Monday, June 29, 2020


The murder of George Floyd and associated civil unrest has sparked a national conversation around inequality. While the intersection of police brutality and race is the main driver of current frustrations, economic equality is another piece of the puzzle. And labor unions with their funded echo chamber allies on the left encourage class warfare with misleading information to advance their agenda.

In 2019, a Vox headline read, “CEOs made 287 times more money last year than their workers did.” CNBC trumpeted, “CEOs see pay grow 1,000% in the last 40 years, now make 278 times the average worker.” The Guardian reported, “Top US bosses earn 278 times more than their employees.” What groups planted these headlines? The AFL-CIO and its pals at the Economic Policy Institute — an organization funded by labor unions. 

Despite the media parroting, a high school statistics student could easily pick out the apples versus carrots comparison. Inside the statistical sleight of hand, you’ll find the earnings gap between chief executives and employees stretches to be a story. The comparisons contrast America’s top CEOs — either using leaders of S&P 500 companies or the country’s most successful 350 firms — and the average worker. An intellectually honest analysis would compare either all CEOs with all workers, or the highest paid CEOs with the highest paid workers. 

According to the Bureau of Labor Statistics, there are nearly 200,000 CEOs in the U.S and their average earnings equate to $96 per hour. Compared to the average hourly wage of all workers, CEOs make between three and four times as much. The median CEO pay is $91 per hour, while median weekly pay of all employees is $367—a ratio of 10 to 1. Similar ratios materialize when comparing top CEOs with the group of highest ranked workers. That’s a far cry from a ratio of nearly 300 to 1. It’s also reported that CEOs work, on average, 63 hours per week — 40 percent more than the average American employee. 

Labor unions should be careful about throwing stones from glass houses. In 2019, the leader of the AFL-CIO — the very group which released one of the reports highlighted above — made just under $300,000. And that came mostly from mandatory dues earned by union members. The Teamsters’ president raked in more than $400,000 from dues often required of members as a condition of keeping their job. While these labor big wigs are having pay morality issues, the concern appears to stop at their own paychecks or well-documented bloated expense accounts. 

The breathless headlines on pay are designed to feed support for policies that take wealth distribution to the extreme. As of late, Sen. Bernie Sanders, Vermont Democrat, and Rep. Alexandria Ocasio-Cortez, New York Democrat, are the movement’s drivers.

Both AOC and Mr. Sanders have been vocal advocates for more than doubling the federal minimum wage to $15 an hour — a policy the nonpartisan Congressional Budget Office says could cost the U.S. economy up to 3.7 million jobs, which are typically filled by younger workers, or those with few skills. In the post-pandemic era, the consequences would likely be much worse with businesses struggling to survive. When referring to the jobs and income of tipped restaurant workers, AOC has called employment law “indentured servitude.” Her earnings record as a bartender in New York City suggests something a lot more rewarding.

Expect future comparisons of pay inequality to be used to promote tax increases for funding a wish list of government initiatives — including free college, Medicare for All and the $33 trillion Green New Deal. AOC wants to institute a 70 percent tax rate for the top bracket, while Mr. Sanders has supported a death tax that would collect between 45 percent to 77 percent of asset worth if the value surpasses $3.5 million.

The top 1% of earners are presently responsible for nearly 40% of tax revenue. The top 5% of earners pay 60% of the bill. Jacking up the rates is what the left calls a “fair share.”

The current debate over inequality is beneficial to have, but Americans should be given all the facts without the misdirection and manufactured hysteria. America’s business leaders have helped to fuel the highest standard of living for more people than any other economy on the planet. The criticism of those leaders’ lifestyles, as well as those of sports and entertainment figures, is apparently driven more by envy than any principle you can learn in an Econ 101 classroom. 

• Richard Berman is the president of Berman and Co., a public relations firm in Washington, D.C.

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