Executives collect more as worker wages stagnate
In 1965, chief executives of America's largest public companies were paid, on average, 20 times more than their workers. Today, chief executives are paid 300 times more than workers, according to the Economic Policy Institute.
Since the 1970s, a clear trend has shown the wealthiest claiming an ever-greater share of economic growth. It has accelerated in the last two decades.
“Nationally, the wealthiest 1 percent of earners captured 91 percent of all economic growth in the first three years (2007-09) of the recovery following the Great Recession,” reported Policy Matters Ohio, the state's leading progressive think tank. “This is out of sync with decades of history in which growth meant better living standards for everyone.”
The Policy Matters study adds to a pile of research illustrating the widening gulf between economic elites and everyone else, and the persistence of poverty amid a booming stock market. Corporate and public policies have allowed widening disparity even while worker productivity has risen.
“In Ohio, between 1979 and 2013, productivity rose by 61.5 percent, but [inflation-adjusted] hourly compensation actually fell by 1.1 percent,” Policy Matters reported. “Ohio workers are more productive and more educated than ever before. Yet because of poor policy decisions over the last few decades, the overwhelming share of new wealth created by workers of all levels has been captured at the top.”
This trend has prompted activism nationally and in Ohio to raise federal and state minimum wages.
“The value of the [federal] minimum wage in the U.S. and Ohio peaked in 1968. That year, it was worth $11.39 in 2017 dollars. If the minimum wage had grown in tandem with the state economy, it would be worth more than $20.39 today,” Policy Matters said.
The federal minimum wage, established in 1938 at 25 cents, has remained at $7.25 since 2009. Because the Republican-controlled Congress has shown no interest in raising it, most political activism now occurs at state and local levels.
In 2006, when Ohio's poverty rate exceeded the national average for the first time, Ohioans took a first step. By a 57 percent majority, voters approved an amendment setting a state minimum wage of $6.85, indexed to inflation. The wage now is $8.15. The amendment exempts family-owned and operated businesses and those with less than $250,000 in annual gross receipts.
At an hourly wage of $8.15, a full-time employee must work 74 hours a week to afford a two-bedroom rental at the fair-market rent of $780 per month.
Policy Matters supports a $15 minimum wage, to be phased in by 2025. The organization would set the wage at $12 in 2019, and raise it by 50 cents each year until it reaches $15 in 2025.
“A $15 minimum wage would benefit 1.8 million Ohio workers, 41 percent of working women and 28 percent of working men. More than 700,000 Ohio children have at least one parent who would get a raise,” Policy Matters said.
Getting an amendment on the statewide ballot requires 315,000 signatures. In 2006, more than 765,000 were gathered.