RALEIGH – With new data showing a gap of 287-to-1 over median worker compensation, the obvious question is: Why such a difference?
Dr. Mike Walden, an economist at N.C. State, says there’s no easy answer – so he explains several possibilities:
“The CEO-average work pay gap has long been an issue, and the gap has become larger in recent decades. The best logical explanation for the growing gap is the greater perceived worth by companies of having a top-flight CEO.”
Top-exec spots in the executive suite are often not easy ones these days, he notes.
“Increasingly CEOs must deal with international operations and competition, complex regulations, and rapidly changing management challenges related to advancing information technology and new competitors enabled by that technology.”
Then there is the downward pressure placed on wages.
“In contrast, foreign workers and operations can often be used as substitutes for domestic workers, and the increased capability of modern technology and automation can often also be used as an alternative for domestic workers,” Walden points out.
“Both of the latter factors mean the tasks performed by domestic workers can sometimes be done in other ways – and this is a factor that would put downward pressure on domestic workers’ wages. “