Wage ratio: Difference between revisions
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In [[economics]], the '''wage ratio''' refers to the [[ratio]] of the top salaries in a group (company, city, country, etc.) to the bottom salaries. It is a measure of [[wage dispersion]]. |
In [[economics]], the '''wage ratio''' refers to the [[ratio]] of the top salaries in a group (company, city, country, etc.) to the bottom salaries. It is a measure of [[wage dispersion]]. |
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There has been a resurgence for the importance of equitable wage ratio. The amount of money paid out to executives has steadily been on the rise. "An April 2013 study by Bloomberg finds that large public company CEOs were paid an average of 204 times the compensation of rank-and-file workers in their industries. By comparison, it is estimated that the average CEO was paid about 20 times the typical worker’s pay in the 1950s, with that multiple rising to 42-to-1 in 1980, and to 120-to-1 in 2000".<ref>{{cite web|last=Aguilar|first=Louis A.|title=SEC Open Meeting|url=https://www.sec.gov/News/Speech/Detail/Speech/1370539813937#.UqFAohbFnwy|accessdate=6 December 2013}}</ref> While not as extreme, similar trends have been observed around the world. |
There has been a resurgence for the importance of equitable wage ratio. The amount of money paid out to executives has steadily been on the rise. "An April 2013 study by Bloomberg finds that large public company CEOs were paid an average of 204 times the compensation of rank-and-file workers in their industries. By comparison, it is estimated that the average CEO was paid about 20 times the typical worker’s pay in the 1950s, with that multiple rising to 42-to-1 in 1980, and to 120-to-1 in 2000".<ref>{{cite web|last=Aguilar|first=Louis A.|title=SEC Open Meeting|url=https://www.sec.gov/News/Speech/Detail/Speech/1370539813937#.UqFAohbFnwy|website=Sec.gov|accessdate=6 December 2013}}</ref> While not as extreme, similar trends have been observed around the world. |
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With wage ratios steadily climbing, there has been a push to have increased transparency in publicizing the ratio for many of the world's largest companies. There have also been a number of movements around to the world to attempt to regulate the pay ratio between executives and workers, or to regulate executive pay from the workers' end. |
With wage ratios steadily climbing, there has been a push to have increased transparency in publicizing the ratio for many of the world's largest companies. There have also been a number of movements around to the world to attempt to regulate the pay ratio between executives and workers, or to regulate executive pay from the workers' end. |
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'''Canada''': [[Wagemark|The Wagemark Foundation]], a Toronto-based not-for-profit organization is working to create an international wage standard certifying organizations that can prove they operate with a wage ratio of 8:1 or lower. |
'''Canada''': [[Wagemark|The Wagemark Foundation]], a Toronto-based not-for-profit organization is working to create an international wage standard certifying organizations that can prove they operate with a wage ratio of 8:1 or lower. |
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'''Germany''': Companies in Germany with over 2000 employees are required to have a [[supervisory board]], half of which are required to be workers of said company, under the [[Mitbestimmungsgesetz]], enforcing [[Codetermination in Germany|codetermination]]. The supervisory board sets the executive wages of the company.<ref>https://dejure.org/gesetze/AktG/87.html</ref> |
'''Germany''': Companies in Germany with over 2000 employees are required to have a [[supervisory board]], half of which are required to be workers of said company, under the [[Mitbestimmungsgesetz]], enforcing [[Codetermination in Germany|codetermination]]. The supervisory board sets the executive wages of the company.<ref>[https://dejure.org/gesetze/AktG/87.html] {{dead link|date=November 2017}}</ref> |
