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How big is the pay gap between a top 100 CEO and the average worker?

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Presentation on theme: "How big is the pay gap between a top 100 CEO and the average worker?"— Presentation transcript:

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1 How big is the pay gap between a top 100 CEO and the average worker?
Discussion Question 1: How big is the pay gap between a top 100 CEO and the average worker?

2 CEO-to-Worker Pay Gap Soars
Sources: CEO pay from “CEO Compensation Survey,” Forbes, April or May issues, ; earnings for workers from Bureau of Labor Statistics.

3 Wage Gap: Top 100 CEOs vs. Average Worker (2014)
$30,750,000 Wage Gap: Top 100 CEOs vs. Average Worker (2014) Source: Labor Institute

4 Why Have Wages & Productivity Stopped Rising Together?
Discussion Question 2: Why Have Wages & Productivity Stopped Rising Together?

5 Financialization: Primary Cause of Wage Stagnation
Source: International Labor Organization, Global Wage Report

6 Wall Street Wages Have Soared
In 2010 dollars. Sources: Data compiled by the author from Bureau of Economic Analysis, "National Income and Product Accounts Tables, Section 6--Income and Employment by Industry,” at accessed March 28, 2012; Average compensation of employees adjusted for inflation using the Bureau of Labor Statistics CPI Inflation Calculator at

7 Financialization and the Productivity Gap
Financial vs. Non-Financial Compensation Real Wages vs. Productivity Increases

8 How does so much wealth end up on Wall Street and with top CEOs?
Discussion Question 3: How does so much wealth end up on Wall Street and with top CEOs?

9 The Better Business Climate
Taxes Profits & Investments All Boats Rise Regulations Gov’t Social Spending & Attack Unions 9

10 Buy Companies Using Borrowed Money
Step 1: After finance was deregulated around 1980, corporate raiders bought up company after company using borrowed money

11 Make the Target Co. Pay Back the Loan
Step 2: The corporate raiders take some of the loan as fees and special dividends They give some to the CEOs and bankers Then they make the company pay it all back

12 Pay CEOs with Stock Incentives
Step 3: Yearly average in 2012 dollars

13 How the Top 500 Executives Are Paid (2013)
Source: Standard & Poor’s ExecuComp database, calculations by Matt Hopkins

14 If you are the CEO and you are paid with stock incentives, what would you do?

15 Use Profits to Buy Back Stock to Raise Its Price and Your Salary!
Step 4: Use Profits to Buy Back Stock to Raise Its Price and Your Salary! Source: Data made available by William Lazonick, The Academic-Industry Research Network

16 Squeeze the Co. to Pay Back the Loans and to Buy Back Stock
Step 5: Squeeze the Co. to Pay Back the Loans and to Buy Back Stock Downsize through layoffs Ship production abroad Sell off product lines and divisions Speed-up production Raid pension funds or discontinue them Cut wages and benefits From “Retain and Reinvest” to “Downsize and Distribute”

17 Four Methods of Financial Strip Mining
Interest payments on massive debt Fees to banks Special dividends to corporate raiders Stock buybacks

18 Outcomes of Financial Strip-mining
Average real wages stagnate Financial and CEO incomes skyrocket Good jobs and benefits decline

19 Discussion Question 4: How does financial strip-mining impact our communities and the public sector?

20 Corporate Debt Explodes, But Debt Is Not Taxable
Source: Federal Reserve Economic Data, FRB of St. Louis, research.stlouisfed.org/fred2; quarterly, end of period.

