Why Your Wages Aren’t Going Up
By James Kwak
Unemployment is down to 5.4%! Yay
That was the summary of last week’s unemployment report. Yet the two-track “recovery” — about to enter its seventh year — continues. Average hourly wages increased by only 0.1% in April and 2.2% for the past twelve months, which amounts to basically nothing when you take inflation into account.
This is what the new normal looks like. Wages barely rise during periods of economic “expansion” (you know, the opposite of recession), then fall when unemployment spikes during a recession. In the long run, that means that average real earnings actually go down, and household income can only keep up if people work more hours. Yet the number of full-time jobs is lower today than it was before the financial crisis.
Well not if you are a CEO. Nope
May 13, 2015
WASHINGTON — The already astronomical ratio between the pay of CEOs and their workers climbed even higher in 2014, the AFL-CIO said Wednesday in its annual Executive Paywatch report.
The ratio jumped to 374-to-one in 2014, up from 331-to-one in 2013, the union report said, noting that back in 1980 it stood at 42-to-one.
The numbers released in the union report aren’t entirely surprising since they reflect a seemingly upward trend. They take new importance, however, as economists and policymakers debate the cause of anemic wage growth. Income has been largely stagnant for workers, even as millions of new jobs have been created and the unemployment rate now stands at 5.4 percent.
Additionally, the union report estimates that in 2014 CEOs of companies listed on the S&P 500 Index received on average $13.5 million in total compensation. Its estimate is based on analysis of reported compensation from 350 of the 472 listed companies that publish such information.
That’s an increase of 15.6 percent over the prior year, well above the sub-par annual wage growth for workers that’s below 3 percent. The report noted that non-supervisory workers earned $36,134 on average last year, according to Labor Department data, and that a full-time worker making the federal minimum wage earned only $15,080.
The union pointed to Walmart CEO Doug McMillon, whom it said received almost $19.4 million in total compensation_ about 536 times the U.S. average rank-and-file worker's pay.
Read more here: http://www.mcclatchydc.com/2015/05/13/266545/say-what-ceo-to-worker-pay-ratio.html#storylink=cpy