That’s $47,000 for you, $14 million for big boss

Analysis:

This article is attributed GR Press business reporter Rick Haglund and utilizes data from the US Census Bureau on the gap between the average US wage worker and US CEO. Does the Headline seem to frame the story in a biased fashion? The first source cited in the story in the Economic Policy Institute, considered to be a left of center think tank, followed by the Center for Budget and Policy Priorities. Both of these sources are critical of the income gap between workers and CEOs.

The article then cites what are referred to as “conservative and business related groups” that present a positive spin on the wage gap. The National Association of Manufactureres and the American Enterprise Institute are the two national groups cited. The article states that “Gallup polls for the American Enterprise Institute found that 43 percent of all workers last year were “completely satisfied” with their jobs,” but the story doesn’t provide any details on how the question was posed to workers. The article also cites a Michigan based think tank, the Mackinac Center for Public Policy which makes claims about Michigan’s economy. The reporter does not verify those claims, but does provide some oppositional information in the last paragraph that is not sourced. Was it clear from the article why there is a substantial gap between workers wages and CEOs? Did any of the sources cited help answer that question that was posed by the story at the very beginning? According to the annual report by a United for a Fair Economy the CEO/worker wage disparity is actually 364 times, not the 262 times number that was cited in the Press story. Why do you think these numbers are not the same? Unlike the Press article the United for a Fair Economy provides details on the CEO/Worker differences in their lengthy report, unlike the brief comments from sources cited in the article.

Story:

Maybe it shouldn’t be called Labor Day anymore. How about Chief Executive Officer’s Day? Or maybe Upper-Middle-Class Family Day?

First celebrated in New York in 1882 as a “workingmen’s holiday,” Labor Day 2007 is less a day of rest for wage earners than another day for them to worry about their economic futures.

A variety of data show that the average worker continues to lose ground to CEOs and others at the top of the wage scale.

Nationally, median family income rose a slight 0.7 percent in 2006 for the second straight year, from $47,845 in 2005 to $48,201, according to Census Bureau figures released Wednesday.

But median income fell 0.7 percent from 2005 to 2006 in Michigan as the auto industry contracted and tens of thousands of unionized workers left the labor force.

State median family income dropped from $47,558 in 2005 to $47,182, according to the census report.

But the census figures showed that median family income rose nationwide because more family members were working or were working more hours.

And in Michigan, family income fell 0.7 percent, to $47,182, as the auto industry contracted.

But the share of income going to the top fifth of households was 50.5 percent, the highest since 1967, according to the Economic Policy Institute in Washington,DC.

“Too many low and middle income families aren’t sharing in the gains,” said Robert Greenstein, executive director of the Center on Budget and POlicy Priorities in Washington, DC.

The story is much brighter for chiefs of major corporations and the wealthiest in society.

CEOs of major corporations earned 262 times what the average wage earners made in 2005, the last year available according to the Economic Policy Institute. That is up from 24 times in 1965.

Another study from The Corporate Library,a watchdog group in Portland, Maine, found CEO pay rose 23.8 percent last year from 2005. The average CEO in the Standard & Poor’s 500 made $14.78 million in 2006, according to the group.

Why are CEOs being paid so well, while many workers struggle to pay their home mortages and make ends meet?

“Because they can get away with it,” Economic Policy Institute President Larry Mishel said.

Mishel and others say CEO pay is often set by well-paid directors who are simply paying what the market will bear, similar to the way entertainers and professional athletes are paid.

“CEO pay is totally disconnected from worker pay,” Mishel said.

But some conservative and business related groups say many workers are well paid and generally happy with their jobs.

US manufacturing workers earned an average $68,680 last year, up 4 percent from $66, 181 in 2005 according to the National Association of Manufacturers.

And Gallup polls for the American Enterprise Institute found that 43 percent of all workers last year were “completely satisfied” with their jobs, compared to 29 percent in 1989.

Michigan workers would be better off if the state outlawed compulsory union membership and became a right to work state, a study by the Midland based Mackinac Center for Public Policy showed.

From 2001 to 2006, right to work states created jobs at twice the rate of non-right to work states, according to the free-market think tank. Those work states also experienced faster economic growth and lower unemployment.

But the new census figures show that many right to work states, including South Carolina, Alabama and Texas, had higher poverty rates and fewer people with health insurance than Michigan.