A new report from the Economic Policy Institute finds that CEO compensation has grown by 940% since 1978. Worker compensation, however, grew only 12% during the same period.
The report was written by economist Lawrence Mishel and Julia Wolfe. Mishel led EPI for many years. The media always describes EPI as “left-leaning” because it is critical of economic inequality. It’s research is impeccable.
Diane Ravitch's blog 
“The economy would suffer no harm if CEOs were paid less (or taxed more).”
I have legally used the tax laws to my benefit and to the benefit of my company, my investors and my employees. I mean, honestly, I have brilliantly – I have brilliantly used those laws.
Donald Trump
Mean, Law, Benefits
“Trump boasts about ‘brilliantly’ using the tax laws” by Nolan D. Mccaskill, http://www.politico.com. October 3, 2016.
Well, my plan, actually Larry Kudlow, who’s a fantastic guy, I think likes my plan the most. I’m cutting taxes by about the most.
Donald Trump
Cutting, Thinking, Guy
Source: http://www.foxnews.com
The estate tax has been a disaster. First of all it’s double taxation, some people could even say it’s triple taxation.
Donald Trump
People, Taxation, Firsts
Source: http://www.realclearpolitics.com
Tax is a big expense. And I wouldn’t mind paying taxes a lot less if our politicians knew how to spend the money, but they don’t. They waste the money.
Donald Trump
Mind, Paying Taxes, Waste
“Where will Trump focus his criticism in next debate?”. “The O’Reilly Factor”, http://www.foxnews.com. September 29, 2016.
I understand the tax code better than anybody that’s ever run for president.
Donald Trump
Running, President, Taxes
Second presidential debate, http://www.nytimes.com. October 10, 2016.
I’m cutting taxes. We’re going to grow the economy. It’s going to grow at a record rate of growth.
Donald Trump
Cutting, Growth, Records
The third presidential debate between Secretary of State Hillary Clinton and Donald J. Trump, http://www.nytimes.com. October 20, 2016.
I will be the greatest jobs president that God has ever created. The tax relief will be concentrated on the working and middle class. I will be president for all Americans.
Donald Trump
President, Taxes, Middle Class
Under my plan, I’ll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses. That’s going to be a job creator like we haven’t seen since Ronald Reagan. It’s going to be a beautiful thing to watch.
Donald Trump
Beautiful, Jobs, Watches
First 2016 Presidential Debate Between Trump, Clinton, http://www.nbcnews.com. September 27, 2016.
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This report should be sent to Bernie’s campaign. It would give him more talking points when he discusses income inequality. Bernie is also on the right track with resolutions to the problem.
We need to revive unions. If we had functioning unions, it would also help average workers get a better deal that would lessen the impact of income inequality. Bill Maher said this week that 42% of American workers make $15 dollars an hour or less. He mentioned this statistic in reference to understanding increased gun violence by white males. We are nation of winners and losers, and the losers feel displaced and angry. Trump wants them to scapegoat immigrants, but the person they should be angry with is the CEO.
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This is one of Bernie’s talking points. I heard something quite similar from him very recently.
And yes, still, in the US, young men are micro-conditioned to be competitive–they are supposed to be the winners. And then a little over 30 percent of them do poorly in high school, and their high school hasn’t trained them in a trade, and they have no prospects and are confused and angry and living in their parents’ basements and surfing the Trumpy Proud Boys Aryan Identitarian websites. . . .
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LOL: Left-leaning. Compound participle. Any scholarly work in economics that is not court singing for the oligarchy.
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e.g., “For this is how it should be, given that the all-benevolent free market, in its mysterious ways, always delivers the best of all possible worlds.” Hee hee.
Isn’t it interesting how markets that ordinary people cannot participate in, or participate in substantively, are nonetheless described as free? I imagine a group of people who live on an island, one of whom claims to own all the coconut trees and sells the coconuts for $1.00 apiece to folks who show up by boat, from elsewhere, to buy them. The others on the island object that the coconuts ought to belong to everyone and that there is no money on the island, but the “owner” says, “Hey, it’s a free market, and you must respect property rights.”
