Robert Reich: What We Can Do To Cease Out-Of-Management CEO Pay – OpEd

The pay disparity between CEOs and typical staff has change into obscene. However there’s one thing we are able to do about this. (I’ll get to it in a second.)

First, some historical past and numbers: 

In 1965, CEOs sometimes earned 20 instances the standard employee’s pay.

By 1979, the ratio between a CEO’s pay and that of the median employee was 33 to 1. 

As of 2021, the CEO-to-median-worker pay ratio had grown to 399 to 1.  

For the reason that late Seventies, CEO pay elevated greater than 1,200 %. 

On the identical time, the pay of the standard American staff rose 18 %. 

Inevitably, a few of that obscene quantity of CEO pay goes into PACs and marketing campaign contributions. 

In consequence, rich CEOs in impact write many legal guidelines. (And when billionaires bestow presents on Supreme Courtroom justices, in addition they decide how the legal guidelines are enforced and interpreted.)

That is a part of the story of how American capitalism has change into rigged in favor of these on the high. It leads us on to oligarchy — rule by the richest few, placing democracy in danger.

It’s additionally partly why so many People have change into offended and cynical — some even succumbing to the false attract of Trump and neofascism. 

What to do? 

I’m happy to report that Senator Sheldon Whitehouse and Reps. Barbara Lee and Alexandria Ocasio-Cortez have launched the Curbing Govt Overcompensation (CEO) Act. It’s designed to handle the issue of out-of-control CEO pay by levying an excise tax on firms whose CEO-to-median-worker pay disparities are 50 to 1 or higher.

The company tax fee could be a sliding scale — pegged to the diploma to which the ratio of CEO pay (together with wage, bonuses, and inventory choices) to employee pay is larger than 50 to 1.

The tax would apply to large firms with gross revenue of $100 million per 12 months or extra and payrolls totaling $10 million or extra. 

This laws deserves huge assist. Lawmakers must know the way well-liked it’s. Joe Biden ought to get behind it. 

How will you assist? Alert your representatives that you really want them to assist this. 

Click on right here to signal and ship your message to your members of Congress.

This text was revealed by Robert Reich’s Substack