Monday, April 11, 2011

Average CEO pay increases 20% to $11.5M; Average worker pay increases 2%


Looks like the old trickle-down theory is hard at work once again.  CEO pay in the United States increased by 20% in 2010 to $11.5M.  The average worker will see an average increase of about 2%.  You add in inflation, and the average worker will make about $0.58 more a week, according to the Bureau of Labor Statistics.  No, I didn't misplace the decimal point.


It is this lack of parity that is destroying this country.  How is it that the real producer is getting hosed?  Do you mean to tell me that the average shareholder would rather see that money being spent in bonuses instead of, perhaps, receiving a higher dividend or seeing it reinvested back into the company.  Or...Orrrrr...and I know this is radical...they could increase worker pay.  Woah!  I know.  Mind-bending.

Those millions of dollars in bonuses, they aren't being spent.  They are sitting in bank accounts.  If that money were to be used to increase worker pay, the workers would actually spend that money.  That's the inevitable result of a bubble-up concept, trickle-down's virtuous cousin.  That money gets spent, taxed, reinvested, and paid back out.

Many fiscally conservatives will point to the fact that they deserve that money because of hard work and company success.  To this, I point to Time writer Stephen Gandel.

"...if higher profits and a higher stock price warrant better pay for CEOs, why doesn't the same ring true for the average employee. Workers at Disney's Florida amusement park Walt Disney World fought for months last year and early this year for higher wages. What they finally ended up getting, in a new contract settled earlier this month, was an annual raise of 3% to 4% over the next three years. The workers will get a bonus, too, of $650, a mere 20,769 times less than Iger's bonus. As long as it remains that only a small segment of our population will be rewarded for better performance, while the rest of us do more and more work for the same pay, the wealth gap in America is certain to get worse."

People who get it:

1. Steve Jobs, Apple Inc., $1
 2. Kenneth Lewis, Bank of America Corp., $32,171
3. Vikram Pandit, Citigroup Inc., $128,751
4. Thomas Hoaglin, Hunington Bancshares, $174,364
5. Eric Schmidt, Google Inc., $245,322

People who don't:

Phillippe Dauman, Viacom, $84,500,000
Ray R. Irani, C.E.O. of Occidental Petroleum, $76,000,000
Lawrence J. Ellison, Oracle, $70,000,000


  1. I do agree that there are multiple ways to spend a profit. The options that you offer would also be acceptable. There are good people and bad people in every walk of life.
    But I do want to make one point becaues I think it's important. The "rich" people don't put their money into their mattresses and save it for a rainy day. The greed that they demonstrate by taking that money, is also the same characteristic that causes them to want to make more. Notice that the average worker's salary went up greater than inflation? When you boil that down, that means that the average American worker was able to get a raise, or at least not lose money, during an inflation period, and even while the CEOs that run the complany generating those raises were skimming off the top.
    What do rich people do with their money? The short answer is that they provide jobs. It doesn't matter whether they expand their business and hire more people, invest in the stock market and provide capital to other companies, put it in the banking system to be loaned out to other people for their own uses, or buy a brand new private jet or luxury yacht. The people that make those yachts and jets have families to feed and bills to pay too. The people that want to borrow money want the banks to stay in business and be there for their needs. The workers for that company are happy that they didn't get laid off and actually made more money than last year.
    Supply-side economics isn't someone's opinion about how things work, it's observational and logical analysis of a free market. The only thing that clogs up the gears isn't the rich people, it's the constant meddling and regulating that interferes with normal supply and demand. It's the politicians that feel they know better than the average American citizen. That they know what you want more than you do and they will spend your money for you. You're just an idiot and need to be cared for in their opinion.
    "Trickle-down" does work. You just have to follow the money past the initial stage. You can't say a fountain doesn't water the grass if you only look at the 1st tier of a ten-tier fountain and don't see any grass in there . . .

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