One of the cornerstones of Hillary’s presidential campaign is the concept of “fair pay.” HER definition of fair pay.
Hillary said on April 14 that “The average CEO makes about 300 times what the average worker makes.”
It’s important to understand how Hillary got that figure. She was relying on a study by the Economic Policy Institute (EPI), a left-leaning think tank. An EPI study of 2013 pay found that for the top 350 U.S. firms (in terms of sales), the average CEO pay was $15.2 million, a ratio of 295.9 times higher than the average pay of workers at those companies.
To get that ratio, EPI bought CEO salary figures from Compustat, a division of Standard & Poor’s. The salaries included salary, bonuses, restricted stock grants, options exercised and long-term incentive payouts.
EPI then examined Bureau of Labor Statistics (BLS) data for the hourly wages of production and nonsupervisory “typical” workers in the industries of the 350 companies it studied. EPI determined that, including health care benefits, the median earnings was $55,800.
Then EPI divided the pay of the specific company’s CEO by the annual earning for the typical worker in that company’s industry. The 295.9 ratio is the average of the 350 ratios calculated.
However, here’s where Hillary’s argument begins to break down.
Most CEOs don’t work at large companies like the ones EPI studied. The BLS says there are more than 246,000 CEOs in the US, with a median annual wage of $173,320. The median pay for ALL workers was, according to the BLS, was, in 2014, $41,132. So the CEOs earned 4.21 times what workers earned. ($173320/$41132)
From The Wall Street Journal comes another pay picture, a very different CEO pay picture than the one Hillary paints:
For 2012, the Bureau of Labor Statistics estimated that there were 255,940 non-self-employed CEOs in the U.S. For the same year, the BLS likewise estimated that the mean annual salary of these CEOs was $176,840. When compared with the July 2012 seasonally adjusted average annual pay of $34,645 for production and nonsupervisory employees on private nonfarm payrolls in the U. S., as also estimated by the BLS, the ratio of the average CEO pay to the pay of an average employee as calculated by the AFL-CIO shrinks from 354 to 1 to just over 5 to 1.
But the most striking action is this. Hillary recently demanded and got $300,000 from UCLA for speaking for 30 minutes. That’s an annual salary of $1,248,000,000, or 22,365.6 times the annual earning of EPI’s “typical” employee. Or, as Victor Davis Hanson put it:
At UCLA recently, Clinton’s fee worked out to about $165 per second. In three minutes of autobiographical chitchat, Clinton pulled in more than the average full-time fast-food worker makes in a year.
And let’s not forget that while senator she paid women staffers only 72% of what she paid men staffers.
Fair Pay?!? Yeah, right. Only in HillaryWorld.
Cross-posted at Well Said, my personal very conservative web site