Forget About Wages, It’s About Pay Ratios
Anyone who has ever had a boss plead poverty as an excuse for not giving raises, or even paying living wages, needs to read this article. The United States of America has no regulations regarding the difference between lowest and highest paid employees and CEOs of companies. That means people who pay minimum wages with no benefits to workers are free to set six figure take-home salaries for themselves, and it happens all too often. The fight to reverse this growing gap is starting.
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In 2013, president of the AFL-CIO Richard Trumka unveiled the Executive Pay Watch. His research reveals that the highest paid CEO makes 345 times more money per year than the majority of workers. This is relevant not just because it is such a large gap, but also because it is the largest pay inequality gap in the world.
Communicating to those with working-class and middle-class incomes just how great the pay gap is may be step one in changing it and bringing America up to 21st century standards of justing in pay. We are waiting for the new SEC ratio disclosure regulations to kick in. New requirements that America’s top corporations must annually reveal the ratio between their CEO and median worker compensation are most welcome.
As tuition costs soar, and college education becomes out of the reach of more and more potential students, so do the salaries of executives at many colleges and universities.
According to the Chronicle of Higher Education, the largest private college president compensation package in 2011 belonged to Robert J. Zimmer of the University of Chicago. His total compensation was $3,358,723 for the year. His base pay was a measly $917,933. With only five years of service, Zimmer was the highest paid college president for the year. Most don’t make three million dollars, but 42 of these presidents made over one million dollars in 2011.
A minimum wage worker in Illinois makes $8.25 per hour. Assuming 40 hours per week and 50 weeks of work for the year, that worker’s annual before tax income is $16,500.
1,000,000 : 16,500 = 1:61. These college presidents are making over 60 times what their lowest paid employees are making; in some cases, the presidents are making almost 200 times what their lowest paid employees are making.
Truthout reports that students at St. Mary’s College have been organizing for pay justice since 2002, and they are making a difference. From 2002 to 2006, their campaign resulted in the college’s lowest annual pay rate rising from $15,700 to $24,500. This is progress, but more needs to be done.
Their current efforts to create pay justice and lessen the ever-expanding gap between the lowest and highest paid workers include a formal proposal to enforce a 10:1 pay difference ration in the college. Hopefully, the nation is watching.
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