Research indicates that CEO pay has significantly increased in the US since the 1970s

For the past several decades in the United States, wages for average American workers have stagnated. However, while the wages for average workers have flatlined; compensation for American executives have significantly increased over the past several decades. 

Currently, the federal minimum wage in the United States is $7.25 per hour. At $14 per hour, the state of California has the highest minimum wage of any state in the U.S. In California, the $14/hr. rate pertains to only large employers. At $15/hr. only Washington, D.C. has a higher minimum wage than California. 

According to U.S. News & World Report, in 2021, 25 states will see a minimum wage increase. According to research from the Economic Policy Institute, the rapid rise in CEO wages in the United States has caused increased economic inequality. The significant increase in CEO salaries started in the 1970s. In the 1960s and 1970s the ratio of CEO pay compared to that of a typical worker was 20- or 30-to-1. In recent years, that disparity has increased to 200 or 300-to-1. The average CEO leading a Fortune 500 firm makes nearly $20 million per year. 

According to Statista.com, the United States had the highest pay disparity between CEOs and frontline workers of any country in the world. In 2018, the average CEO in the U.S earned $14.25 million annually. The CEO to average worker pay ratio in the United States was 265:1. In terms of the pay gap between CEOs and average workers, the U.S. was followed by: India, the United Kingdom, South Africa, and the Netherlands, as the countries with the highest pay disparities between CEOs and average workers. 

The compensation of American CEOs has raised ethical questions. Should corporate governance boards be tasked with setting maximum wage limits on Chief Executive pay? Is it ethical or justifiable for CEOs to earn drastically more than frontline company employees? Will the stark disparity between CEO salaries and average workers cause serious economic, political, or social consequences in the future? Should state or federal government agencies be involved in setting salary controls for executive pay scales? 
 
Sources:

https://www.epi.org/publication/reining-in-ceo-compensation-and-curbing-the-rise-of-inequality/ 

https://work.chron.com/ceo-compensation-vs-world-15509.html 

https://www.statista.com/statistics/424159/pay-gap-between-ceos-and-average-workers-in-world-by-country/ 
 
https://www.bbc.com/worklife/article/20190108-how-long-it-takes-a-ceo-to-earn-more-than-you-do-in-a-year 

https://www.usnews.com/news/articles/best-states/minimum-wage-by-state

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