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Was Professor Pangloss a neo-liberal economist?
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I think that it’s the perfect analogy–to Leibniz/Pangloss. Just as blinkered. Start with the conclusion you want. Then go to extreme lengths to justify it. Neoliberal theodicy.
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The poor fools that are in the Trump cult should understand that he is the epitome of the ugly, selfish capitalist boss. He represents what they should disdain. He uses the undocumented on the bottom rung of the Trump ladder, and he uses his power to stiff blue collar vendors that have done a job for his company.
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Yup. He’s done this over a lifetime. And he sold them a pack of lies: that he was a great businessman who started with a small loan from his father and turned it into billions and that he was going to make better deals for American workers and was going to put trillions into new infrastructure projects to rebuild America and get it working again. The small loan was more than half a billion dollars. He went bankrupt numerous times until he found an inflow of Russian money. He placed tariffs on foreign goods that are paid by American buyers of those goods and affect, especially, working-class Americans. And he delivered no new infrastructure projects. All of it, lies. OK. I see a 2020 Presidential campaign commercial in this. What Trump said. The truth. What Trump said. The truth. What Trump said. . . .
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Rush L thinks differently. “…the people on the left mounting this opposition are entirely dishonest and nothing but robots reading from talking points and a script right out of the Democrat left-wing playbook on how to deal with the subject of tax cuts.”
This is the CR*P that Trump supporters are hearing. Tax cuts for the wealthy work. It won’t cost the government money. It’s false to say that the wealthy are going to get the lion’s share of the tax cut and that it won’t trickle down. “…every time tax cuts like this have been tried, they have worked,”
……………………………………………………….
“The Left Lies About Trump’s Tax Cuts, Economic Boom”
August 31, 2017
RUSH: What does it mean, folks, when I can totally, accurately predict the reaction and response of liberal Drive-Bys and economists whenever a Republican tax cut is proposed? What does it mean that I can almost predict word-for-word what they’re gonna say? What does it mean?
It means they’re speaking from a script. It means they are totally politicizing. It means they’re not even paying attention to the specifics of what’s been proposed. All it means is they want no part of a tax cut, and they’re gonna do everything they can to try to convince the American people that a tax cut would be the worst thing ’cause it’s gonna cost the federal government money — not being revenue neutral — the rich are gonna get the lion’s share of the tax cut, and they’re not gonna trickle it down. They’re not gonna share with anybody so you’re gonna get worse off.
It’s what they’ve been saying since the 1980s and Ronaldus Magnus. And yet every time tax cuts like this have been tried, they have worked, and that’s why these people are really panicked. Same reason they’re panicked over Trump. Trump cannot be seen as successful. They can’t permit it. They cannot permit. So Trump’s 3% economic growth, put it on page A-18 and ignore it on cable news, don’t even report it.
Trump’s tax cut, “It’s typical. It’s the same as Bush. It’s the same as Reagan. It’s a tax cut for the rich. It blows through the federal budget deficit, and it’s not revenue neutral, and it doesn’t help the middle class.” What it ought to tell you is that the people on the left mounting this opposition are entirely dishonest and nothing but robots reading from talking points and a script right out of the Democrat left-wing playbook on how to deal with the subject of tax cuts.
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Trump claimed that he got $1M from his dad and characterized that as a “small” loan. People who have not ever seen that kind of money (and probably never will) fell for it, hook line and sinker. According to reports, such as in the New York Times, it was actually a lot more money than that, and based on the money his dad gave him over the years, he was actually a millionaire as a child.
This is the guy whose daily schedule today mostly consists of watching TV, playing golf and attending rallies in order to get re-elected.
The party of stupid is comprised of a whole lot of dingbat idiots who will be forever making excuses for the man and his party which aim to get rid of the few safety nets we have for our most vulnerable populations, including Social Security and Medicare for seniors and the disabled. He knows absolutely nothing about what it’s like to actually have to work for a living or live without any kind of safety net.
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“Rush Limbaugh thinks”? Not likely.
