A new analysis of CEO pay and benefits reveals that the top executives at the top S&P 500 companies earned another $2 million last year, for an average package of $22.6 million, expanding the wage gap with workers to 373 to 1.
The St. Louis investment firm Stifel provided Secrets a new analysis of AFL-CIO, Bureau of Labor Statistics and CNBC data showing that the average worker salary reached $36,100 after a tiny 2 percent increase while the top CEO's saw a 16 percent increase.
The widening gap comes as President Obama and Democrats fret about wages, but fail to make credible changes to close it.
Stifel chief economist Lindsey M. Piegza wrote:
The discrepancy between both the level of pay and the growth rate in CEO pay relative to the earnings of the average American is not a new issue. In fact, the divergence in pay has been growing steadily for the past three decades. The ratio of CEO earnings to average worker pay in 1980 was only 42:1. Today, that ratio stands at a whopping 373 to 1.
While some analysts are quick to blame greed as the reason behind the widening income gap, others have pointed to the lack of business investment and high-paying job growth. In other words, there are fewer opportunities for workers on the rungs of the labor ladder below the top executive. The net business startup rate (new businesses less closed firms) continues to trend negative as it has for the last six years.
Government intervention to arrest the growing divide between regular citizens and top level CEOs has been minimal. For some, this is a welcome conclusion as government is never the engine of growth and thus, should not interfere in the private sector. However, others contend the government should intervene and "level the playing field." Currently, the Securities and Exchange Commission is considering a proposal that would require companies to justify executive compensation and compare it to the company's stock performance. Of course "justification" does not equate to concrete or equitable regulation.
Paul Bedard, the Washington Examiner's "Washington Secrets" columnist, can be contacted at email@example.com.