Your boss likely had a good year in 2017, even if you did not.
Executives saw a huge surge in compensation in the past year, according to a study released Thursday by the non-profit think tank the Economic Policy Institute. The average chief executive officer at the 350 largest firms in the U.S. received $18.9 million in compensation in 2017, a 17.6% increase over 2016. Meanwhile, the typical worker’s compensation remained flat, rising a mere 0.3%.
The gap between executives and the average worker has been widening for decades, the study found. The CEO-to-worker compensation ratio in 2017 was 312-to-1, a huge jump from just 20-to-1 in 1965. In 2016, Wall Street executives saw bonuses jump 10% and pay increase as much as 20% according to a study released last year by compensation firm Johnsons Associates Inc.
This is not the highest compensation ever for executives, though: The average CEO compensation peaked in 2000 at the height of the stock bubble at $21 million — 344 times the pay of the typical worker.
Don’t miss: America’s 1% hasn’t controlled this much wealth since before the Great Depression
Still, in the nine years since the end of the Great Recession, an unusually high percentage of Americans (14%) are still not seeing pay raises. The federal minimum wage is $7.25 an hour and hasn’t increased since 2009, although some states and municipalities enacted laws to raise the wage this year.
Salary increases in 2018 are at 2.8%, according to another study released Thursday by professional services firm Mercer, no change from 2017. The majority of firms it works with are expressing concerns about retaining workers.
This rise in inequality has fueled an ongoing tension between the “haves and the have-nots,” said Mark Hamrick, senior economic analyst and Washington bureau chief at finance site BankRate.com.
“There’s no group which has more than the top 1%, including CEOs of the largest publicly-traded companies,” he said. “When the income ratio is more than 300-to-1, that also tells you how many years a typical worker would have to toil with an income to make just as much as a typical corporate chieftain.”
In 2016, there were eight CEOs with pay packages exceeding $30 million. Meanwhile, America’s Middle class has been shrinking and lost 30% of its wealth over the last four decades, according to another 2015 study.
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