21 Corporate Taxes as Percent of State and Local Revenues Declines
Source: Bureau of Economic Affairs

22 Off-Shore Tax Shelters Cost Us $150 B
Annual Tax Revenues Lost to Tax Havens Individual and Corporate Income Taxes Combined Rank State Revenue Losses 1 California $7.1 billion 2 New York $4.3 billion 3 New Jersey $2.8 billion 4 Illinois $2.5 billion 5 Pennsylvania $2.1 billion 6 Minnesota $2.0 billion 7 Massachusetts $1.7 billion 8 North Carolina $1.0 billion 9 Florida $ .98 billion 10 Maryland $ .97 billion $150 billion per year lost in off-shore tax shelters, aided and abetted by Wall Street

23 Rich Pay Taxes at a Lower Rate
Top 1% of taxpayers Next 4% Next 15% Fourth 20% Middle 20% Second 20% Lowest 20% Source: Institute on Taxation and Economic Policy, whopays.org

24 Percent of NYC Kindergarten Classes with 25 or More Students

25 Where U.S. Education Ranks Among Developed Nations
Educational Mobility: Getting to college if your parents did not go to college – ranked 25th out of 28 OECD countries. Hours Teaching per year: Ranked 36th highest out of 38 countries. Support for 5 to 14 year olds: Ranked 29th out of 39 Countries

26 Corporate and Financial Elites Pour Money Into Politics
Corporations / Finance Single Issues Labor Source: Center for Responsive Politics

27 Wall Street Revolving Door Makes TPP Work for Financial Elites
Michael Froman leads charge in Clinton Administration to repeal Glass-Steagall Leaves for Citigroup Citigroup presses for trade provisions making it harder to regulate Wall Street Leaves Citigroup with $4.5 million bonus to Obama Administration to be chief trade negotiator TPP contains provisions advocated by Citigroup making it harder to regulate Wall Street

28 Runaway Inequality Promotes a New Social Philosophy
If you want education, go into debt If you are poor, fend for yourself If you want a job, go find it If you want a poverty program, go to jail

29 What’s Runaway Inequality’s Solution to Higher Education
What’s Runaway Inequality’s Solution to Higher Education? Runaway Student Loans

30 What’s Runaway Inequality’s Solution to Youth Unemployment?
Young High School Grads (17-20)

31 We Have the Most Prisoners in the World
Source: Bureau of Justice Statistics

32 Financialization and Prisons
Financial vs. Non-Financial Compensation State and Federal Prisoners Source: Bureau of Justice Statistics

33 Prison Population Rises, Violent Crime Doesn’t
Sources: Bureau of Justice Statistics;

34 Why Black Communities Are Concerned About Arrests and Incarceration
Source: Data from National Corrections Reporting Program, Bureau of Justice Statistics, cited in Evans, Garthwaite, and Moore, “The White/Black Educational Gap, Stalled Progress, and the Long-Term Consequences of the Emergence of Crack Cocaine Markets”

35 Runaway Inequality Punishes Black & Poor Communities to Raise Revenue
Michael Brown Source: City of Ferguson, MO, “Comprehensive Annual Financial Report for the Year Ended June 30, 2013,”

36 Who Is Most Eager to Find Work?
Eric Garner

37 What do we do about Wall Street and runaway inequality?

38 How Do We Build It?

39 An example of a powerful national anti-Wall Street movement: The Populists 1880-96

40 Populists’ Agenda Consumer and producer co-operatives Public banks
Public ownership of railroads, telegraph and telephone industries Progressive income tax

41 What’s our agenda?

42 Our Agenda Financial speculation tax, pay for free higher education
Public banks $15 minimum wage indexed to inflation End “Carried Interest” loophole

43 Top Salaries at Bank of North Dakota
President & CEO Eric Hardmeyer $261,237 Chief Lending Officer Bob Humann $150,403 Chief Admin. Officer Tim Porter $139,205 Chief Admin. Officer Lori Leingang $115,763 Chief Business Officer Joe Herslip $110,250 Director of Student Loans Wallace Erhardt $105,943

44 Populist Organizing Strategy
Educate and organize Organize and educate Army of 6,000 educators

45 Runaway inequality will not cure itself
Key Fact #1: Runaway inequality will not cure itself

46 It will take a massive popular movement to counter runaway inequality
Key Fact #2: It will take a massive popular movement to counter runaway inequality

47 What do we need to do? Common Agenda, Common Analysis
Educational infrastructure New national movement organization New activist identity – silo busters -- movement builders 47

48 We need our army of educators
Are You Interested?


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