The site, 2011 Executive Paywatch, notes that total compensation for C.E.O.’s averaged $11.4 million in 2010, up 23 percent from the previous year, based on the most recent pay data for 299 major companies.Did you do 23 percent better in 2010 than 2009? I sure didn't. Did your company add that much value to its bottom line? Maybe, maybe not.
The Web site notes that the C.E.O.’s at those 299 companies received a combined total of $3.4 billion in pay in 2010, enough to support 102,325 jobs paying the median wage.
The Web site notes that chief executives’ compensation is 343 times the median pay — $33,190 — of American workers. It adds that the $11.4 million average for C.E.O.’s is 28 times the pay of President Obama, 213 time the median pay of police officers, 225 times teacher pay, 252 times firefighter pay, and 753 times the pay of the minimum-wage worker.
I don't doubt that CEOs create value for their companies, and they're always going to make more money than rank-and-file workers. But they didn't used to outstrip the pay of their workers by quite so much, and it's hard for me to find a good economic reason why that's so now. My free-market friends will roll their eyes, but I think oligarchic brand of capitalism is--and probably should be--simply unsustainable.
Why? Because CEO pay continues to skyrocket when stuff like this is happening to regular American families:
7. Employer-provided health insurance benefits continue to disappear. The share of people with employer-provided health insurance dropped from 64.2 percent in 2000 to 55.8 percent in 2009. This is the lowest share since 1987 when the Census started to track these data.You can't blame this on Barack Obama. The employer benefits were dropping in 2009--before ObamaCare passed. I guess we can argue about the stimulus in regards to the other numbers, but count me as somebody who suspects things would've been much worse without it.
8. Family incomes drop sharply in the recession. Median inflation-adjusted household income fell 3.6 percent in 2008 and by another 0.7 percent in 2009. It stood at $49,777 in 2009, its lowest level in inflation-adjusted dollars since 1997. White family income stood at $54,461, compared to African-American family income, which was $32,584, or 59.8 percent of white income. Hispanic family income was $38,039 in 2009, or 69.8 percent of white income.
9. Poverty continues to rise. The poverty rate stood at 14.3 percent in 2009—its highest rate since 1994.
That's not the point. The point is that a society chooses to organize itself along free-market lines because a free market helps the vast majority of citizens sustain themselves. For most of American history--and there have been exceptions--that has been the case. If the system only works at the top, if the rest of us have only bread and circuses to console us, then trouble is coming ... and all the Ayn Rand movies in the world won't change that. Defenders of the free market should concern themselves with inequality issues because that's probably how they can best defend free markets.