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America’s Rich Dominate the Ranks of Our World’s Wealthiest. Why?

Amazon, for instance, last year generously “shared” the wealth well beyond the chief executive level. Amazon CEO Andrew Jassy ended the year up $212.7 million. But Amazon’s web services chief, Adam Selipsy, had no reason to complain either. His compens…

Amazon, for instance, last year generously “shared” the wealth well beyond the chief executive level. Amazon CEO Andrew Jassy ended the year up $212.7 million. But Amazon’s web services chief, Adam Selipsy, had no reason to complain either. His compensation for the year: $81.4 million. David Clark, Amazon’s worldwide consumer chief, enjoyed a lucrative year as well. His pay totaled $56 million.

Amazon’s most typical warehouse workers, meanwhile, took home $31,705 last year.

The pay gap between U.S. corporate execs and workers gives no sign of shrinking anytime soon. And that shouldn’t surprise us. Corporate execs sit on each other’s boards of directors. These execs have little incentive to rein in CEO pay in hard economic times — and every incentive to insist that only continued high executive pay can keep in place the “quality leadership” that hard times so dramatically demand.

Just how much does all our current corporate executive compensation contribute to the wealth of America’s wealthiest? Quite a bit. Between 1978 and 2020, the latest year with comparable stats available, the overall inflation-adjusted annual earnings of our nation’s top 0.1 percent jumped 385 percent. CEO compensation during those same years, EPI notes, “grew nearly four times as fast!”

The bottom line: America’s distribution of income and wealth will remain ridiculously top-heavy until we start limiting the “rewards” continuing to rush and gush into our corporate executive suites.

That limit could come in any one of several different forms. Let’s start with taxes. In the two decades after World War II, individual income over $200,000 faced a federal income tax rate that annually hovered around 90 percent. That tax pressure served to deflate executive compensation. Why bother scheming for outrageously high executive pay, after all, when Uncle Sam stood ready to tax away most of any windfall?

Another approach to corporate pay reform — limiting the gap between executive and worker compensation — has been steadily gaining momentum over the past decade. San Francisco and Oregon’s Portland now levy higher tax rates on executive pay that runs over 100 times worker pay. At the state level, legislative proposals along the same line are gaining ground.

Nationally, as Inequality.org details, progressive lawmakers are working to link federal government contracting and subsidies to CEO-worker pay differentials. Their goal: denying federal dollars to corporations with wide pay gaps between execs and workers.

Corporate America’s continuing failure to limit those gaps plays out dramatically in the latest Credit Suisse Research Institute annual comparative stats on national mean and median individual wealth. One example: The United States last year averaged just over $579,000 in wealth per adult, almost double France’s $322,000 average. But the most typical — the median — French adult held a net worth of just under $140,000, almost $50,000 more than the wealth of the most typical U.S. adult.

Average Danes, Canadians, and Dutch adults — to give just a few more examples — last year all held less wealth than average Americans. But the wealth of the most typical adults in Denmark, Canada, and the Netherlands all towered over the wealth of the most typical U.S. adults by at least 53 percent.

Grand concentrations of wealth, in other words, skew the stats. Average personal wealth figures in top-heavy societies can look rather robust. But the typical person in these societies cannot claim anything close to those averages.

So where does that leave us? In the United States, our grand enterprises have essentially become the world’s fiercest engines of inequality. We need to change that.


This content originally appeared on CounterPunch.org and was authored by Sam Pizzigati.


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