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'''Spain''': In 2013, the Spanish [[Spanish Socialist Workers' Party|Socialist Workers Party]], the official Spanish opposition party, adopted a ratio as part of their official policy.<ref>{{cite web|url=http://www.businessinsider.com/switzerland-to-vote-on-executive-pay-law-sunday-2013-11|title=Switzerland's Proposed New Law To Link Executives' Pay With Their Lowest Paid Workers Could Lead To A Banking Exodus| |
'''Spain''': In 2013, the Spanish [[Spanish Socialist Workers' Party|Socialist Workers Party]], the official Spanish opposition party, adopted a ratio as part of their official policy.<ref>{{cite web|url=http://www.businessinsider.com/switzerland-to-vote-on-executive-pay-law-sunday-2013-11|title=Switzerland's Proposed New Law To Link Executives' Pay With Their Lowest Paid Workers Could Lead To A Banking Exodus|website=Businessinsider.com|accessdate=5 November 2017}}</ref> The [[Mondragon Corporation]], a worker-owned cooperative headquartered in the [[Basque Country (autonomous community)|Basque Country]], has an internal wage ratio at an average of 5:1, periodically decided with a democratic vote.<ref name='Herrera'>{{cite journal |last1=Herrera |first1=David |year=2004 |title=Mondragon: a for-profit organization that embodies Catholic social thought. |journal=Review of Business |volume=25 |issue=1 |pages=56–68 |publisher=The Peter J. Tobin College of Business, St. John's University|archiveurl=https://web.archive.org/web/20100714041351/http://www.community-wealth.org/_pdfs/articles-publications/outside-us/article-herrera.pdf|archivedate=2010-07-14|url=http://community-wealth.org/_pdfs/articles-publications/outside-us/article-herrera.pdf |accessdate=August 29, 2014}}</ref> |
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'''Switzerland''': {{ill|Popular Initiative "1:12 Initiative - For fair wages"|de|Eidgenössische Volksinitiative «1:12 – Für gerechte Löhne»|fr|Initiative populaire « 1:12 - Pour des salaires équitables »}} was a Swiss referendum held on November 24, 2013 in an attempt to create legislation limiting the amount of executive pay to a maximum of 12 times that of the lowest paid workers. The referendum was rejected by 65.3%, with a turnout of 53%, and no canton took on the initiative. The largest rejection came form the [[canton of Zug]], accepted by only 23% of the votes, and the least rejection came from [[Ticino]], where it was supported by 49%.<ref>{{cite web|url=http://www.srf.ch/news/schweiz/abstimmungen/abstimmungen/1-12-initiative/65-3-prozent-sagen-nein-zur-1-12-initiative|title=65,3 Prozent sagen Nein zur 1:12-Initiative|work=[[Schweizer Radio und Fernsehen|SRF]] Online|access-date=24 November 2013|trans-title=65.3 Percent Say No to 1:12 Initiative}}</ref><ref>{{cite web|url=https://www.admin.ch/ch/d/pore/vi/vis375.html|title=Eidgenössische Volksinitiative '1:12 - Für gerechte Löhne'|trans-title=Federal Popular Initiative "1:12 - For fair wages"|publisher=[[Government of Switzerland]]|access-date=2017-02-12}}</ref> |
'''Switzerland''': {{ill|Popular Initiative "1:12 Initiative - For fair wages"|de|Eidgenössische Volksinitiative «1:12 – Für gerechte Löhne»|fr|Initiative populaire « 1:12 - Pour des salaires équitables »}} was a Swiss referendum held on November 24, 2013 in an attempt to create legislation limiting the amount of executive pay to a maximum of 12 times that of the lowest paid workers. The referendum was rejected by 65.3%, with a turnout of 53%, and no canton took on the initiative. The largest rejection came form the [[canton of Zug]], accepted by only 23% of the votes, and the least rejection came from [[Ticino]], where it was supported by 49%.<ref>{{cite web|url=http://www.srf.ch/news/schweiz/abstimmungen/abstimmungen/1-12-initiative/65-3-prozent-sagen-nein-zur-1-12-initiative|title=65,3 Prozent sagen Nein zur 1:12-Initiative|work=[[Schweizer Radio und Fernsehen|SRF]] Online|access-date=24 November 2013|trans-title=65.3 Percent Say No to 1:12 Initiative}}</ref><ref>{{cite web|url=https://www.admin.ch/ch/d/pore/vi/vis375.html|title=Eidgenössische Volksinitiative '1:12 - Für gerechte Löhne'|trans-title=Federal Popular Initiative "1:12 - For fair wages"|publisher=[[Government of Switzerland]]|access-date=2017-02-12}}</ref> |
