The term “income inequality” has become, as pointed out by Chicago Tribune columnist, Rex W. Huppke, something of a “term du jour” for those seeking to divide the body politic. In his column, “I Just Work Here” (Sept. 29, 2014), Huppke points to a global study by the University of Thailand and Harvard Business School, which “found that virtually everyone––regardless of political affiliation, age, socioeconomic status. Or level of education––believes CEOs are paid too much when compared with unskilled workers.” “What’s more,” he writes, “people dramatically underestimate actual pay inequality.”
Huppke goes on to note that co-author of the report, Harvard Business School professor, Michael Norton, says, “It was in all the countries in the sample, but even more than that, among people all the way to the left of the political spectrum and all the way to the right, and from people all the way at the bottom of the economic spectrum to all the way to the top of the economic spectrum. Every single group thinks the pay gap is too large.”
The report shows, “that in the United States, CEOs of S&P 500 companies earned an average of $12.3 million a year in 2012. Citing an average worker’s pay as $35,000 per year, the CEO-to-unskilled-worker pay ratio is more than 350 to 1. But American respondents believe that ratio is much smaller, only 30 to 1. And what ratio do Americans think would be ideal? About 7 to 1. That means the actual pay disparity between CEOs and unskilled workers is about 50 times larger than what Americans of all political beliefs and income levels think it should be,” Huppke writes.
For Rex Huppke’s entire column, click here.