Where Have All Big Bucks Gone, Long Time Passing?

 

With an unemployment rate hitting prepandemic law of 3.6%, workers are doing better than they have in years. “Some 4.4 million Americans quit or changed jobs that month, according to a report released Wednesday by the Bureau of Labor Statistics, using their leverage in an economy where job openings still outnumber job seekers by close to 2 to 1… Employers reported hiring 6.6 million people in April. Layoffs, meanwhile, fell to an all-time low of 1.2 million, as businesses sought to keep the workers they did have.” Washington Post, June 1st. OK, there is that “inflation” thang that stings like a bee!

Working from home, they may have saved the commute but “since going to remote working during the COVID era, 54 percent of workers reported an increased workload, new research found.” Industrial Safety and Security Source, 11/1/21. Folks with skills, particularly educated Millennials, are making more money than ever, although generally the shortage of workers gives them significantly more tasks that they had contemplated, particularly disheartening to those who left for a better work/life balance. But that “making more” is a relative term. 

For America’s Fortune 500 CEO’s, the ratio of their pay and that of the average for their employees, according to the Economic Policy Institute, has skyrocketed 1,322% since 1978. That was last year’s news. Soaring inflation is today’s headline, but when you make 361 times the pay of your average worker, it isn’t even a tiny bump in the road. In fact, you might even be benefiting from cost-plus mark-up pricing to make even more money. Stan Choe, writing for the May 30th Associated Press, notes the vast widening of the disparity between top bosses and their workers: 

“The typical compensation package for chief executives who run Standard & Poor’s 500 companies soared 17.1% last year, to a median $14.5 million, according to data analyzed for the Associated Press by Equilar. The gain towers over the 4.4% increase in wages and benefits netted by private-sector workers through 2021, which was the fastest on record dating to 2001. The raises for many rank-and-file workers also failed to keep up with inflation, which reached 7% at the end of last year.

“CEO pay took off as stock prices and profits rebounded sharply as the economy roared out of its brief 2020 recession. Because much of a CEO’s compensation is tied to such performance, the compensation packages ballooned after years of mostly moderating growth… In many of the most eye-popping packages, such as Expedia Group’s, valued at $296.2 million, and JPMorgan Chase’s $84.4 million, boards gave particularly big grants of stock or stock options to recently appointed CEOs navigating their companies through the pandemic or to established leaders they wanted to convince to hang around. 

“The CEOs often can’t cash in on such stock or options for years, or possibly ever, unless the company meets performance targets. But companies still must disclose estimates for how much they’re worth. Only about a quarter of the typical pay package for all S&P 500 chief executives last year came as actual cash they could pocket.

“Whatever its composition, the chasm in compensation between CEOs and the rank-and-file workers they oversee keeps widening. At half the companies in this year’s pay survey, it would take the worker at the middle of the company’s pay scale at least 186 years to make what their CEO did last year. That’s up from 166 a year earlier.” 

Even as the stock markets drop, for too many senior managers, the pay just keeps rolling in at the same rate. In fact, if you narrow the list to the 300 publicly traded US corporations “with the lowest median wages, the gap between what CEOs and median-wage workers earn has grown to a ratio of 670-to-1, according to a new report [from the Institute for Policy Studies]—up from 604-to-1 in 2020.” FastCompany.com, June 7th. But those at the top seem also to be subsidized by “the rest of us.”

Remember that 2017 GOP-led tax cut for corporations? It was supposed to “trickle down” and create new, well-paying jobs… which in turn would generate more income tax to pay for that massive tax reduction (from 35% to 21%). It didn’t. Instead, it produced stock buybacks and dividends, which benefitted folks with a lot of stock. Like CEOs. What that tax cut did produce instead was trillions of dollars of deficits which continue into the present day. Deficits which burden all taxpayers, not just the ones who took those savings and invested them to make more money. Think that either political party has a near-term plan significantly reduce inflation? Easy to blame. Easy to suggest solutions that sound good (like build new pipelines and open more oil leases). But very, very difficult to fix.

I’m Peter Dekom, and oh, if you think that Big Oil pumping out of Texas or Oklahoma will give Americans a huge discount below global oil pricing, think again.