Media clips
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CEO pay skyrocketed 15.9% through the pandemic as the rallying stock market boosted compensation packages, the left-leaning Economic Policy Institute said in a Thursday blog post. That marks an acceleration from the 14% jump seen in 2019 despite COVID-19 roiling the global economy. EPI cited 281 filings from large firms in its preliminary report.
Conversely, annual compensation for the average American worker rose just 1.8% in 2020. The widening pay gap is captured in EPI’s CEO-to-worker compensation ratio, which rose to 307.3 last year from 276.2 among early reporting companies.
To be sure, CEO salaries broadly shrank through the year. The average salary for chief executives fell 5.2% as businesses paused pay hikes during the health crisis, according to EPI.
Yet a broader measure shows the stock market’s meteoric rise through 2020 more than made up for the slump. Realized direct compensation — which includes salary, bonuses, long-term incentive payouts, stock options, vested stock awards — rallied last year as stocks rebounded from their pandemic lows. Among the 281 early reporting firms analyzed, realized compensation rose to $21.4 billion from $18.5 billion throughout 2020.
Business Insider May 28, 2021 -
DENITSA TSEKOVA: Exactly, yes, we have JP Morgan, and we also have a similar analysis by the Economic Policy Institute saying that that move of all those states opting out of the program, it’s rather a political move and not an economic one. So currently, we have 24 states opting out of some or all federal unemployment programs. And all of these states have a Republican governor. But the economic conditions across those states are very different.
So looking at the JPMorgan analysis, they look at unemployment rates, earnings growth, and participation rates in those states. And they are very different in the different states. For example, some of the states opting out of the programs may have a very tight labor market and strong earnings growth, which may signal a potential for worker shortage and tie into that whole debate that there are not enough workers to hire.
But this is not the case for many of the other states are opting out of the program. For example, Texas, their unemployment rate in April was 6.7%, which is almost double its pre-pandemic level. So in states like Texas, the unemployment rate is a long way from recovering to pre-pandemic level. While in other states that are opting out of the program, the unemployment rate has pretty much recovered.
Yahoo Finance May 28, 2021 -
The math, again, is simple: Shortages have gone up because salaries have gone down. The Economic Policy Institute reported that teacher pay, adjusted for inflation, declined from 1996 to 2017.
Teacher deficits and departures hurt students because inexperienced educators often fill the vacancies. But even when children have skilled, veteran instructors, the quality of their education is compromised if these teachers are underpaid.
The New York Times May 28, 2021 -
Vox’s Emily Stewart talks with Janelle Jones, chief economist at the Labor Department, about what’s actually going on with the US economy — and who are the workers most dramatically affected by the pandemic. They discuss the tasks ahead in an economic recovery, who should receive the most help, and how to put policies in place that do more than just return to the status quo.
Host: Emily Stewart (@EmilyStewartM), Senior Reporter, Vox
Guest: Janelle Jones (@janellecj), Chief Economist, Department of Labor
References:
- “U.S. Labor Shortage? Unlikely. Here’s Why” by Heidi Shierholz (May 4, The Commons blog, Initiative for Public Discourse)
- “Lumber mania is sweeping North America” by Emily Stewart (May 3, Vox)
- “Black workers have made no progress in closing earning gaps with white men since 2000” by Elise Gould, Janelle Jones, and Zane Mokhiber (Sept. 12, 2018, Working Economics Blog)
- “The U.S. economy could use some ‘overheating’” by Josh Bivens (Jan. 14, Working Economics Blog)
Vox Conversations May 28, 2021 -
Here’s what you need to know about the disappointing development, including which governors are cutting off unemployed workers in their states from these benefits, what programs are affected, and why, according to a new analysis from the Economic Policy Institute, cutting unemployment benefits is more about cruelty than problem-solving.
Fatherly May 28, 2021 -
CEO pay grew at what might have been the fastest pace in history last year during the pandemic, widening the pay gap even more between top executives and their workers.
Compensation for chief executive officers increased by 15.9% in 2020, while workers’ wages rose by just 1.8% for the same period, according to an Economic Policy Institute analysis of early filings from 281 large firms.
The average realized compensation for chief execs — which includes salary, bonus, long-term incentive payouts, exercised stock options, and vested stock awards — increased by $2.9 million, reaching $21.4 million last year.
“It was spectacular growth, fueled by the rise of the stock market and cashing in stock options,” Lawrence Mishel, EPI distinguished fellow and co-author of the report, told Yahoo Money. “We may be hitting historic highs in 2020.”
Yahoo Finance May 28, 2021 -
While CEOs have always made more than rank-and-file workers, the ratio has ballooned in recent decades — and wages for top executives have increased dramatically faster than average workers’ pay. The Economic Policy Institute found CEO compensation had surged 940% from 1978 to 2018 while the typical worker pay had risen only 12% over the same timeframe.
CBS News May 28, 2021 -
In 2018, former President Donald Trump used Section 232 of the Trade Expansion Act of 1962 to impose tariffs on steel and aluminum of 25% and 10%, respectively, citing national security concerns. The administration sought to boost domestic industry and bring capacity utilization rates up to around 80% (considered a barometer of industry health).
With respect to aluminum, the Economic Policy Institute (EPI), in a white paper released this week, argues for the success of the Section 232 aluminum duty.
Metal Miner May 28, 2021 -
The US’ 10% tariff on aluminum imports from most countries accomplished its stated purpose of protecting the at-risk domestic aluminum industry in the interest of national security, market analysts and participants said May 26 after the release of a report from the Economic Policy Institute.
EPI Senior Economist Robert Scott said the tariff, imposed by former President Donald Trump under Section 232 in 2018, came at a time when the US primary aluminum industry was “hanging on by a thread.”
“The industry was threatened with collapse, and the US had the only existing high-quality, high-purity aluminum smelter that was running in the NATO countries,” Scott said in a virtual panel discussing the EPI’s May 25 report on the tariff’s impact.
“This was critical for national defense that we not lose this capacity as well as maintain the capacity to produce our own aluminum for the supply chains, and I think the COVID-19 crisis has shown just how important it is to be self-sufficient in these primary commodities.”
The EPI report concluded that the aluminum tariffs succeeded in fulfilling their intended effect and have allowed aluminum manufacturers throughout the supply chain to thrive.
S&P Global May 28, 2021 -
“Absolutely, we’re still in a crisis,” Elise Gould said.
Elise Gould is a senior economist with the Economic Policy Institute, a non-partisan Think Tank in DC.
“9 to 11 million more people don’t have a job that would’ve had a job. We’re on a very different trajectory,” Gould said. “That means, they do not have wages to be paying their bill. They do not have income. Many people are struggling –it’s very difficult for many people out there today.”
WSMV News 4 May 28, 2021