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A note from EPI’s Kirstyn Flood: As if being historically underpaid wasn’t hard enough, working Black women have faced even greater challenges during the coronavirus pandemic. Black Women’s Equal Pay Day on August 13 marked how far into 2020 the average Black woman must work to make the same amount as the average non-Hispanic white man in 2019. And speaking of inequality, CEO pay continues to skyrocket, with top executives making 320 times what their typical workers make, according to our new report.
EPI experts weigh in on wages—from those at the top to those who are struggling to stay above water.
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CEO compensation at the United States’ top 350 firms grew 14% to $21.3 million on average, according to a new EPI analysis. From 1978 to 2019, CEO compensation grew by 1,167%; the compensation of a typical worker, meanwhile, rose just 13.7%. The ratio of CEO-to-worker compensation was 320-to-1 in 2019, up from 293-to-1 in 2018 and a big increase from 21-to-1 in 1965. The authors expose how CEO pay cuts announced during the pandemic, as corporations cut millions of jobs, have been more PR than substance. Corporate executives who volunteer to take salary cuts aren’t making a large sacrifice, because the vast majority of their pay comes from stock awards and options—salaries made up only about 7% of compensation. The authors name several policy solutions that would reduce the ability of CEOs to extract increasingly higher pay—without hurting the overall economy—including:
- Reinstating higher marginal income tax rates at the very top of the income ladder
- Setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation
- Capping compensation and tax anything over the cap
- Allowing greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation. Read the report »
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CEO compensation surged 14% in 2019 to $21.3 million
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Two weeks ago 1.3 million workers applied for unemployment insurance benefits. More specifically, 832,000 applied for regular state unemployment insurance and 489,000 applied for Pandemic Unemployment Assistance. As the pandemic drags on, many workers are facing long-term joblessness. The number of people claiming Pandemic Emergency Unemployment Compensation, the 13 additional weeks of benefits available to workers who have exhausted the 26 weeks of regular benefits, increased by 67,000 during the week of July 25. However, it is clear that even this 13-week extension is not enough to meet the needs of many workers, and policymakers should extend it even further. As evidence of this, the Extended Benefits program, which provides an additional 13 weeks of benefits after PEUC, had a 56,000 increase in claimants during the week of July 25. There are now 126,000 workers claiming Extended Benefits, the highest number so far this recession, and every state meets the high unemployment threshold that is required for these benefits to kick in. Congress must not allow another crucial provision to lapse. Read the blog post »
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Black Women’s Equal Pay Day, August 13, is a day to call attention to the fact that Black women deserve equal pay but are still severely underpaid. It marks how far into 2020—seven and a half months—that the average Black woman must work to make the same amount as the average non-Hispanic white man was paid in 2019. On an average hourly basis, Black women are paid just 66 cents on the dollar relative to non-Hispanic white men with the same level of education, age, and geographic location. While this large pay gap has always been unjust and offensive to the millions of working Black women in this country, it is especially so under the current health and economic crisis. EPI analyzed the average hourly earnings of Black women and non-Hispanic white men employed in major occupations at the center of national efforts to address the public health and economic effects of COVID-19. These occupations include front-line workers in health care and essential businesses, those in the restaurant industry, and teachers and child care workers who are critical as the economy struggles to reopen and essential to fully reopening the economy when it is safe to do so. Read the blog post »
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On June 15, Trump appointed Louis DeJoy, a North Carolina businessman and Republican fundraiser, as the new Postmaster General and set in motion a war on the Postal Service.
What’s the real impact?
- Postmaster Louis DeJoy’s recent service cuts, such as eliminating overtime and late trips, leaving mail to be delivered the next day, could harm the integrity of the November elections, which will rely heavily on mail voting.
- Postal workers are twice as likely to be military veterans as non-postal workers, because veterans benefit from preferential hiring in federal jobs and many have skills sought by the Postal Service. One in five postal workers is Black, nearly double Black workers’ share of the non-postal workforce.
- Rival private services like FedEx and UPS will likely gain customers from these cuts, which affect service. The beneficiaries of DeJoy’s actions will likely include low-wage “worksharing” companies that do work outsourced by the Postal Service, such as presorting and transporting bulk mail closer to its destination.
- Whereas federal law requires federal contractors in the construction and related industries to pay workers the prevailing wage—usually the area’s union wage—nothing prevents the Postal Service from contracting with companies whose only competitive advantage is paying low wages—often as a result of union-busting.
- Since the Postal Service is required to rebate the full cost savings from outsourcing to the companies doing the work, “worksharing” doesn’t even benefit the Postal Service—but workers definitely lose out.
Most Americans will be hurt if Trump succeeds in gutting the Postal Service, but workers—the Postal Service’s fiercest champions—will be hurt most of all. Read the blog post »
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The Economic Policy Institute (EPI) hosted a bipartisan economists’ panel on the urgent need for substantial state and local aid as part of the next coronavirus relief package. Experts addressed the pluses and minuses of legislation proposed by House Democrats and Senate Republicans and discussed a broader set of economic issues caused by the coronavirus pandemic. EPI President Thea Lee opened with introductory remarks, followed by a panel discussion moderated by Washington Post reporter Heather Long. Watch the video »
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To keep the gravy train going for mostly white one-percenters and prop up the plutocracy, political leaders are using toxic populism with a racially infused culture-war strategy to stay in power—a strategy led by Trump and playing out daily in his tweet storms, according to political scientists and authors of Let Them Eat Tweets Jacob S. Hacker and Paul Pierson. Hacker and Pierson discussed their book, followed by a panel of EPI experts who talked about what can be done to derail this distorted political influence by the rich and derail rising inequality. EPI President Thea Lee moderated. Watch the video »
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EPI hosted a panel of experts on why policy must be changed to reverse the nation’s culture of anti-Blackness and the economic inequality surrounding it. EPI Distinguished Fellow Richard Rothstein discussed his book The Color of Law, followed by a discussion on reshaping the country into one that values Black lives and bolsters economic opportunities for all. Watch the video »
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Never in our lives have we experienced such a global phenomenon. Read more »
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CEO pay cuts during COVID are window dressing
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