As the Economy Grows, Workers Still on the Short End
U.S. economic growth is strong but real wages are falling, unemployment is still high and poverty is rising. The most recent data for profits, assets, income and wages indicate that all the gains of the recovery have been captured by the wealthiest sectors.
Pay increases. CEO cash compensation - base salary plus annual bonus - rose 7.2 percent in 2003, according to Mercer Consulting, while 80 percent of all private sector workers saw their real hourly earnings fall.
Average pay. Median total direct compensation for U.S. CEOs - salary, bonus, and long-term incentives such as stock options - was $6.2 million in 2003, or about $120,000 a week, according to Mercer. This is 232 times the average weekly earnings for a U.S. production worker.
Highest paid. Total compensation in 2003 for the five highest-paid corporate executives in the United States reached $262 million dollars. Sandy Weill of Citigroup ($63 million), Larry Culp of Danaher ($53 million), Chuck Cawley of MBNA ($52 million), John Chambers of Cisco ($48 million), and Warren Spector of Bear Sterns ($46 million) made more than enough to fund the entire new community college initiative proposed by Bush to retrain American workers for jobs in high-growth industries ($250 million).
Corporate profits. The total profits reported by U.S. corporations for 2003 ($1 trillion) are closing in on the GDP for China ($1.2 trillion for 2003). Corporate profits are now the highest ever recorded in U.S. history.
Corporate cash. General Motors is currently sitting on enough cash ($55 billion) to fund the federal government's health care budget for 2004 ($52 billion).
Microsoft has enough cash ($53 billion) to cover all of this year's federal spending on income protection for the unemployed ($49 billion). Pfizer has enough cash ($12 billion) to cover the entire 2004 budget for the Department of Labor ($11.7 billion).
The richest. The two richest men in America - Bill Gates of Microsoft and Warren Buffet of Berkshire Hathaway - have a combined net worth of $82 billion, approximately the entire 2003 GDP of the Czech Republic ($84 billion). The five members of the Walton family of Wal-Mart fame could cash in their assets ($102.5 billion) and purchase the entire 2003 output of Egypt's 65 million citizens ($98.5 billion).
The richer. The ten wealthiest Americans have a net worth of $238 billion. They could personally foot the bill for more than half of all discretionary nondefense spending by the federal government this year ($416 billion).
The rich. The net worth of the 2003 Forbes 400 - the wealthiest 400 Americans - rose 10 percent from 2002, to $955 billion, more than the entire discretionary budget of the U.S. government.
Culture CEOs. Oprah Winfrey earned $180 million last year, more than the 2004 federal budget for enforcing wage/hour laws ($160 million) or OSHA laws ($166 million). Tiger Woods earned $78 million, enough to personally raise 3,248 families from poverty-level living ($18,392 for a family of four) to the U.S. median household income ($42,409).
Income inequality. The long-term trend in the United States has been toward increasing income inequality, according to the U.S. Census Bureau. Over the past thirty years, the share of income controlled by the top 5 percent of households has increased from 16 percent to 22 percent.
Asset inequality. The top 1 percent of all U.S. families owns about 30 percent of the nation's assets; the bottom 50 percent of families owns 5 percent.
Gini index. The Gini index, a measure of income concentration, records income equality on a scale of 0 to 100. A measure of 100 indicates complete inequality - one person has all the income and the rest have none. A measure of 0 indicates complete equality - all people have equal shares of income. The Gini index for the United States is 40.8, the highest of any advanced industrial nation. All European and most Asian nations - including Japan and South Korea - have far greater income equality than the U.S. Canada scores 31.4 on the Gini index. Most of the nations with similar or greater income inequality than the United States are located in Latin America or Africa.
The U.S. economy has recovered from the 2001 recession, but the distribution of the income generated has skewed the results away from working Americans. With profits and wealth accumulation still rising in the corporate sector but real wages and income transfers declining, the results for 2004 will be even more damaging.
© 2004 Labor Research Association
****************************************************************
Thought this wasan interesting article.
