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Study: Boss Paid 271 Times More than Average Worker

FILE - Starbucks employees prepare coffee in the lobby of the company's annual shareholders meeting in Seattle, Washington, March 23, 2016.
FILE - Starbucks employees prepare coffee in the lobby of the company's annual shareholders meeting in Seattle, Washington, March 23, 2016.
Study: Boss Paid 271 Times More than Average Worker
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The chief executive officers of America's largest companies were paid an average of $15.6 million in 2016 says a recent study by an economic research group.

The Economic Policy Institute published the report written by Lawrence Mischel and Jessica Schieder. They say the average business leader’s pay was 271 times what an average worker earns at the companies they studied.

This chief executive-to-worker pay ratio is smaller than it has been in the past few years. In 2014, the ratio was 299-to-1, according to the report. However, it is still much higher than the 20-to-1 ratio between chief executives and workers in 1965. In 1989, that difference was 59-to-1.

In the last 30 years, the salaries of chief executive officers, or CEOs, has grown much faster than the pay of the average worker at the companies they oversee. In addition, CEO’s pay has increased much faster than the value of stock shares in the companies they lead.

To get their results, the researchers added up employees’ pay, special rights to buy stock at lower than market prices, and bonuses. The Economic Policy Institute is a research organization that studies the concerns of low- and middle-income workers.

According to the website, CEOs are paid very high salaries because their skills and responsibilities are "extreme." They say there is only a limited number of people who can perform these job duties.

The report also noted the earnings of low-paid workers. The lowest paid full-time U.S. workers earn a minimum wage of about $15,000 a year.

The minimum wage is the lowest amount of hourly pay a company can legally pay its employee.

Most workers in the U.S. earn more than the minimum wage, and many states have a higher minimum wage than the federal limit. However, workers who earn the least amount of money in the study earn about one 1,000th the pay of the highest earning CEOs.

The U.S. federal minimum wage is $7.25 per hour. It has not been increased in eight years. According to the group Business for a Fair Minimum Wage, the buying power of that amount has decreased by about 15% because of inflation.

The issue of raising the federal minimum wage has been controversial. Many businesses say that raising the minimum wage will result in fewer low-paying jobs.

The group Business for a Fair Minimum Wage disagrees. It said that raising the minimum wage for the lowest-paid workers could help the economy by increasing the amount of money people have to spend.

I’m Phil Dierking.

Jim Randle reported this story for Phil Dierking adapted his report for Learning English. Mario Ritter was the editor.

What do think the ratio of boss-to-worker pay is in your country? We want to hear from you. Write to us in the Comments Section or on our Facebook page.


Words in This Story

bonus - n. an extra amount of money that is given to an employee​

controversial - adj. relating to or causing much discussion, disagreement, or argument​

ratio - n. the relationship that exists between the size, number, or amount of two things and that is often represented by two numbers​

salary - n. an amount of money that an employee is paid each year​