#worker pay

In 2023, the median salary (not even just starting) for a college graduate aged 25-34 was $59,600. [2]

Now that sounds good, right? More than double? Well, let's take a closer look.

According to the Bureau of Labor Statistics Inflation Calculator [3], $22,449 in 1982 had the same purchasing power as $71,617.79 in 2023. In other words, that "more than double" in nominal terms is actually almost a 17% DECREASE in real value.

If anyone is wondering what those dang Millennials and GenZ kids are complaining about, this is it.

a few public companies have begun disclosing a ratio, required for the first time this year, that compares the pay of their chief executive to the pay of their median employee. 

At industrial giant Honeywell, the largest company yet to disclose, the ratio was 333 to 1. 

At Teva Pharmaceuticals, the Israel-based generic pharmaceutical company, it's 302 to 1.

And at the regional bank Umpqua Holdings, it's about 55 to 1.

As of Wednesday morning, companies had disclosed the figure for only about 20 CEOs, according to the research firm Proxy Insights. But with Corporate America's annual meeting season getting under way - the majority of public companies release their annual reports and proxy voting documents in the coming months - investors, the public and employees are about to get a much closer look at how their pay compares not only to that of their CEO, but that of their peers.

The regulation mandates that companies identify the compensation of the median-paid employee at the firm, compare that to the CEO as a ratio, and disclose it each year. As part of the Dodd-Frank legislation of 2010 created in the aftermath of the financial crisis, the rule was finalized in 2015 but met resistance along the way from business groups that said it would be onerous and expensive to calculate. 

Compounding that concern is timing. The ratios are being disclosed just after corporations have received a massive windfall in the form of a corporate tax cut, which could add to questions about inequality. "There may very well be heightened expectations from employees who are paid in the bottom half that incremental tax cut dollars are going to be used to enhance company-wide pay programs," Wise said. "That would be a very understandable reaction given the timing of everything."

The SEC's regulation permits companies to exclude from the calculation certain non-U.S. employees, representing up to five percent of its total employee base, acknowledging the cost of collecting the data. In its filing, Honeywell said it had excluded workers from 27 countries, such as Brazil, Indonesia and Slovakia, from its figure, slightly less than five percent of its workforce. (A Honeywell spokesperson said the exclusions were in line with SEC rules)

Sarah Anderson, the global economy project director for the left-leaning think tank Institute for Policy Studies, questioned whether companies were doing that to "manipulate the median worker number," making it appear smaller since such countries presumably have lower wages than markets in Western Europe or Japan.

Whether lopsided CEO pay ratios will raise the ire of employees or the public is not yet clear. Despite rising populist sentiments and increasing focus on income inequality, high CEO pay does not seem to generate the same outrage it did during the financial crisis, and only time will tell if juxtaposing the two numbers will have the effect of shaming outlier companies into lower pay for CEOs - or higher pay for workers.