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Today in the New Gilded Age


Michael Hiltzik on the wonderful times we live in:

The first government-mandated disclosure of the ratio of CEO vs. average worker pay has surfaced, and as has been widely expected, it’s obscene. Technology company Honeywell, in a proxy statement dated Friday, disclosed that its CEO, Darius Adamczyk, was paid 333 times as much as a median Honeywell employee last year.

The raw figures are these: Adamczyk, $16.8 million. Median employee: $50,296.

Honeywell is the first major public corporation to make the disclosure, which was required by the Dodd-Frank financial reform act and is subject to rules implemented by the Securities and Exchange Commission starting this year. Its 333-to-1 ratio is in the neighborhood of what informal surveys have been projecting for public corporations in general.

The labor-oriented Economic Policy Institute, for example, estimated that CEOs were making as much as 270 times that of their average workers in 2016. The Institute for Policy Studies, which tracks indicators of income and wealth inequality, estimates the 2016 ratio at 347-to-1.

“This is a confirmation of research done up to now,” Sam Pizzigati, a fellow at IPS, says of the Honeywell data. He expects some corporations to show much larger discrepancies. That could show up especially in the retail sector, where median earnings are likely to be well below the $50,000 level of Honeywell’s heavily professional workforce.

Walmart, for instance, says its average hourly pay for full-time workers was to reach $13.38, following a company-wide wage increase in 2016. That’s about $27,800. Its CEO, C. Douglas McMillon, was paid $22.4 million last year. That would create a ratio of about 805-to-1 based on hourly wages alone.

Democrats should run on creating a law that caps the ration at 100:1, which includes total compensation. Or even lower, but 100:1 is a nice round number. Of course, Democrats won’t do this, as most are still afraid of strong economic populist rhetoric, which reminds me of Conor Lamb’s incredibly disappointing disagreement with a $15 minimum wage in the union-heavy district in which he is running in the upcoming PA-18 special election. This doesn’t mean that we shouldn’t help Lamb win; obviously, he’s not going to be in charge of setting the minimum wage and he’s far better than Rick Saccone, who is awful. But why commit such an unforced error? What does this accomplish? Yet we see this sort of equivocating toward corporate America again and again when it is completely unnecessary.

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