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MAKING AMERICA WORK: ALFRED P. MURRAH PROFESSORSHIP INAUGURAL LECTURE* - page 7 / 20

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2006]

MAKING AMERICA WORK

59

431 times as much as the average production worker. With just 260 days of work a year, that means that a typical chief executive officer earns more in one day than the average worker earns in a whole year.

Of course, CEOs are by no means the only American workers who earn extraordinary compensation. Many movie stars and athletes have seven- or even eight-digit incomes. In 2005, for example, actress Reese Witherspoon made $30 million, and baseball player Alex Rodriguez made $25 million.

All in all, most full-time, year-round workers have relatively modest annual earnings, but a few workers earn so much that they fall off the chart.8 We live in what Robert Frank and Philip Cook have called a “winner-take-all society” in which the top workers in each field of endeavor earn ridiculously large rewards for their efforts.9

Worse still, earnings inequality has been increasing for decades.10 For example, from 1979 to 2003, the real wages of top earners — those in the ninety-fifth percentile — increased by more than 30%. On the other hand, workers in the middle saw their wages increase by just 10%, and workers at the bottom saw an increase of less than 1%.

    • 8.

      See infra fig.3.

    • 9.

      See generally ROBERT H. FRANK & PHILIP J. COOK, THE WINNER-TAKE ALL SOCIETY

  • (1995)

    .

    • 10.

      See infra fig.4.

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