A Growing Compensation Disparity Isn’t Lost on U.S. Workers
The Covid years were rough years. But even with the pandemic now behind us, many Americans continue to struggle thanks to inflation and wage stagnation. The icing on this bitter cake is higher CEO salaries. A growing disparity between executive compensation and what average workers take home every week isn’t lost on those workers.
Data recently released by Jobcase shows that CEO salaries in America increased 15% more than that of average workers in 2019 and 2020. Meanwhile, corporate profits continue to grow at a rate 2.4% higher than inflation. What does it mean for workers? It means they are working harder to make their companies more profitable but not reaping the benefits of those profits. They are not happy about it, either.
The Great Resignation and Reshuffle
We saw the first signs of a general unhappiness emerge as Americans started going back to work in late 2020. What was called the Great Resignation began that summer and continued through 2021 and into 2022. It was all about dissatisfied workers deciding they had had enough of the status quo.
Millions quit their jobs in search of greener pastures elsewhere. Some started their own businesses. Others went to work for different companies. Still others decided they were done working altogether. The Great Resignation was eventually replaced by the Great Reshuffle.
According to the U.S. Chamber of Commerce, approximately 4.2 million people quit their jobs in November 2022. But hiring has outpaced quitting by about 4% for the last couple of years. So what’s going on? Workers are shuffling jobs. They are constantly on the lookout for better opportunities elsewhere. And as soon as such opportunities come up, they jump ship.
They Are In It for Themselves
It turns out that America’s workers have had a change of heart since the pandemic. They are now more likely to be in it for themselves, which is to say that they are not as interested in loyalty or long-term careers anymore. They are tired of giving their employers their best only to be left behind while company profits soar and executive management reaps the financial benefits.
To be fair, the disparity between executive and worker compensation is more a corporate thing than anything else. No such disparity exists among small businesses striving to stay afloat in a tough economy. Nonetheless, there is some amount of spillover as workers might assume small business owners are also getting rich off their hard work.
Employees Deserve More
So what can be done about the compensation disparity and its effect on worker attitudes? The solution is simple: close the disparity by giving employees more. They deserve more. At the very least, workers need their wages to keep pace with inflation. They also deserve standard medical benefits.
Dallas-based BenefitMall suggests that companies go beyond standard medical to offer a range of voluntary benefits as well. They recommend dental, vision, disability, and life insurance as starting points for non-med options.
Adequate wages, medical insurance, and a range of non-med benefits help to level the playing field to some degree. Workers know that their compensation will never match CEO compensation, but they are likely to have more positive feelings about their employers if their own salary and benefits packages meet their needs.
Right now, those needs are not being met for a large number of American workers. They are not blind to that fact, or that corporate profits and CEO salaries are outpacing their own wages. Employers would do well to take heed of this. Otherwise, it is going to come back to bite them.