Despite the frustrated disposition many Americans appear to feel when the topic arises, the wage gap between CEOs and median workers in our economy continues to play a devastating role in separating the highest earners in the country from all the rest of us. Especially concentrated in the banking industry (but also largely seen in health care), wage discrepancies have yet to decline, a factor which may be attributed to its staggering lack of regulation. According to a recent study done by the Economic Policy Institute, CEO compensation has grown by 1,007.5% from 1978 to 2018, while in contrast, wages for the typical worker have only grown by just 11.9%. The allowance of this phenomenon has largely contributed to the rising inequality in America and the disappearance of the middle class, and for little to no merit. CEOs are earning more because of their ability to generally influence their pay, and not because of increased productivity (Mishel & Wolfe 2019). In order to begin closing this gap, not only must stricter policy regulations be instituted, but property enforced, and consequences implemented for companies who fail to meet these perimeters. 

            Due to the severity of the financial crash of 2008, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010). Thanks to this bill, a mandate requiring firms to calculate the median paid employees’ compensation with that of the CEOs came into effect in 2018. While this mandate helps in visualizing the wage gap, it falls short entirely of enforcing actions which would offset the current rising inequality trend. Banks and other corporations have fought back intensely to repeal the disclosure role, thus why the execution of strict consequences for firms who fail are dire. Congress itself has been lax in its enforcement of most of the Dodd-Frank regulation, too. In 2017, the U.S House of Representatives passed the Financial CHOICE Act, which aided in repealing most of Dodd-Frank, while the following year House Republican leaders began building on this momentum of deregulation (Anderson & Wakamo 2018). 

            Regulation of income inequality has always seemed to be a triggering topic and appeared hard to accomplish, no thanks to many members of Congress, lobbyists, and the high-income earning CEOs of America. However, when it comes to creating social change on wage disparity, action on many levels need to be taken. From a grassroots standpoint, citizens must begin expressing their frustration to their respective Congresspeople. As for those in positions of authority to implement these changes, it is their job to listen and do. Because studies have shown that leading corporations tend to not institute any serious solutions to the wage gap, the burden of responsibility becomes placed on the legislative, judicial, and executive branches, as well as organizations such as the SEC, who have taken flack in the past for not extensively enforcing their own regulations. Pushes towards high levels of salary transparency and capping of CEO-worker pay ratios ensures a strong commitment to playing competitive and fair wages. (Gomez-Bezarres, W. Przychoden, & J. Przychodzen, 2019). 

            Failure to act on the growing inequality will only ensure that the divergence grows wider and the issue becomes even harder to remedy. While the wealthy in this country continue to get wealthier, the rest remain stagnant. If not now, when? 

References

Anderson, Sarah, and Brian Wakamo. “CEO-Worker Pay Ratios in the Banking Industry.” Institute for Policy Studies, Public Citizen, Apr. 2018, https://ips-dc.org/wp-content/uploads/2018/04/Bank-Pay-Ratios.pdf.

Gomez-Bezares, Fernado, et al. “Corporate Sustainability and CEO-Employee Pay Gap- Buster or Booster?” Sustainability, vol. 11, no. 21, 20 Oct. 2019. MDPI Open Access Journals, https://www.mdpi.com/2071-1050/11/21/6023/htm#.

Mishel, Lawrence, and Julia Wolfe. CEO Compensation Has Grown 940% Since 1978. Economic Policy Institute, 14 Aug. 2019, https://www.epi.org/files/pdf/171191.pdf.

This is an example post, originally published as part of Blogging University. Enroll in one of our ten programs, and start your blog right.

You’re going to publish a post today. Don’t worry about how your blog looks. Don’t worry if you haven’t given it a name yet, or you’re feeling overwhelmed. Just click the “New Post” button, and tell us why you’re here.

Why do this?

• Because it gives new readers context. What are you about? Why should they read your blog?
• Because it will help you focus you own ideas about your blog and what you’d like to do with it.

The post can be short or long, a personal intro to your life or a bloggy mission statement, a manifesto for the future or a simple outline of your the types of things you hope to publish.

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• If you blog successfully throughout the next year, what would you hope to have accomplished?

You’re not locked into any of this; one of the wonderful things about blogs is how they constantly evolve as we learn, grow, and interact with one another — but it’s good to know where and why you started, and articulating your goals may just give you a few other post ideas.

Can’t think how to get started? Just write the first thing that pops into your head. Anne Lamott, author of a book on writing we love, says that you need to give yourself permission to write a “crappy first draft”. Anne makes a great point — just start writing, and worry about editing it later.

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