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Do we need more proof that those who trumpet the “natural market forces” in our economy are really dependent on a personal network of people who are compensated for their activity through this network?
Most CEOs are rewarded for short term goals. There has grown up a thriving group of people who develop something and then sell it to a company. The company then cuts employees who are not needed by the new owner, making it seem that the CEO is making the company “lean and mean.” What is really happening is that the services provided by the new owners are being set aside for the purpose of making the company as a whole appear to be thriving when it is really cutting a service previously provided for customers. It looks really good on the stat column. Numbers do not lie. Let’s go play golf and congratulate ourselves. What if we could do the same thing I education? turn it into a commodity like we have finance or identity theft protection? We could scrub some of that trillion dollars people spend on education off on our own pockets so we could live like we want to.
Hanaur sees pitchforks in all of this.
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What you describe is the type of hedge fund thinking that fuels privatization.
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Since the 1970s, productivity (the value produced by workers) has almost doubled in the US, and wages have remained almost flat. In such a situation, Trump and McConnell decide that their most important priority is giving a big tax cut to the wealthy and to corporations. And working-class Americans in places like Ohio and Tennessee and West Virginia and Arkansas and Florida go to rallies and thank Trump for making America great again. Well, this is not going to last. It looks as though the Dems may sweep Texas in 2020, and every Florida election, of late, has been neck-and-neck (without the efforts of the Repugnicans of Florida to depress the vote, they would never win a statewide election again).
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“And working-class Americans in places like Ohio and Tennessee and West Virginia and Arkansas and Florida go to ….”
True enough. But how do you explain the economic problems to people who are looking past that to the moral terpitude they see in the changes in their society? They look at their world with great fear. This is why Trump wins.
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The ironic thing is that while Trump will pander to the extreme right, he himself has never held any of those views and privately mocks them–mocks Pence, for example, as being backward.
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We have often wondered whether trump actually believes the racist rants he uses to stir the fear in his base. It is even more of a guess as to whether he shares any of the attitudes of the religious part of his base. Or whether, for that matter, the justices he has appointed really share the religious views of the people who look to them as saviors of the country.
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Trump has never shown the least interest in religion. I seriously doubt that he has ever read any part of the Bible or had any kind of religious education.
He uses the Evangelicals as they use him.
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see
https://www.theatlantic.com/politics/archive/2017/05/donald-trump-liberty-university/526650/
Pres. Trump has made many overtures to the religious community, especially the conservative evangelicals. I remember when he made a quote about “2 Corinthians”, when he should have said “Second Corinthians”. I am certain that his knowledge of the New Testament is spotty at best.
There is very little political risk, in aligning yourself with the religious right. Trump is not the savviest politician who ever occupied the W.H., but he is spot-on accurate in his assessment.
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Trump: You are not going to let other people tell you what you believe , especially when you know that you are right.”
Lies to get votes is all this is. Empty-headed Trump.
Jesus: “Love your enemies, do good to those who hate you, bless those who curse you.”
Trump: “When people wrong you, go after those people, because it is a good feeling and because other people will see you doing it. I always get even.”
Jesus: “Those who exalt themselves will be humbled, and those who humble themselves will be exalted.”
Trump: “Sorry losers and haters, but my I.Q. is one of the highest — and you all know it! Please don’t feel so stupid or insecure, it’s not your fault.”
Jesus: “Blessed are the merciful, for they will be shown mercy.”
Trump: “I’m in total support of waterboarding. It has to be within the law, but I have to expand the law.”
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Welcome to life in the New Feudal Order
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Jesus: “Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”
Trump: “Part of the beauty of me is that I’m very rich.”
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LOL. Carol, may I quote you on this?
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Bob Shepherd: Of course you can quote me.Too bad there is such a huge discrepancy between Jesus and the Orange Swamp Monster who is worshiped by some ‘Christians’.
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It’s extraordinarily hilarious that people claim to be followers of both. It’s like claiming to be a vegan butcher.
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It is unfortunate that EPI only include the value of equity in the CEO compensation, but apparently did not include it in the “typical worker” compensation. Equity in the company is a standard part of compensation in the IT industry.
