Our new Gilded Age
This appeared in The St. Louis Post-Dispatch.
Average compensation for top U.S. executives exploded to nearly $19 million in 2017, up almost 18 percent from 2016, a new report says. If you don’t remember getting an 18 percent raise last year, it’s because you probably didn’t.
The report by the liberal Economic Policy Institute shows that typical wages remained virtually unchanged during that time. This has driven the pay difference between people at the top and those who work for them to its widest gap in a decade.
The findings don’t encompass the impact of the Republican tax-cut bill passed at the end of 2017, but we know that, after those cuts, wages this year have remained mostly flat when factoring in inflation. Of course they have; corporations are largely using their tax-cut windfalls to buy back their own stock — to the benefit of investors, including those $19 million-a-year chief executives — rather than raising wages. All indications are that the gap between the top executive pay and everyone else’s is going to be widened by tax cuts that proponents touted as good for workers.
The report shows those pay trends were already going in the wrong direction even before this budget-busting, economically unnecessary gift to the rich was passed by Congress and signed into law by President Donald Trump. It adds to the long list of reasons to halt reckless administration policies that would further reward the already-rich while throwing the economy further out of balance.
The report examined the salaries, bonuses, realized stock options and other compensation for top CEOs of the 350 largest firms in the country. It found they received, on average, $18.9 million each in compensation in 2017, a 17.6 percent rise from 2016. Typical workers’ compensation, meanwhile, rose by a virtually meaningless 0.3 percent.
That translates into a 312-to-1 ratio of pay between CEOs and workers. It’s not the highest gap ever — that would be the 344-to-1 peak of 2000 — but compared to ratios like those in 1965 (20-to-1), 1978 (30-to-1) and 1989 (58-to-1), it’s clear how off-the-rails we’ve gone in this, our new Gilded Age.
Again, the report’s numbers don’t even take into account the further widening of that gap expected from the tax-cut package. So it’s especially egregious for the administration to float ideas like it did last month, to index capital gains taxes to inflation — a roundabout way of giving yet another tax break to the investor class at the expense of everyone else.
The idea was so roundly trashed that we’ve not heard anything more about it, but keep an eye out. The Trump administration is on a clear mission to boost wealth for the wealthy and further widen income gaps that all in Washington should be working to narrow.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Tim Dwyer, Editorial Page Editor Paul Choiniere, Managing Editor Tim Cotter, Staff Writer Julia Bergman and retired deputy managing editor Lisa McGinley. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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