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Confronting the CEO Pay Gap
The staggering gap between CEOs and workers is, at long last, getting some attention in Campaign '08. But there's still more to be done to tackle the gap. If candidates really want to turn up the heat with some well-documented, explosive facts, I'd advise them to check out the invaluable report released today by the Institute for Policy Studies and United for a Fair Economy.
I'd like to hear Senator Hillary Clinton make a stink about how the top 20 private equity and hedge fund managers pocketed an average of $657.5 million--22,225 times the pay of an average worker. I'd like to see candidates tackle the gross inequities in an economy in which the 20 highest paid figures in the private equity and hedge fund industry collected 3,315 times more in average annual compensation in 2006 than the top 20 officials of the federal government's executive branch--and that includes Bush and Cheney (when he'll cop to being part of that branch).
And while they deploy these heart-wrenching stats, I'd like to hear all of the candidates blast Senator Chuck Schumer for betraying the best traditions of the Democratic party by refusing to increase taxes on those fabulously rich hedgers and equity guys.)
There's much more in this terrific report. For example, overall, the 20 highest-paid executives of publicly traded corporations made, on average, 38 times more than the country's 20 highest-paid nonprofit leaders last year. The pay gap stretches even wider between the corporate and public sector. In 2006, the top 20 highest-earning CEOs made 204 times more than our 20 highest-paid military generals, and 212 times as much as the top 20 ranking members of Congress.
The report highlights six practical proposals for change--initiatives that include eliminating perverse tax incentives for excessive pay and using government contracting dollars to encourage more reasonable compensation. Tackling the gap is going to take concerted citizen action, smart research and bold policy changes. But the times are ripe. As the report's co-author Chuck Collins puts it, " Meaningful change could be on the horizon, as many political leaders are finally catching up to the public outcry to rein in excessive compensation."
Katrina Vanden Heuvel is editor of The Nation.
© 2007 The Nation