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CEOs at Major US Firms Earn 271 Times as Much as Employees

  • Jim Randle

FILE - Starbucks employees prepare coffee in the lobby of the company's annual shareholders meeting in Seattle, Washington. That boss-to-worker pay ratio is slightly lower than it has been in the past few years, but is still "light years" higher than the 20-to-1 gap between workers and bosses in 1965, or the 59-to-1 difference that was measured in 1989.

A study by the Economic Policy Institute says the chief executive officers of America's largest firms were paid an average of $15.6 million each in 2016.

In a report published Thursday, authors Lawrence Mischel and Jessica Schieder say that amount is 271 times as much as a "typical" worker's earnings at those same corporations.

That boss-to-worker pay ratio is slightly lower than it has been in the past few years, but is still "light years" higher than the 20-to-1 gap between workers and bosses in 1965, or the 59-to-1 difference that was measured in 1989.

CEOs' pay has grown far faster than typical workers' earnings in recent decades, and it also has increased at a much faster rate than stock-market valuations for those same companies.

Compensation figures include salary, the right to buy stock at certain prices, and bonuses, according to EPI, which is a nonpartisan think tank that focuses on the concerns of low- and middle-income workers.

The website Salary.com said CEOs are highly paid because their skills and responsibilities are "extreme," and there is a limited number of people who can perform these functions.

At the other end of the economic spectrum, meanwhile, the lowest paid full-time U.S. workers get a minimum wage of just over $15,000 a year. While most workers earn more, and many states have a higher minimum wage, those on the bottom rung earn around 1/1,000 as much as top-level CEOs.

The U.S. national minimum wage of $7.25 per hour has not been increased in eight years. A group called Business for a Fair Minimum Wage contends inflation during that period has cut the value of those already-low wages by about 12 percent.

While many businesses argue that raising the minimum wage will result in fewer jobs at the lower end of the economic spectrum, Business for a Fair Minimum Wage said higher wages for the lowest-paid workers could stimulate demand and help the economy.

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