Income Inequality

By Gary Silverman, CFP®

Income inequality was a big topic (at least for the Democrats) in the recent election. This actually is a problem and one that is hard to eliminate since zero is always the low end of the spectrum, and inflation by itself will stretch out the high end. Plus, given the American Dream many of us think we might be the big earners some day and don't want to limit executive pay in case we get to partake in the future.

But when we start looking at executive management pay, things can get a bit crazy.

Back in 1965, according to GlassDoor.com, the average CEO of a publicly traded company made about 20x what their average employee made. Since then the average CEO's pay rose close to 1000% while the average worker's pay went up about 11%. This means that compensation to the higher-paid CEOs is now well over 1000x what their average employees make.

I don't know, that just seems a bit nuts to me.

(Full-disclosure: I made a little more than 3x what my average employee made last year.)

This article from Bloomberg will give you more perspective on this.