Why the U.S. is becomingly noncompetitive...CEO pay ratio versus the average worker
The trade deficit between the U.S. and the rest of the civilized world continues to grow. While there is no simple answer as to why, there are many factors that need to be considered. Of course the obvious ones are the devalued U.S. dollar compared to most other industrial countries' currency, rising labor costs, and higher corporate taxes. But there is a new study which highlights another previously unaddressed aspect.
The ratio of CEO pay versus the average worker of the company has surfaced. CEOs of Fortune 500 companies make an average of 475 times that of their corporate median wage. This startling figure has come to light as a result of the "Occupy Wall Street" movement. This ratio is put into staggering perspective when compared to nine other industrial nations.
While the actual ratios have been debated the big picture comes into focus very quickly. The millions of dollars that are paid to CEOs, and the top executives of corporate
America, have to come from somewhere. In most cases this cost is recouped from the sale of the goods or services provided. So just as a pro sport team recaptures the cost of its highly compensated franchise players by charging $8 for a hot dog, the American manufacturer needs to do the same thing to cover their payroll. So is the American consumer willing to pay more for products made in the United States? It does not appear so.