U.S. economic growth is strong but real wages are falling, unemployment is still high and poverty is rising. The most recent data for profits, assets, income and wages indicate that all the gains of the recovery have been captured by the wealthiest sectors.
Pay increases. CEO cash compensation - base salary plus annual bonus - rose 7.2 percent in 2003, according to Mercer Consulting, while 80 percent of all private sector workers saw their real hourly earnings fall.
Average pay. Median total direct compensation for U.S. CEOs - salary, bonus, and long-term incentives such as stock options - was $6.2 million in 2003, or about $120,000 a week, according to Mercer. This is 232 times the average weekly earnings for a U.S. production worker.
Highest paid. Total compensation in 2003 for the five highest-paid corporate executives in the United States reached $262 million dollars. Sandy Weill of Citigroup ($63 million), Larry Culp of Danaher ($53 million), Chuck Cawley of MBNA ($52 million), John Chambers of Cisco ($48 million), and Warren Spector of Bear Sterns ($46 million) made more than enough to fund the entire new community college initiative proposed by Bush to retrain American workers for jobs in high-growth industries ($250 million).
Corporate profits. The total profits reported by U.S. corporations for 2003 ($1 trillion) are closing in on the GDP for China ($1.2 trillion for 2003). Corporate profits are now the highest ever recorded in U.S. history.
Corporate cash. General Motors is currently sitting on enough cash ($55 billion) to fund the federal government's health care budget for 2004 ($52 billion).
Microsoft has enough cash ($53 billion) to cover all of this year's federal spending on income protection for the unemployed ($49 billion). Pfizer has enough cash ($12 billion) to cover the entire 2004 budget for the Department of Labor ($11.7 billion).
The richest. The two richest men in America - Bill Gates of Microsoft and Warren Buffet of Berkshire Hathaway - have a combined net worth of $82 billion, approximately the entire 2003 GDP of the Czech Republic ($84 billion). The five members of the Walton family of Wal-Mart fame could cash in their assets ($102.5 billion) and purchase the entire 2003 output of Egypt's 65 million citizens ($98.5 billion).
The richer. The ten wealthiest Americans have a net worth of $238 billion. They could personally foot the bill for more than half of all discretionary nondefense spending by the federal government this year ($416 billion).
The rich. The net worth of the 2003 Forbes 400 - the wealthiest 400 Americans - rose 10 percent from 2002, to $955 billion, more than the entire discretionary budget of the U.S. government.
Culture CEOs. Oprah Winfrey earned $180 million last year, more than the 2004 federal budget for enforcing wage/hour laws ($160 million) or OSHA laws ($166 million). Tiger Woods earned $78 million, enough to personally raise 3,248 families from poverty-level living ($18,392 for a family of four) to the U.S. median household income ($42,409).
Income inequality. The long-term trend in the United States has been toward increasing income inequality, according to the U.S. Census Bureau. Over the past thirty years, the share of income controlled by the top 5 percent of households has increased from 16 percent to 22 percent.
Asset inequality. The top 1 percent of all U.S. families owns about 30 percent of the nation's assets; the bottom 50 percent of families owns 5 percent.
Gini index. The Gini index, a measure of income concentration, records income equality on a scale of 0 to 100. A measure of 100 indicates complete inequality - one person has all the income and the rest have none. A measure of 0 indicates complete equality - all people have equal shares of income. The Gini index for the United States is 40.8, the highest of any advanced industrial nation. All European and most Asian nations - including Japan and South Korea - have far greater income equality than the U.S. Canada scores 31.4 on the Gini index. Most of the nations with similar or greater income inequality than the United States are located in Latin America or Africa.
The U.S. economy has recovered from the 2001 recession, but the distribution of the income generated has skewed the results away from working Americans. With profits and wealth accumulation still rising in the corporate sector but real wages and income transfers declining, the results for 2004 will be even more damaging.
© 2004 Labor Research Association
****************************************************************
Thought this wasan interesting article.
