For more than 125 years, the United States has recognized the first Monday in September as Labor Day. According to the U.S. Department of Labor, Labor Day is “an annual celebration of the social and economic achievements of American workers.” From recent coverage, you’d be excused for thinking that 2022 is an unmixed blessing for American workers, in an economy with “Workers Calling the Shots” (Forbes, 12/15/21). Unionization is on the rise, with successful efforts at Amazon and Starbucks, among other corporate behemoths. Nationally, unemployment rates have been below 4% since 2021.
This shifting balance seems to promise greater economic clout and improved worker conditions. But we need to continue to pay attention to metrics that reflect an entrenched devaluation of our workforce and related spiraling inequality in the United States. One such measurement is the disparity between median or average compensation and what CEOs in the same company earn. Andrew Mosteller notes on business.org that while many average folks lost their jobs during the pandemic, CEOs stayed on and many received raises: a 2022 study by Just Capital found that average CEO pay increased 31% in the last three years while median worker pay increased only 11%. Just Capital pegs the ratio of CEO to worker pay at 235:1; examining SEC data and crowdsourced salary information, Mosteller found that the average CEO earns 400 times more than an average employee does—a shocking $21.45 million dollars a year vs. $51,394. In other words, typical employees at Coca-Cola have to work more than an entire day to bring home as much money as their CEO is paid for one minute of his time. Disaggregating these data by gender and race/ethnicity would demonstrate the even more extreme gap for many workers.
The first step to changing any systemic issue, like corporate pay structures, is to increase awareness. Public companies are subject to public pressure, whether from shareholders or consumers, and the tight employment environment is at least causing corporate minimum salaries to be raised. But as you prepare for your Labor Day picnic, you might also consider spending more of your hard-earned dollars with local producers and small businesses—check out the City of San Antonio’s Buy Local SA campaign for more resources. This year, let’s honor U.S. workers by investing in a more equitable economy.