Today, the New York Times released its yearly Equilar 200 Highest paid CEO rankings.
Among the eye-watering statistics, this one leaps off the page:
"At Live Nation Entertainment, the concert and ticketing company, an employee earning the median pay of $24,406 would need to work for 2,893 years to earn the $70.6 million that its chief executive, Michael Rapino, made last year."
Talk about perspective. So why are we suddenly privy to this information?
"This year, publicly traded corporations in the United States had to begin revealing their pay ratios — comparisons between the pay of their chief executive and the median compensation of other employees at the company. The results were predictably striking."
We have the Dodd-Frank banking regulations to thank for a new part of the law that took effect this year, which forces publicly traded U.S. corporations to disclose the pay ratios between their executives and the median income of other company employees. Dodd-Frank was passed in 2010 as a response to the financial crisis of 2007-2008. It’s worth noting the irony of this transparency clause coming into effect during the current Trump administration and its cabinet of billionaires. Though efforts are now being made in Congress to roll back parts of Dodd-Frank, it fortunately doesn’t look like the transparency part of the law is being repealed.
So aside from feeling fundamentally unfair in a world where extreme poverty is so rampant, why is this inequality such a dangerous issue?
"Critics of rising income inequality are quick to point out that sustained low wages can lead to reduced economic growth and marginalize large swaths of the population. Disposable income is needed for a healthy economy, and people need the time and resources to take care of themselves and their families.”
People with (often several) low-wage jobs struggle every day to make ends meet. As the article underlines, this limits their ability to be active within their communities, to volunteer at their children’s schools, or even participate in local politics. Meanwhile, in the companies included in this study, for the last three years, chief executive median pay climbed 5%, 9% and finally 14% in 2017.
As if this weren’t enough indication of systemic inequality, nearly all of these highest paid CEO's are white men.
This fact highlights the final point here: financial inequality is just another facet of societal inequality, which translates into all the topics Hateproof tries to bring more awareness to. At their heart, racism, sexism, and all the “bad-isms” are about imbalanced power dynamics; a more powerful group taking advantage of a vulnerable one.
Few places is this more transparent than in this growing financial inequity. And without a doubt, nothing positive can come from a world so out of balance.
It’s worth checking out David Gelles' piece here.