Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

An analysis released this week by the CIPD and the High Pay Centre highlights the extent of income inequality in the UK by comparing the compensation of FTSE 100 CEOs to that of Britain’s average full-time employee, the Guardian’s Rupert Neate reports:

The chief executives of FTSE 100 companies are paid a median average of £3.45m a year, which works out at 120 times the £28,758 collected by full-time UK workers on average. On an hourly basis the bosses will have earned more in less than three working days than the average employee will pick up this year, leading campaigners to dub the day “Fat Cat Thursday”. …

The analysis … shows chief executives of FTSE 100 companies are paid an average of £898 per hour – 256 times what apprentices earn on the minimum wage.

The ratio between the pay of the CEO and the average employee (the definition of which is a matter of some controversy) is becoming a widely accepted standard for measuring income inequality within organizations and societies. As the pay gap between top executives and the rank and file has grown in recent decades, spurred on in some cases by tax loopholes, activists have decried this trend as evidence that CEOs are overpaid, while employees are not receiving their fair share of growing corporate profits.

In an effort to address inequality and curb CEO pay packages deemed excessive, the UK government has proposed new laws that will require listed companies to publish and justify their CEO-to-median-employee pay ratios, along with “naming and shaming” companies whose shareholders object to executive compensation plans as determined by the board. A similar disclosure rule was adopted in the US by the Securities and Exchange Commission in 2015, which will require public companies to publish their pay ratios in their proxy statements, starting with the 2017 fiscal year. Portland, Oregon has gone a step further and imposed a surtax on companies doing business in the city whose CEOs earn more than 100 times their median employee.

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Massachusetts Becomes First State Where Over Half of Workforce Holds a Bachelor’s Degree

Massachusetts Becomes First State Where Over Half of Workforce Holds a Bachelor’s Degree

By at least one measure, Massachusetts has the most educated workforce of any state in the US, according to a new report from the Massachusetts Budget and Policy Center. Citing an analysis of Current Population Survey data by the Economic Policy Institute, the report reveals that 50.2 percent of Massachusetts workers hold at least a bachelor’s degree. New Jersey is the second most educated state, with 45.2 percent of workers holding BAs, followed by New York, Maryland, and Connecticut. Nationwide, 35.5 percent of the workforce has a bachelor’s degree.

The report, titled “Education and State Economic Strength: A Snapshot of Current Data,” also notes that these high levels of education correlate with high median hourly wages: $21.35 in New Jersey and $21.22 in Massachusetts compared to a national average of $17.80.

“While it might seem obvious in 2017 that higher levels of college education would be associated with higher earnings at the state level,” the report adds, “this relationship is actually a fairly recent feature of the US economy. In 1979, the correlation between the educational attainment of a state’s workforce and its median hourly wage was weak.”

Indeed, the EPI’s latest research has found that the college wage premium is at an all-time high since economists began measuring it over 40 years ago. Other studies have shown that the class of 2017 stood to earn higher starting salaries than their peers who graduated in other recent years, while holders of two-year associate degrees are also finding more decent-paying jobs than they were a generation ago.

Wages in Massachusetts have also been growing faster for more educated than less educated workers, and a key challenge for the state today is ensuring that young people can afford the advanced educations they need to remain competitive in a highly educated job market, the Boston Globe’s Katie Johnson points out:

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