee.

CEOWorkertoPay

The ratio does give an indication of how members of the 1 percent have pulled away from everyone else, including their employees. Presumably, revealing that ratio might help keep CEO pay in check.

But underlying the increase in CEO pay is the fact that corporate profits have also been growing at the expense of workers’ pay. The increase in profits has made it possible for CEOs to capture a large share of those profits.

As we can see above, the ratio of corporate profits to workers’ pay has risen dramatically in recent decades, from 0.157 in 1982 to 0.324 in 2013.

Why not then make a rule that corporations (or the nation’s statisticians) need to reveal their rate of exploitation, s/v?

 

 


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  1. Tom Shillock
    August 11, 2015 at 8:53 pm

    The decrease in taxes on the upper class including executives has made it possible for them to keep more of their increasing compensation schemes, unlike the period between the end of WW2 and the late 1960s when it was taxed away.

    The ideology of American individualism has become a ruse for vast and increasing inequality in an economy that is 70% based on consumer spending. That’s not a formula for economic growth.

    The decline in taxes on the upper class since the late 1970s has correlated with greater financial and economic instability and a lower rate of increase in GDP.

    Surely, at some point the pleasure of acquisition of wealth for its own sake must sucumb to diminishing returns unless one is psychopathic. Should psychopaths be rewarded?

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