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Gosh, who knew that those workers at Walmart were rolling in dough because of their “equity” in the company?
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14.5 million American workers have some sort of plan in which they receive equity. That’s out of 160 million workers.
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Bob,
And many of those are people in the industry that has seen by far the greatest increase in productivity: information technology. If EPI ignored the equity stake for my son the software engineer, for example, they would miss the vast bulk of his compensation (or not, depending on how things work out, but it looks rather good for him). Proper accounting would go far in reducing the productivity/wage gap that you talked about in the earlier post.
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Hmmmm. Perhaps it would make a dent in it. But the fact remains that it’s a very small percentage of workers who are getting an equity stake. I would like to see that percentage VASTLY increased.
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A tiny dent in it. Again, 160 million American workers. Only 14.5 million of them receiving any equity in the companies they work for.
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I don’t think you want to stake your reputation as an economist, TE, on a paper claiming that the productivity/wage gap is an artifact of not taking into account equity compensation. But if you write such a piece, by all means, send me a preprint. LOL.
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Bob,
Surely you have noticed the many Mercedes and BMWs in factory parking lots.
And the one million Walmart employees! Forget their low hourly wages. They must have equity in Walmart, why else would they work for so little?
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I guess that those Walmart employees, like teachers in America and just about everyone else, don’t care a hoot about their low wages because they know that come retirement, they can cash in those multi-million-dollar ESOPs and go live like rajas.
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Bob,
I think it is a good idea to consider less aggregate numbers. You spoke of the large increase in labor productivity. How much more productive do you think a Walmart associate is now compared to 30 years ago? Or we could even be less aggregate. How much more productive is a Walmart greater today compared to 30 years ago?
We could leave Walmart and other brick and mortar retail stores and go to the arts if you like. How much more productive are classical musicians than they were 30 years ago? Can the New York Philharmonic play Hyden’s Symphany #22 in less time now? Can it now be played with half the number of musicians with no loss in quality thanks to productivity increases?
My point, of course, is that there has been little or no productivity increases in many jobs and large productivity increases in some jobs that have caused the average productivity to increase. Look at the sectors where there actually have been large productivity increases and you will find both equity and BMWs.
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How much more productive are classical musicians than they were 30 years ago?
Classical musicians typically don’t earn the bulk of their living by playing. They earn it by teaching. And there, they are MUCH more productive now than they were because teaching techniques have grown so much more refined. Young people can be taken from beginner to prodigy status much more often and predictably than in the past. Bach had a hard time finding people who could play his stuff. We are now living in a renaissance of playing on a wide variety of instruments–we have lots and lots and lots of truly great young pianists and guitarists. However, TE, your point is cogent and interesting.
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Bob,
TE’s point about the lack of productivity gains for a string quartet is well-known, even beyond the world of economists. It is known as Baumol’s “cost disease.”
https://en.m.wikipedia.org/wiki/Baumol's_cost_disease
It takes four musicians to play a string quartet now, the same as 200-300 years ago. They can’t play faster. No productivity gains.
“Baumol’s cost disease is often used to describe consequences of the lack of growth in productivity in the quaternary sector of the economy and public services, such as public hospitals and state colleges. Labor-intensive sectors that rely heavily on non-routine human interaction or activities, such as health care, education, or the performing arts, have had less growth in productivity over time. As with the string quartet example, it takes nurses the same amount of time to change a bandage or college professors the same amount of time to mark an essay today as it did in 1966, as those types of activities rely on the movements of the human body, which cannot be engineered to perform more quickly, accurately, or efficiently in the same way that a machine, such as a computer, have. In contrast, goods-producing industries, such as the car manufacturing sector and other activities that involve routine tasks, workers are continually becoming more productive by technological innovations to their tools and equipment.”
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Thanks for this info, Diane!
My point was that there have been significant productivity gains even there because one can, today, get fine string instrument players more efficiently because of vast improvements in training techniques. So, the whole system for producing that performance of that string quartet has, in fact, become considerably more productive. This has actually been a big problem for musicians because the competition has become quite fierce. There are simply a LOT of really high-quality musicians coming out of schools now. In the past, musical training was a much more hit-or-miss affair than it is today. A few future virtuosi were able to connect with a few virtuoso teachers.