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'''United Kingdom''': In 2017, the [[Leader of the Opposition (United Kingdom)|Leader of the Opposition]] [[Jeremy Corbyn]] called for an enforced wage ratio for any company awarded a [[Government procurement|government contract]], of 20:1 between the executives and the lowest-paid employee. A similar call was previously made by [[Prime Minister of the United Kingdom|Prime Minister]] [[David Cameron]] in 2010 for the public sector.<ref>{{cite web|url=http://www.theguardian.com/politics/2017/jan/10/corbyn-proposes-maximum-wage-for-all-government-contractors|title=Corbyn calls for wage cap on bosses at government contractors| |
'''United Kingdom''': In 2017, the [[Leader of the Opposition (United Kingdom)|Leader of the Opposition]] [[Jeremy Corbyn]] called for an enforced wage ratio for any company awarded a [[Government procurement|government contract]], of 20:1 between the executives and the lowest-paid employee. A similar call was previously made by [[Prime Minister of the United Kingdom|Prime Minister]] [[David Cameron]] in 2010 for the public sector.<ref>{{cite web|url=http://www.theguardian.com/politics/2017/jan/10/corbyn-proposes-maximum-wage-for-all-government-contractors|title=Corbyn calls for wage cap on bosses at government contractors|author=Rowena Mason|date=10 January 2017|website=Theguardian.com}}</ref><ref>{{cite web|url=http://www.wagemark.org/about/history/|title=History - Wagemark|website=Wagemark.org}}</ref> |
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'''United States''': In 2010 President [[Barack Obama]] signed into effect the [[Dodd–Frank Wall Street Reform and Consumer Protection Act]]. In short, Section 953(b) of the Dodd-Frank Act changed the regulation regarding CEO compensation disclosure to shareholders.<ref>https://www.sec.gov/News/Speech/Detail/Speech/1370539813937#.UqD9NxbFnww</ref> In December 2016, the city of [[Portland, Oregon|Portland]], [[Oregon]] voted to implement a surcharge for chief executives who earn more than 100 times the median pay of their workers in 2017.<ref>{{cite web|url=https://www.nytimes.com/2016/12/07/business/economy/portland-oregon-tax-executive-pay.html|title=Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality|first=Gretchen|last=Morgenson|date=7 December 2016| |
'''United States''': In 2010 President [[Barack Obama]] signed into effect the [[Dodd–Frank Wall Street Reform and Consumer Protection Act]]. In short, Section 953(b) of the Dodd-Frank Act changed the regulation regarding CEO compensation disclosure to shareholders.<ref>[https://www.sec.gov/News/Speech/Detail/Speech/1370539813937#.UqD9NxbFnww] {{dead link|date=November 2017}}</ref> In December 2016, the city of [[Portland, Oregon|Portland]], [[Oregon]] voted to implement a surcharge for chief executives who earn more than 100 times the median pay of their workers in 2017.<ref>{{cite web|url=https://www.nytimes.com/2016/12/07/business/economy/portland-oregon-tax-executive-pay.html|title=Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality|first=Gretchen|last=Morgenson|date=7 December 2016|website=Nytimes.com}}</ref> |
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== |
==See also== |
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* [[Maximum wage]] |
* [[Maximum wage]] |
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==References== |
==References== |
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{{ |
{{Reflist}} |
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[[Category:Wages and salaries|Ratio]] |
[[Category:Wages and salaries|Ratio]] |
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Revision as of 10:42, 5 November 2017
In economics, the wage ratio refers to the ratio of the top salaries in a group (company, city, country, etc.) to the bottom salaries. It is a measure of wage dispersion.
