Widening wage gap between CEOs and workers is a business and ethical issue

The CEO-worker pay gap at low-wage corporations in the United States is widening, according to a new report by the Institute for Policy Studies. The average CEO is making $670 to every $1 of the median US worker, up from $604-to-$1 in 2020.

If you are looking for an expert to speak specifically on this issue, please consider James R. Bailey, a professor of leadership development at the George Washington University School of Business. His areas of expertise include employee motivation, competence, satisfaction, and performance, as well as managerial decision making, and business ethics.

“Our first reaction to the fact that executives make $670 to $1 for the average worker should spark indignation. The difference in wage for executives versus workers has increased by 500% in the last 20 years,” Professor Bailey says.

Professor Bailey calls the rising pay gap between CEOs and workers both a business and an ethical issue.

“Businesses are mostly rational actors that pay what they need to, to find the right talent.  On the other hand, the US differential exceeds other sophisticated economies by far,” Professor Bailey says. “Why in Europe and other economically evolved economies, is this differential so much less? In Switzerland -- one of the richest countries in the world -- the difference is $150 to $1. Our salary gap between executives and workers isn't in sync with the rest of the world.”

“Ethically, then, boards of directors--who approve salaries--need to do what they're appointed to do; advance the interests of stakeholders. It's hard to blame a CEO for accepting a $6M contract. The board approved that package.  These fancy compensation packages are the fault of boards, not CEOs.” 

Professor Bailey can also speak more on solutions and how the imbalance in CEO/worker pay can be addressed.