The rich get richer, and the poor get poorer.
Apparently this has never been truer than in 2012.
In 2011, the average CEO salary was $9.6 million, an all-time high, but now it turns out that CEO salaries in 2012 averaged a whopping $9.7 million, for the head of a typical large public company. Overall, health care and media CEOs picked up the highest pay, while utility CEOs enjoyed a meager $7.5 million.
Why do CEOs earn so much? Companies say they need to attract the best talent, and huge salaries are the way to do it. Whatever their justification, the shocking fact is that the average CEO in 2012 earned 354 times more than the average worker.
This was not always true. Income inequality has greatly increased over the past 30 years: in 1980 the average CEO made 50 times more money than the average worker while today the average CEO makes over 300 times more than the average worker.
Thanks to deregulation in the 1980s the top one percent of Americans have seen skyrocketing salaries, while worker pay has stagnated.
What does this mean for us regular folk?
From Pew Social & Demographic Trends:
During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%, according to a Pew Research Center analysis of newly released Census Bureau data.
From 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.
Looked at another way, the top 1 percent of Americans control 43 percent of the nation’s financial wealth, while the bottom 80 percent control only 7 percent of the wealth. Incredibly, the wealthiest 400 Americans have the same combined wealth as the over 150 million people who make up the poorest half of Americans.
The United States is not alone in developing this growing divide between rich and poor. The Organization for Economic Cooperation and Development (OECD) recently released a report showing that economic disparity has risen more from 2007 to 2010 than in the preceding 12 years in developed countries. The greatest discrepancies among OECD countries were found in Chile, Mexico, Turkey, the United States and Israel, while the lowest were in Iceland, Slovenia, Norway and Denmark.
What’s more disturbing is that the United States currently has more income inequality than Pakistan or the Ivory Coast, according to a study by ThinkProgress using data from the CIA factbook. Income inequality in the United States is actually higher than at any other time in modern history since the Great Depression.
While the average CEO makes that $9.7 million, nearly 50 million Americans, more than 16 percent of the population, are barely surviving. Figures released by the Census Bureau in 2012 found an increase in poverty numbers, going from 49 million in 2010 to 49.7 million in 2011.
One of the most depressing and shameful findings is that almost 20 percent of American children continue to live in poverty.
Yes, it’s exactly what you thought: the rich are getting richer, and the poor are getting poorer.
Join us in defending the truth before it’s too late
The future of independent journalism is uncertain, and the consequences of losing it are too grave to ignore. To ensure Truthout remains safe, strong, and free, we need to raise $43,000 in the next 6 days. Every dollar raised goes directly toward the costs of producing news you can trust.
Please give what you can — because by supporting us with a tax-deductible donation, you’re not just preserving a source of news, you’re helping to safeguard what’s left of our democracy.