May 1 is International Workers’ Day when the historic struggles and gains made by workers are celebrated around the world. In New Jersey, we acknowledge the work of dedicated organizers and advocates who led the way to a higher minimum wage, a more robust paid family and medical leave program, an emergency fund for workers excluded from federal stimulus relief, and so much more. These important victories helped make New Jersey more affordable for working people and their families in every corner of the state.
As we look to further build worker power — and an economy that works for everyone — we cannot ignore the widening disparity between the most well-off and everyone else. That means examining the growing earning power, and plain old power, of highly profitable corporations and the executives running them.
Far too often, corporate CEOs exert their influence to hoard pay that could have gone to the very people whose labor made the company’s success possible. This shortsighted practice further drives income inequality.
In 2020, New Jersey was home to 12 of the top 350 publicly traded companies. For these companies, CEO pay far outpaced the pay of the average worker. For example, the Quest Diagnostics CEO made 485 times as much as the typical worker in Quest’s industry. Nationally, trends are similar: CEOs were paid on average 351 times the typical worker in 2020.
The large disparity between CEO pay and the average worker is relatively new. In 1965, CEOs of major U.S. companies only earned 21 times more than the average worker. This ratio spiked in the 1990s, hitting a peak in 2000 during a red-hot stock market. Though the current CEO-to-worker compensation ratio remains slightly below the peak seen two decades ago, it is far higher than it was throughout the latter half of the 20th century.
This wage gap will likely continue to widen as U.S. corporations reap record-breaking profits during the pandemic and recession, even with rising costs of inflation. All the while, many workers continue to struggle to make ends meet.
As we thank workers today, we should recognize that our entire state has benefited from their sacrifices and that corporations’ success ultimately depends on their workers.