Americans want the gap between CEO pay and average worker pay to be a lot smaller than they believe it to be—but
they have no idea how big the gap really is. A new study from Harvard Business School finds that:
- Americans believe that CEOs make 30 times as much as unskilled workers.
- By contrast, Americans believe that CEOs should only make seven times as much as unskilled workers.
- In reality, CEOs make far, far more: 354 times as much in 2012, by some measures.
What's more, Americans are uniquely unaware of how big the gap between CEO pay and regular-people pay is:
The gap between Americans' perception and reality is the most among any of the 16 countries for which the researchers measured both the perceived and actual pay inequality.
Part of that stems from Americans’ comparatively modest estimation. The citizens of four countries—South Korea, Australia, Chile, and Taiwan—estimate a higher pay gap between CEOs and low level workers. In South Korea, the perception is that CEOs make 42 times more than the average worker; in Australia, it’s just over 41; in Taiwan, it’s roughly 34; and in Chile, it’s about 33.
American CEOs make more than CEOs in other countries, yet Americans think their CEOs make less than people in those other countries do. This lack of awareness might just be why Republicans get away with pushing policies trying to protect the poor sad CEOs. It's certainly an experiment worth trying if we want to make the U.S. a more equal place: Try to get the word out about the crazy amount CEOs are paid compared to the rest of us.
But hey, if you're looking for ways to say "We're number one," you should grab onto this. We're number one in CEO pay and number one in the ratio between CEO pay and average worker pay. U-S-A!