The widening gap in income inequality has become a growing issue since the turn of the century. One of the main causes that contributes to the disparity is that worker pay has stagnated while chief corporate executives (CEO) incomes have skyrocketed. In the United States, compensation for CEOs soared 937% between 1978 and 2013. Today, a CEO makes 300 times that of the average company worker. CEOs at the top 350 firms earned an average of $15.2 million while the average worker’s earned about $52,000.
The income gap may vary between industries and companies. The average CEO compensation at Starbucks, McDonald’s and other major fast-food companies was $23.8 million in 2013, more than 1,000 times what the average worker made, according to Demos, a New York public policy group and according a study by the University of California and the University of Illinois, more than half of fast-food workers’ families nationwide rely on public assistance.
In 2012, Monsanto was sued by migrant workers over wages under minimum wage. A Monsanto recruiter promised them a wage of $80 per acre, but the actual pay turned out to be below the federal minimum wage of $7.25 per hour. Although Monsanto provided free motel housing when the workers arrived, the workers ended up in a former nursing home, many of whom were required pay $300 rent monthly and were not provided enough beds for their children. Monsanto’s net sales totaled $15.9 billion last year and CEO Hugh Grant raked in $10.8 million in compensation.
One of the companies that has been highly criticized for their low employee pay and benefits is Walmart. In 2014, Walmart CEO Doug McMillion received $25.6 million in compensation. In an article by Fortune, a Walmart worker making the minimum wage of $9 an hour would have to work 2.8 million hours to equal McMillion’s earnings. A big concern is that companies keep wages low so they can minimize employee benefits and the workers in turn depend on government assistance. In 2013, 7000 Walmart employees received food stamps. This article titled Americans are spending $153 billion a year to subsidize McDonald’s and Wal-Mart’s low wage workers, written by Ken Jacobs of the Washington Post garnered national attention. Although the $9 minimum wage is $1.75 higher than the federally mandated minimum wage, it is not enough. Walmart plans to increase the minimum wage again to $10 next year. Reports stated the raise will cost the company $1 billion. But for a company with $485 billion in revenue and profits of around $15.5 billion, should they be doing more to ensure their workers are earning a livable wage? Do you believe companies have the responsibility to pay their employees living wages and provide them adequate health benefits?