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Politics and Economy:
Executive Pay
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Some observers thought that the spate of corporate scandals in recent years would reverse trends in executive pay, or at least put a cap on pay packages. Yet in spite all the bad press and shareholder outrage, executive pay keeps on rising. The equation of executive packages looks different these days — with more money in cash payments and less in stock options. However, on March 21, 2004, THE FINANCIAL TIMES reported that yearly bonus payments are heading back to the high levels seen in the boom of the late 1990s. According to THE ECONOMIST, In 2004 America's top 2000 chief executives enjoyed pay rises of around 30% and earned an average of $5.7 million.

How Much Does the Big Boss Make?      

Turns out that American executive compensation rates are quite different from those of the rest of the developed world. In Japan a typical executive makes eleven times what a typical worker brings home; in Britain, 22 times. In America...

According to recent studies, the top one percent — the wealthiest among us — are getting richer and richer. The Organisation for Economic Cooperation and Development (OCED) has found the United States to be the most unequal society of all industrialized nations. The U.S. ranks last among OECD nations in terms of income equality, yet in 1993 the poorest 10% of the U.S. population was still wealthier than two-thirds of the rest of the world.

In its recent report "The State of Working America 2002-03," the Economic Policy Institute estimated that the bottom 80 percent of American households control only about 17 percent of the nation's wealth. Meanwhile, wages, benefits, and working conditions for workers at the bottom continue to decrease. Worldwide, the story is the same. A 2002 study by the World Bank found inequality growing not only between nations, but within nations.

Sources: FINANCIAL TIMES; THE ECONOMIST; THE WORLD BANK; "The State of Working America 2002-03, The Economic Policy Institute

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