Corporations Expanded CEO-Worker Pay Gap During Pandemic
Thursday, May 20, 2021
LINCOLN, Neb. -- Many of the nation's largest low-wage employers, including FedEx, Tyson Foods, Walgreens and other brands familiar to Nebraskans, helped expand racial- and gender-pay inequity during the pandemic.
Sarah Anderson, global economy project director at the Institute for Policy Studies, and co-author of a new report, said in a year when front-line employees demonstrated how essential they are to the economy and public health, many companies changed their pay practices.
"But it was mostly to pump up CEO pay," Anderson explained. "Of the 100 companies we looked at, more than half of them rigged their own pay rules to give their CEOs 29% average raises, while their front-line employees made 2% less."
Companies moved bonus goalposts or changed rules to pay CEOs more than $15 million on average in 2020. The median worker pay was $28,000 dollars.
Women and people of color make up a disproportionately large share of today's low-wage workforce, and just 1% of CEOs in the 500 biggest corporations are Black. Corporate boards have argued high CEO pay is necessary to keep top talent.
Anderson believes the argument might have carried more weight in a non-pandemic year.
"It was really those front-line workers who were keeping our economy going," Anderson argued. "Going back into workplaces, taking a lot of risk with their own health to keep food on the tables for American families and to keep other services going that are critical to our society."
New legislation making its way through Congress and nine state legislatures would tax corporations with a CEO-worker pay ratio higher than 50 to 1. Under the Tax Excessive CEO Pay Act, Amazon, with a pay gap of 1,600 to 1, would have contributed enough in 2020 taxes to pay for more than 115,000 public housing units.
Anderson pointed out the measure would give companies a choice.
"They can narrow their gaps and avoid the tax, or they can continue to have these extreme gaps and pay a bit more in taxes, which we can put towards getting our economy back on its feet," Anderson outlined.
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