3 ms·
So in the 1970s, CEOs were compensated at about 20 times the average worker's compensation. In the late 1990s, the ratio zoomed up to about 300 times the avera
by panarky 11y ago
So in the 1970s, CEOs were compensated at about 20 times the average worker's compensation.
In the late 1990s, the ratio zoomed up to about 300 times the average worker's compensation, where it remains today.
What can explain this? Why have average inflation-adjusted wages stagnated or declined, while compensation for top people goes up by an order of magnitude or more?
Globalization? Decline of organized labor? Private equity? Financial engineering?
- stephengillie 11y agoThe article claims it's a change in social norms - nobody paid CEOs that much. Until, one day, someone did. From there, it was all just CEO perception and FOMO.
- GFK_of_xmaspast 11y agoClass warfare.
- bcheung 11y agoShort answer: leverage. The greater the leverage the more production can be multiplied and thus income. Some things that have amplified leverage are: 1) Access to a larger talent pool (globalization) 2) More educated people 3) The Internet 4) Access to financial capital and financial instruments 5) Access to foreign labor that is cheaper