From Inequality.org (https://inequality.org/):
This summer, low-wage workers are uniting like never before. One major reason? The huge gap between the hundreds of millions paid to CEOs, and the poverty wages paid to average workers.
The latest Inequality.org report — profiled in the New York Times, Fortune, CNN, and The Guardian — shows that since the pandemic started CEOs have continued getting massively richer, at the expense of their employees.
The good news is that we don’t have to hope for a legislative miracle to change things. President Biden can single-handedly start cracking down on such extreme disparities, by setting new standards for federal contracts.
Add your name to our petition to President Biden at https://actionnetwork.org/petitions/president-biden-outrageous-ceo-pay: take executive action to rein in CEO pay.
The media coverage is about our 28th Institute for Policy Studies Executive Excess report.
Through this annual report and our advocacy, we’ve been a leading force in exposing Corporate America’s obscene pay disparities and calling for responsible policy solutions.
The past year “could have been a time when companies used rising profits to level the pay playing field,” my colleague Sarah Anderson explained to the New York Times. “Instead, we haven’t seen a very big shift in pay equity.”
Our report focuses on 300 low-wage corporations, finding that the average gap between CEO and median worker pay increased from 604 to 1 in 2020 to a staggering 670 to 1 in 2021.
At more than a third of these low-wage companies, median worker pay did not even keep pace with inflation. Were these corporations simply short on cash? Hardly. Altogether, they blew $37 billion last year on stock buybacks.
“There is a real trade off when companies are putting so much of their resources into stock buybacks that inflate their CEO pay,” Sarah told Fortune. “Every dollar that’s spent that way is a dollar that’s not spent on things that might help lower their employee turnover rate, or raise worker’s pay and better position them to be competitive in the future.”
With the $13 billion Lowe’s spent on buybacks, the company could’ve given each of its 325,000 employees a $40,000 raise. Instead, median pay at the company fell 7.6 percent to $22,697.
President Biden has the power to crack down on such extreme disparities without waiting for Congress to act. Here’s how Sarah explained what he can do in a story in The Guardian:
“’The president could wield the power of the public purse by introducing new standards making it hard for companies with huge CEO-worker pay gaps to land a lucrative federal contract,’ Anderson said.”
Incentivizing narrower pay gaps at these firms would have a huge impact, since an estimated 25 percent of U.S. private sector workers are employed by federal contractors.
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