CEO Pay-to-Minimum Wage Ratio Soars

In 2005, an average Chief Executive Officer (CEO) was paid 821 times as much as a minimum wage earner, who earns just $5.15 per hour. An average CEO earns more before lunchtime on the very first day of work in the year than a minimum wage worker earns all year.

The chart shows the ratio of the average annual compensation of CEOs””including all bonuses, incentives, and so on*””to the annual compensation of a full-time, full-year minimum wage earner (assumed to receive an average amount of benefits).

This extreme compensation ratio reflects both the extraordinary growth of CEO pay and also the diminishing value of the federal minimum wage that has not been raised since 1997: adjusting for inflation, the purchasing power of the minimum wage is now at its lowest since 1955.

The ratio wasn’t always so extreme. As recently as 1978, CEOs were paid only 78 times as much as minimum wage earners.

Source: Economic Policy Institute

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