Executive Pay Highlights the Wealth Gap Between Rich and Poor
1 year ago
CEOs of today are earning more than 10 times what CEOs of the 70s did.
A recent article discussed the life of Kenneth J. Douglas, former CEO of Dean Foods. In the 1970s, Dean made the equivalent of $1 million dollars per year, and lived a nice lifestyle. He had a four bedroom home, joined a country club and had a Cadillac given to him by the company. Life was good, but somewhat normal. This was back in the day when CEOs lived like normal human beings, not corporate God-like creatures with no end to their wealth.
Since that time, things have changed. The current CEO, Gregg L. Engles, earns 10 times more than Douglas, over $10 million per year. He has a six-million dollar home on 64 acres of property. He even belongs to four different country clubs and has access to a private jet provided by the company. All the while, the wage of the average American worker has remained stagnant, labor unions are being undermined, and our government is in an unprecedented fiscal crisis, in part because it’s become a crime to expect the wealthy to pay more in taxes.
Engles’ situation is not uncommon for America today. The gap between the rich and the poor has reached levels that haven’t been seen since the Great Depression. In 2008, the top .1 percent of Americans took home over 10 percent of the personal income generated in the United States that year. The top 1 percent of Americans took in 20 percent of the personal income of our country.
Economists are now stating that the rise in the pay of company executives is driving the gap between the rich and the poor. The top .1 percent of Americans consists of those earning $1.7 million or more, including capital gains. In that group, 41 percent were executives or managers of non-financial companies. Another 18 percent were managers at financial companies.
The gap between the rich and the poor can serve as a great threat to national security. Republicans, who are known to look out for the interests of the wealthy, are seeking cuts to programs for the poor to fill in government shortfalls. President Barack Obama believes that the wealthy can afford to pay more in taxes, while programs for the poor should be protected. Given that the wealthy have the greatest impact on policy decisions of the nation’s leaders, it is certain that their voice will be amplified in American politics.