Are Indiana’s corporate executives overpaid?
A new report from the AFL-CIO finds that CEOs of Indiana companies in the S&P 500 index earned more than 306 times the amount of the average Hoosier worker in 2014.
Corporate CEOs earned $12,556,710 on average compared to just $41,033 for the average worker.
The report is part of the AFL-CIO’s “Executive Paywatch,” which tracks CEO pay of S&P 500 companies, who are among the largest in the nation. The average CEO pay to average worker disparity is even worse in the nation as a whole with a 373-to-1 pay differential.
“This report shows what so many Hoosier families and working Americans experience every day: the economy isn’t working for everyone,” said Brett Voorhies, Indiana State AFL-CIO President. “The deck is clearly stacked in favor of those at the very top, while workers continue to get left behind.”
The AFL-CIO argues that the Indiana legislature’s recent repeal of the common construction wage will exacerbate income inequality in the state. The common construction wage is a Depression era law that set minimum pay rates on local and state government construction projects.
“Unfortunately our state leaders won’t even acknowledge this problem and continue to pass laws to make it even worse,” Voorhies added.
Proponents of repeal argued that the free market should decide how much construction workers are paid. They also said that it would result in savings for local and state government. Opponents say that the repeal will hurt Indiana workers and encourage cheap out-of-state labor to flood the construction industry.
As for average CEO pay, the report highlights the fact that perceptions on the pay differential between workers and business executives does not match reality. American survey respondents estimated a 30 to 1 pay ratio between unskilled workers and CEOs, according to research reported in the Harvard Business Review. The respondents vastly underestimated the pay differential, which is in fact more than ten times higher.