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According to a recent study published by the Economic Policy Institute (EPI), household incomes have decreased for the average American since 2019 and vary widely by state. (Income is defined as earnings plus Social Security, dividends, interest, etc.)
According to the EPI data, household earnings grew by 4% since 2019, with the national median earnings for workers 16 and older at $40,260 in 2021. Earnings refer to wages or salaries paid to an employee.
While the EPI data does not account for the four-decade high in inflation seen in 2022, the factors affecting household income in each state remain the same.
“At the state level, you can see how different policies produce different outcomes in workers’ earnings and household income,” Chandra Childers, senior policy and economic analyst at EPI and author of the study, told Yahoo Finance.
She noted three specific policy factors: unionization rates, minimum wage, and unemployment resources.
“For example, many of the states with the lowest wages are also anti-union states, and we know that unionization raises workers’ wages and improves working conditions,” Childers said. “More directly, states that raise their minimum wages above the federal minimum and that eliminate tipped wages allow you to compare how well workers and families might be doing in those states compared with states that don’t. States also differ in how easy or difficult it is to access supports such as unemployment insurance during an economic downturn.”
Yahoo Finance October 28, 2022 -
Union membership rates also have an effect on wealth and income inequality, according to Chandra Childers, a senior policy and economic analyst at the Economic Policy Institute (EPI).
“Unionized workers have higher earnings than non-union workers, and the states with lower earnings tend to be right-to-work states,” Childers told Yahoo Finance. (Right-to-work states mean an employer cannot require their employee to join a labor union as a condition of employment.)
Yahoo Finance October 28, 2022 -
October 28, 2022
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Dave Kamper, a senior state policy coordinator at the Economic Policy Institute, said researchers don’t have more accurate estimates for how many wage theft cases occur because he believes most victims do not report problems. He said social service organizations begin to discover cases that investigators don’t once former employees at How much do Iowa workers lose to wage theft? Millions, report says
Des Moines Register October 21, 2022 -
White women have benefited tremendously from affirmative action in employment, benefits, education, and more. According to the Economic Policy Institute, in 2017, “the median annual earnings for full-time, year-round white women workers was just over $46,513. That is 21 percent more than the annual earnings of Black women, whose average salary was $36,735. Hispanic women earned even less, just $32,002 per year.” Also, looking at men’s income by race tells a story of further advantage for white women. While the acceptance and practice of interracial marriage have increased dramatically, white people are least likely of all racial groups to marry outside their race.
YES! Magazine October 21, 2022 -
Since the California law began taking effect, work hours for farm workers have held consistent, Daniel Costa, the director of immigration law and policy research at the left-leaning think-tank Economic Policy Institute, testified in January to the wage board, citing National Agricultural Statistics Service data.
USA Today October 21, 2022 -
The groups at the highest risk of workplace surveillance are prevalent in meatpacking. Animal slaughtering and processing workers are more than twice as likely to be immigrants compared to the entire U.S. workforce. Of the foreign-born workers, 70% are noncitizens, according to the Economic Policy Institute.
Nebraska Examiner October 21, 2022 -
The same UTLA report offers a reason for that: Los Angeles teachers are paid 22% less than other Los Angeles workers with the same level of education. That’s in line with the 23.5% teacher pay penalty the Economic Policy Institute finds nationally. Pay for first-year Los Angeles teachers is $51,440, an amount that does not allow them to afford average rent in any neighborhood of the expensive city they teach in without being rent-burdened—and that’s according to the school district.
Daily Kos October 21, 2022 -
This phenomenon is explored in a new report by the Economic Policy Institute (EPI), whose findings are staggering. From 1978 to 2021, CEOs at the top 350 firms in the U.S. saw their compensation packages grow by 1,460%. For purposes of comparison, the stock market grew by 1,063% during that time, and the top 1% of earners saw their compensation rise 385% between 1978 and 2020 (the latest data available).
Even under the most generous assessment of the value a CEO brings to a company (or to its stock price), the gulf between top executives and the rank and file is extreme. More to the point, CEO pay isn’t really controlled or regulated by anything other than board votes. For an employee who is constantly being ground down to the lowest wage that can possibly be paid, that has to rankle.
“The reason for this mostly lies in the totally dysfunctional wage market in which CEOs reside,” says Josh Bivens, director of research at the EPI and a co-author of the study. “We’re talking about a big enough chunk of money that it actually matters, too.”
The average compensation package for a CEO at one of the U.S.’s top 350 companies last year was nearly $28 million, per EPI’s research. Significantly, very little of that total, only about 10%, was taken in salary, Bivens says, while roughly 80% came in the form of stock awards. (The next time you read about a CEO forgoing his salary amid a corporate crisis, it’s something to keep in mind.)
Partly because of that heavy stock mix, the institute looks at CEO compensation in two ways: the “granted” measure, which is the value of the stock rewards and options at the time they’re given, and the “realized” measure, which is what they’re worth when the stock awards are vested and the options cashed in.
By both methods of computation, top CEOs are killing it. Using the realized measure, they actually averaged an 11.1% increase in pay from 2020 to 2021, when the pandemic brought entire industries to a near halt and millions of Americans were thrown out of work. Reason? The stock market went up, and along with it the value of vested stock awards.
At most public companies, CEO pay is theoretically set by the shareholders themselves. “But the shareholders are usually represented by boards of directors, and in many, many cases, the members of those boards are hand-picked by the CEO,” Bivens says.
As a result, only about 3% of CEO compensation packages ever get turned down, Bivens says. Tim Cook’s deal was recommended against by the Maryland-based Institutional Shareholder Services, which noted that half of it wasn’t tied to a performance-based metric such as Apple’s stock price, and that the stock awards would continue to vest even if the 61-year-old Cook were to retire. It went forward anyway.
“If you get paid $85,000 for a job you’d take at $65,000, you have $20,000 in rents,” Bivens says. “The average top CEO pay is $28 million. We’re asking what would happen if, say, that compensation was cut in half. Would these executives really not show up at work or not work as hard for $14 million?”
It isn’t an idle thought. The notion of top CEO pay is tied to the idea that corporations have to offer such bloated deals because of competition with other companies for those executive minds. But as EPI’s report notes, “They are not getting higher pay because they are becoming more productive or more skilled than other workers, or because of a shortage of excellent CEO candidates.” They’re getting paid more simply because they are.
What might turn that tide? Bivens says that, historically, companies whose workers are unionized tend to rein in the compensation of their executives, in part because those top pay figures often become publicly debated and criticized during labor negotiations. It’s also possible to tweak corporate governance in a way that encourages more direct voting by shareholders on things like CEO packages, diluting the sway of executive-friendly boards.
More broadly, the EPI recommends imposing higher marginal tax rates on the top earners, to “limit rent-seeking behavior and reduce the incentive for executives to push for such high pay.” Another option, the institute’s authors write, is to set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation.
“It’s one thing to have an incentive to attract great CEO candidates,” Bivens says. What we’re seeing now is runaway compensation of another order entirely — the kind that ought to make shareholders wonder about the value they’re really receiving.
Capital and Main October 21, 2022 -
In a video that went viral this week, Rep. Katie Porter (D-Calif.) cited an Economic Policy Institute analysis showing how larger corporate profits are behind 53% of the higher prices Americans are facing at gas pumps as well as when buying groceries and paying for other essentials.
Common Dreams October 21, 2022