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Bob Shepherd I’m not sure where this conversation is going, but it seems to me there is a missing distinction at the core of it? That is, different kinds of activities and “products” have vastly different criteria for judgments of quality? So that we judge the technical quality of a CD quite differently from the quality of music we hear on it. <–different example, same principle of difference.
Ignorance of that principle, BTW, and problems associated with it for the last two centuries (at least), is but one problem of the many that are at the core of educational curriculum. CBK
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And even in sectors like retail, automation has increased productivity.
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And, anticipating an objection, I do know that automation-related productivity increases are result, primarily, from capital rather from labor, but I would argue that that productivity has often made labor a lot more unpleasant–have a look at what automation has done to the quality of work life of stock pickers (in say, an Amazon warehouse) or of telemarketers (whose lives have been made a total hell by real-time productivity tracking and work rules based on this technology).
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BMWs? I assume that you don’t mean Bavarian Motor Works or Big Maine Woman. Sorry, TE, can you explain this term?
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I suspect that automated checkout, RFIDs, touch-screen customer portals for locating products, and other technologies have increased the productivity of Walmart stores considerably.
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Two Steps to How to Remain Insanely Wealthy: Soft Slavery
(1) Keep worker wages at a minimum: so that the “working poor” exhaust themselves (and their political spirit) just trying to keep their kids fed and a roof over their heads;
(2) Control Congress: cut taxes and end social programs (that might help those working poor),
. . . so that those same working poor BOTH:
(a) cannot pay for their basic needs; and (b) cannot depend on the government for services they, again, cannot afford, even though they work overtime and/or two jobs.
It’s easy, so that our resident moral morons should be able to grasp it. CBK
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Great term “soft slavery,” otherwise known as the “gig economy,” in which the little people scramble by working two or three part-time jobs to put food on the table and a roof over their heads. They cannot afford much else. Then, the rich people look down on the working poor and tell them that they should learn to save! Save what! They live paycheck to paycheck
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Soft Slavery . . . not a new idea. It comes from the eye-opener book by Albert Memmi: “The Colonizer and the Colonized.” The book was deemed by the LATimes as “an invaluable warning for all future generations” (written in 1957, published in 1965). (I don’t remember if Memmi used the term “soft slavery,” but the idea is clear in his work:
Keep the colonized at a political place where they have just enough to hang on to–to keep them from revolting; but not enough to allow them time or freedom to collaborate or to think about their own situation in relation to the colonizers.
So “soft slavery” works. It also resonates with Goldie Locks and her not-too-big, not-too-little, but “just right” bed; only with the colonizers (oligarchs), and their colonized (the working poor), it’s the underside of that tense existence. It’s far from “just right,” but is rather unjust, and a place of “quiet desperation.” CBK
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retired teacher: Some people just don’t understand living paycheck to paycheck.
I’ve written comments online and have gotten rebuttals because they believed that I wasn’t trying hard enough.
I was a single parent teacher who lived very badly from paycheck to paycheck. I made necessary payments and thought about the scarcity of money around 95% of the time. I saved $50 ONE YEAR.
I wasn’t able to save until I worked overseas and got a decent paying job.
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Carolmalaysia Same here–my mother had four children when my father left. California trained her to be a seamstress, but then she worked at Capwells, where the men tailors made much more than the women because “men had families to support” (no kidding). My guess is the rich at the time felt good about providing a “way up” and where now she wouldn’t be dependent on social services. <–there it is again, soft slavery. We usually ran out of food money around the 25th of each month. And doctors? Ha. It’s a little different now, but not much. CBK
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**So, how does Rush know what “the left” is going to say? Because even he can recognize the truth when he hears it. He’s using another fascist method: anticipate the truth, call it a redundant lie, put it in a conceptual box, and light a match to it.
