The Pay Problem: It's not that we pay CEOs too much—it's that we pay everyone else too little.

  • Publication Date:
    January 2013
  • Report Number:
    TCBR106

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Compensation consultant Don Delves argues that CEO pay is under control and that companies should turn their attention to how they pay everyone else, partly because compensation is underutilized as a motivational tool and partly because societal inequality hurts the overall economy. In real terms, the typical American worker’s pay has increased either very little or not at all over the past thirty to forty years; the bottom 80 percent of the U.S. population has basically not participated in the growth
of the economy for a very long time. Their standard of living may have increased due to technology and dual-income households, but their wages have not. Delves' fear is that business has lost the hearts and minds of much of America’s workforce. The core engine of our economy is unengaged or, at least, underengaged. The workforce that
was once the world’s best is no longer. If this is true, it explains at least part of our persistent economic challenges. It also raises serious questions about most people’s ability to save, to invest, and to retire.

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