There has been a resurgence for the importance of equitable wage ratio. The amount of money paid out to executives has steadily been on the rise. "An April 2013 study by Bloomberg finds that large public company CEOs were paid an average of 204 times the compensation of rank-and-file workers in their industries. By comparison, it is estimated that the average CEO was paid about 20 times the typical worker’s pay in the 1950s, with that multiple rising to 42-to-1 in 1980, and to 120-to-1 in 2000".[1] While not as extreme, similar trends have been observed around the world.
Attempts at changing wage ratios
With wage ratios steadily climbing, there has been a push to have increased transparency in publicizing the ratio for many of the world's largest companies. There have also been a number of movements around to the world to attempt to regulate the pay ratio between executives and workers, or to regulate executive pay from the workers' end.
Canada: The Wagemark Foundation, a Toronto-based not-for-profit organization is working to create an international wage standard certifying organizations that can prove they operate with a wage ratio of 8:1 or lower.
Germany: Companies in Germany with over 2000 employees are required to have a supervisory board, half of which are required to be workers of said company, under the Mitbestimmungsgesetz, enforcing codetermination. The supervisory board sets the executive wages of the company.[2]
Spain: In 2013, the Spanish Socialist Workers Party, the official Spanish opposition party, adopted a ratio as part of their official policy.[3] The Mondragon Corporation, a worker-owned cooperative headquartered in the Basque Country, has an internal wage ratio at an average of 5:1, periodically decided with a democratic vote.[4]
Switzerland: Popular Initiative "1:12 Initiative - For fair wages" was a Swiss referendum held on November 24, 2013 in an attempt to create legislation limiting the amount of executive pay to a maximum of 12 times that of the lowest paid workers. The referendum was rejected by 65.3%, with a turnout of 53%, and no canton took on the initiative. The largest rejection came form the canton of Zug, accepted by only 23% of the votes, and the least rejection came from Ticino, where it was supported by 49%.[5][6]
United Kingdom: In 2017, the Leader of the Opposition Jeremy Corbyn called for an enforced wage ratio for any company awarded a government contract, of 20:1 between the executives and the lowest-paid employee. A similar call was previously made by Prime Minister David Cameron in 2010 for the public sector.[7][8]
United States: In 2010 President Barack Obama signed into effect the Dodd–Frank Wall Street Reform and Consumer Protection Act. In short, Section 953(b) of the Dodd-Frank Act changed the regulation regarding CEO compensation disclosure to shareholders.[9] In December 2016, the city of Portland, Oregon voted to implement a surcharge for chief executives who earn more than 100 times the median pay of their workers in 2017.[10]
See also
References
- ^ Aguilar, Louis A. "SEC Open Meeting". Sec.gov. Retrieved 6 December 2013.
- ^ [1] [dead link]
- ^ "Switzerland's Proposed New Law To Link Executives' Pay With Their Lowest Paid Workers Could Lead To A Banking Exodus". Businessinsider.com. Retrieved 5 November 2017.
- ^ Herrera, David (2004). "Mondragon: a for-profit organization that embodies Catholic social thought" (PDF). Review of Business. 25 (1). The Peter J. Tobin College of Business, St. John's University: 56–68. Archived from the original (PDF) on 2010-07-14. Retrieved August 29, 2014.
- ^ "65,3 Prozent sagen Nein zur 1:12-Initiative" [65.3 Percent Say No to 1:12 Initiative]. SRF Online. Retrieved 24 November 2013.
- ^ "Eidgenössische Volksinitiative '1:12 - Für gerechte Löhne'" [Federal Popular Initiative "1:12 - For fair wages"]. Government of Switzerland. Retrieved 2017-02-12.
- ^ Rowena Mason (10 January 2017). "Corbyn calls for wage cap on bosses at government contractors". Theguardian.com.
- ^ "History - Wagemark". Wagemark.org.
- ^ [2] [dead link]
- ^ Morgenson, Gretchen (7 December 2016). "Portland Adopts Surcharge on C.E.O. Pay in Move vs. Income Inequality". Nytimes.com.