Income Inequality: Much Worse Than Imagined
On Sept. 25, just past, Chris Matthews of MSNBC’s Hardball discussed the Washington Post’s report on income inequality in the United States. To use the Post’s headline, the pay gap between CEOs and workers is much worse than you realize.
The Post article cites a study by Harvard Business School which found that most Americans believe CEOs make roughly 30 times what the average worker earns.
That’s naïve to the nth degree. Chief executive officers in the United States actually make more than 350 times what the workers laboring under them take home. This underestimate, and a lack of a fuller understanding of the gap, is a problem not only on the United States but also in other industrial nations of the world.
In America, the gap between CEOs’ and workers’ salaries is by far and away the largest of any of the 16 countries this study measured. For instance, in South Korea, the perception is that CEOs make 42 times more than the average worker; in Australia, just over 41 times more, and in Taiwan, roughly 34 times as much.
Look one last time at the United States. Here, the average Fortune 500 CEO makes more than $12 million per year. That’s:
- nearly $5 million more than the earnings of top CEOs in Switzerland
- almost $10 million more than German CEOs
- more than 21 times more than what CEOs in Poland take home
What isn’t wrong with this picture?
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