Clinton Misuses Stat on CEO Pay

Clinton Misuses Stat on CEO Pay

Her talking point: “the average CEO makes about 300 times what the average worker makes.”

The correct point: "the top CEOs make about 300 times what the average worker makes."

Or a correct point could be: "the average CEO makes about 4 or 5 times what the average worker makes."

(Her claim is actually based only on the top 350 CEOs, but there are actually more than 200,000 CEOs in the USA.)

Incidentally, the ratio of the top CEO compensation to the average worker's pay did skyrocket between 1965 and now, from 35:1 to 295:1, which tends to support the point she's really trying to make, which is that income inequality is increasing dramatically if one considers the big picture in the long term (well, at least by one measurement).

But the support she gets on that point gets undermined by the fact that the most dramatic increases in the ratio occurred when Mrs. Clinton's husband was in office. In the one 5-year period from 1995 to 2000, the ratio more than tripled - from 122:1 to 383:1. On the other hand, the ratio dropped from 383:1 all the way down to 193:1 during the Bush years, then has soared back up to 295:1 under Obama.

Now think about that for a bit. The ratio has increased from 35 to 295 in the last fifty years, a difference of 260, but it actually increased by 261 in the last five years of the Clinton administration, leaving all other periods with a net of minus one! Defying all the normal rules of math, Slick Willie is responsible for more than 100% of the increase!

If you were pro-Democrat, you could counter that point by arguing that top CEO wages soared under Clinton and Obama because they did a better job on the economy, and that the wage ratio tumbled 190 points under Bush only because of the massive 2008 economic crisis, which happened on his watch.

You see, when facts are considered objectively rather than culled selectively for talking points, the truth is always complicated. In terms of the "top CEO: average worker" ratio, one might even argue that the higher the better, because it correlates so strongly to the health of the economy. At least that's what Bill Clinton would have to argue if Hillary ever gets caught dealing with the inconvenient fact that her husband is the real culprit behind the CEO wage gap increase!