Here’s a truth: Rush Limbaugh is just another moron with a microphone. CBK
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The 2008 crash was resolved by bailing out the banks, allowing CEOs to walk away with obscene bonuses and/or golden parachutes, while ordinary Americans by the millions lost their jobs, homes and savings (often illegally, as in the case of homeowners who were foreclosed even though they were paying their mortgages). Both the GWB and Obama administrations were responsible for this.
Yet Trump is some kind of unique, unprecedented evil. Go figure.
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It’s now official: consumers have plenty of cash. [His English gets a little mangled. “it is not even close!”.. Huh?]
……………………………….
Donald J. Trump
✔
@realDonaldTrump
The United States is now, by far, the Biggest, Strongest and Most Powerful Economy in the World, it is not even close! As others falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash. Business Optimism is at an All Time High!
75.9K
10:26 AM – Aug 15, 2019
Twitter Ads info and privacy
36.9K people are talking about this
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carolmalaysia Others fail; while we win. What better example of a zero-sum-game do we need. CBK
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“CEO compensation has grown by 940% since 1978. Worker compensation, however, grew only 12% during the same period.”
And yet, “According to the Bureau of Labor Statistics consumer price index, prices in 2018” were “285.13% higher than average prices throughout 1978.” https://www.in2013dollars.com/1978-dollars-in-2018
CEOs have made out like bandits, while so many of us have struggled for years just for basic survival, even though we paid our dues by working hard for over 40 years.
Living hand to mouth, paycheck to paycheck on unlivable wages for decades means that our Social Security (SS) is likewise very low, and we had no disposable income that could be saved to supplement our retirement. People like me can’t survive on such low SS so we don’t get to ever really retire and have to keep working until we die. This is particularly distressing when you are experiencing every day how your body is deteriorating. No wonder suicide rates are high in seniors: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5916258/
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But hey, some tech workers are getting equity. LOL.
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Right, and that does not include Walmart “associates” (their typical employees)
The Waltons secretly buy life insurance for their employees and they are the beneficiaries of that, so THEY can get the payoff when employees die, not the families. See: https://www.youtube.com/watch?v=RXmnBbUjsPs
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homelesseducator: Who are the people in the audience who are cheering CEO Lee Scott who is a ‘lover of the workers” at the beginning of the film? It must be the investors since they get all worked up about record sales and record earnings.
I never go to Walmart. I can’t stand how they treat their employees. Fortunately, there are many other stores in my area. I won’t say they are ‘mom and pop’ type.
I have a friend whose husband worked at Walmart. He was higher up than people on the floor but was struggling to survive. Both have illnesses.
I can’t see any breaking up of monopolies while Trump and the GOP are in charge. Money for the wealthy is ALL that counts.
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It’s really distressing that this is the case for so many of our seniors in one of the richest countries in the history of the world. If you can, consider moving to a cheaper part of the country. Costs vary a lot from one place to another.
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Thanks. I know it’s cheaper in red states, but I don’t want to spend my last years on this planet in a red state with so many egocentric, anti-social people. Anyways I don’t have the money to move.
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Gotta wonder about people who have a life history of using their purchasing power as a solution to virtually every issue, especially when that kind of over-indulgence has gotten them into a lot of trouble in the past. So why does Trump want to buy Greenland now?
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Reteach 4 America: Trump wouldn’t want to give Melania more than a birthday card. She gets to spend time on her birthday alone.
The other two reasons sound good.
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The article compares CEO-to-worker salary in 1988 [when economy was booming] of 58-1 to today’s ratio [when economy has long been stagnant] of 270-1.
Data is based on CEO salaries for 350 top corporations – they averaged $14-17 million depending on how you calculate the stock options. Call it $16 million. Average worker at the corporation [1/270] gets about $60k. If we dial the ratio back to 1988 levels, CEO would be getting 3.5 million. Analysis is clear that the excess pay [$12.5 million] obtains nothing of value for the corp, it’s just due to CEO power to extract it. That’s $4.4 billion going every year to the personal bank accounts of 350 individuals – “just cuz.”
Gives a good handle on the minimum tax revenues we’re missing out on from our top 350 corporations. Loose change. They’re not using it for costs, overhead or profit
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