There is a lot of talk about the top one percent from some elected officials, political candidates and in the media. But what does that exactly mean? Fat checks for top corporate executives, that's what!
A new report by the Economic Policy Institute (EPI) notes that since 1978, CEO pay has grown 90 times faster than that of rank-and-file workers. So while CEO compensation went from $1.5 million to $16.3 million, the average private-sector production and non-supervisory worker (which is 82 percent of the workforce) rose from $48,000 to only $53,200 in 2014. As a result, the top CEOs now make more than 300 times what typical workers earn.
As EPI states:
Although corporations are posting record-high profits and the stock market is booming, the wages of most workers remain stagnant, indicating they are not participating equally in prosperity. Meanwhile, CEO compensation continues to rise even faster than the stock market.
In order to curtail the growth of CEO pay, we need to implement higher marginal income tax rates and promote rules such as “say on pay.” At the same time, we need to implement an agenda that promotes broad-based wage growth so typical workers can share more widely in our economic growth.
There is one thing that could help overcome this yawning income gap -- unions. A look back in U.S. history shows our greatest economic period, the 1950s, was during a time when union membership was at its highest. Even the International Monetary Fund agrees more labor membership would help workers.
As a recent Business Insider article states, the U.S. needs to find a solution to an economy that looks good on paper but when looked at more closely is hammering workers:
Organizing may not be the only solution to income inequality. But it's a big one, and it could move the economy in the right direction.