He then noted, “Ford explicitly said that if he paid his workers above the norm, and gave them more leisure time, not only would he gain greater commitment and dedication, in a industry marked by quick turnover — but, more importantly, he’d also spark more, better demand for novel relatively expensive durable goods, like cars, amongst a still relatively poor middle class.”
He brought his conversation to the loss of quality jobs based on purchasing purely on price.
The article got me thinking about the disparity in wealth between the CEO and the worker. It seems that we put an inordinate amount of value on the select few at the very top at the expense of the bulk of the people actually doing the work and who could infuse money into the economy if they had it to spend.
- $15,080 – the minimum wage rate in 2009 was $7.25 per hour or $15,080 for the 2080 hours in a typical work year.
- $46,326 – the median household income in America is $46,326 for single wage families and,
- $67,348 for double income families according to My Budget 360.
- $11,400,000 – in 2009 it was reported by Forbes that CEO average salary was down for the second consecutive year to an $11.4 million average (the two year declines were 15% and 11%).
- $588,000,000 – in 2007 hedge and private equity fund managers in the financial sector average the Wonk Room..
So, it would take a person at minimum wage:
- 3 years to earn the single wage annual median household income
- 4.5 years to earn the double income annual median household income
- 756 years to earn the average CEO salary
- 38,992 years to earn the average annual hedge/private equity fund manager salary
I don’t know what the right or appropriate ratio of CEO pay to worker is, but it would seem 169 times the average double income family is a bit much.