CEO pay 231 times greater than the average worker

There have been some interesting responses by conservatives to the new data Natalie Sabadish and I have released on the CEO-to-worker pay ratio.

Apparently, our study reporting that CEO pay has fallen during the fiscal crisis and is far down from the dizzying heights of the tech bubble in 2000 is taken to mean that that any concern about the growth of top incomes is now out-of-date and inappropriate.

Conservative columnist Wynton Hall at Breitbart.com writes:

“A graph by the Economic Policy Institute  shows that while the relative pay of CEOs shot up in the 1990s, it has since fallen by nearly half, a trajectory that hardly supports the class warfare rhetoric of Occupy Wall Street and the Obama Administration.”

And Greg Mankiw also touted our findings, writing, “The relative pay of CEOs skyrocketed during the 1990s and has since fallen by about half.”

The attention and the recognition of the accuracy of our empirical work are much appreciated. A few comments are in order. First, it seems that these folks are celebrating that a non-problem, at least in their view, has been solved. After all, I don’t recall conservatives being upset by the roughly $20 million CEO pay packages in 2000 or the $18 million CEO packages in 2007. So, it is hard to understand why they feel so gratified by CEO compensation packages averaging $11 or $12 million in 2011..

Second, while it is true that the CEO-to-worker compensation ratio fell from 411.3 in 2000 to 209.4 in 2011, that still means that CEO compensation is spectacularly high. For instance, that means that the average CEO earns in 10 hours what a typical worker earns in an entire year. Moreover, as we reported in our study (page 4):

Read More at EPI.org http://www.epi.org/blog/conservatives-say-ceo-compensation-levels-are-fine/

##