More Than Money
Issue #36
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Money and Work

Table of Contents

“The Wage Gap”

CEOs were rewarded in 2002 for laying off workers in 2001. Median CEO pay at the 50 companies with the most layoffs in 2001 rose 44 percent from 2001 to 2002, while overall CEO pay climbed only 6 percent.

. In addition, median CEO pay was 38 percent higher in 2002 at the top 50 Layoff Leaders than at the 365 large corporations surveyed by Business Week magazine.

. The typical U.S. CEO made $3.7 million in 2002, while the typical Layoff Leader got $5.1 million.

The CEO-Worker wage gap persists. Despite drops in average CEO pay from 2000 to 2002, the CEO-worker pay gap of 281-to-1 in 2002 was nearly seven times as large as the 1982 ratio of 42-to-1.

. If the average annual pay of production workers had risen at the same rate since 1990 as it has for CEOs, their 2002 annual earnings would have been $68,050 instead of $26,267.

. If the federal minimum wage, which stood at $3.80 an hour in 1990, had grown at the same rate as CEO pay, it would have been $14.40 in 2002 instead of $5.15.

. Between 1990 and 2002, average CEO pay rose 279 percent, far more than the 46 percent increase in worker pay, which was just 8 percent above inflation.

Sources: CEO Pay: Business Week annual executive pay surveys. S & P 500 Index: Standard and Poor's Corporation. Figures are yearend close. Corporate Profits: Bureau of Economic Analysis, National Income and Product Accounts. Average Worker Pay: Bureau of Labor Statistics, Average Weekly Hours of Production Workers (Series EEU00500005) and Average Hourly Earnings of Production Workers (Series EEU00500006). Inflation: Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers.

From "Executive Excess 2003: CEOs Profit from Layoffs, Pension Shortfalls, and Tax Dodges," by Sarah Anderson, John Cavanagh, Chris Hartman, and Scott Klinger, August 26, 2003. "Executive Excess 2003" is the tenth annual CEO pay study by the Institute for Policy Studies and United for a Fair Economy. The full text is available at

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