Cross-posted from Smirking Chimp
A recent AP "big story" tries to explain why CEO pay is soaring and everyone else's is stagnant or falling. It says more than it intends about the state of our economy and our governing system.
AP's "The CEO Got A Huge Raise. You Didn't. Here's Why," by Josh Boak boils down to this:
"[P]ay for the typical CEO ... surged 8.8 percent last year to $10.5 million, it rose a scant 1.3 percent for [the rest of us].
"Here are five reasons why CEOs are enjoying lavish pay increases and five reasons many people are stuck with stagnant incomes.
"WHY CEOs ARE GETTING HUGE RAISES
1. They're paid heavily in stock.
2. Peer pressure. Corporate boards often set CEO pay based on what the leaders of other companies make.
3. The superstar effect.
4. Friendly boards of directors.
5. Stricter scrutiny. ... companies often raise pay to compensate for the risk of job loss."
"WHY MANY OF US AREN'T GETTING A RAISE
1. Blame the robots. Millions of factory workers have lost their spots on assembly lines to machines. Offices need fewer secretaries and bookkeepers in the digital era.
2. High unemployment. ... Businesses face less pressure to give meaningful raises when a ready supply of job seekers is available.
3. Globalization. Companies can cap wages by offshoring jobs to poorer countries.
4. Weaker unions.
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