Fast-Food CEOs Paid 1,000 Times More Than Their Workers

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If you want a glimpse of super-sized pay inequality, look no further than America’s fast-food industry.

Nowhere is company-level pay disparity more apparent than in fast food, where CEOs reportedly take home $1,000 for every $1 earned by their typical employee.

Fast Food Failure,” a new report by public policy group Demos, highlights the growing chasm between CEOs and their lower-rung workers. According to The Huffington Post:

“It’s true in many industries but fast food is the primary example: The gains from economic growth are being entirely awarded to people at the top of the income scale,” Catherine Ruetschlin, author of the report, told HuffPost. “It’s not a surprising finding that it’s the worst industry within the worst sector, because that’s where we’re seeing the cracks forming.”

It’s expected that CEOs make more than their rank-and-file employees, but a 1,000-to-1 pay ratio is excessive, to say the least. On average, fast-food CEO compensation has quadrupled since 2000, with averages coming in about $23.8 million. Front-line workers have hardly fared as well, the report said:

After the Great Recession ended in 2009, CEOs captured the tide of economic growth with impressive rapidity. Executive pay recovered and outstripped previous levels within a single year.

Workers, though, were left out of these gains. Since 2000, the average fast-food worker has seen her total compensation climb by just 0.3 percent in real terms, and in 2013 was still making less money than before the recession. As a result of the trends for both components of the CEO-to-worker ratio, fast food stands out for its extreme imbalance in compensation practices.

Earlier this week, we told you about a new study that found that CEOs at the 20 largest members of the National Restaurant Association took home more than $662 million in tax-deductible compensation over the last two years. The companies then took advantage of a tax loophole that allowed them to reduce their tax bills by about $232 million.

The Demos report points out that the extreme income disparity it found is risky business for fast-food companies. According to Commondreams.org:

“The negative consequences are surfacing as operational issues, legal challenges, and diminishing worker and customer satisfaction,” said Catherine Ruetschlin, Demos policy analyst and author of the report.

“Even the industry leader McDonald’s has acknowledged that rising inequality is a risk to their bottom line. These performance issues can manifest in reduced shareholder returns, but the problems extend beyond fast food to the rest of the economy.”

Perhaps even more troubling is the report’s finding that low-paying jobs, like those in the fast-food industry, make up a big chunk of the job growth since the Great Recession. And looking into the future, low-paying, fast-food-like work will likely be among the top five occupations expected to add the most jobs through 2022. The implications for the overall economy are huge, the report said.

The increasing reliance on employment in these highly unequal industries will make it harder for working people to share in the gains of economic growth as more and more income becomes concentrated at the top.

I don’t know about you, but this kind of thing really gets my blood boiling. It’s intolerable to think that CEOs are OK with taking home multimillion-dollar pay packages, while paying their employees the bare minimum.

What do you think about the pay disparity between fast-food workers and their exorbitantly compensated CEOs? Please share your thoughts below or on our Facebook page.

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Comments & discussion

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  • Nancy

    These executives and the directors on the board have no souls, no ethical center. And no view of community good–that’s the problem with globalization. I have already ceased buying from fast food companies. Unfortunately, a boycott will have a lot collateral damage, heaping more hurt on the low-wage workers. Still, I can’t bear to line the pockets of these modern day robber barons. I can’t afford to fight every battle, and I am just one person, but this is how I vote with my dollars.

    • bigpinch

      I can’t entirely agree with your assessment of the situation but I applaud your willingness to personally engage with what you see as the problem. It beats being obsessed with TV entertainment and just whining about issues you don’t understand as are so many of the poster to this on-line forum. Good for you. Keep reading. Keep thinking, keep writing.

  • Frances King Matchett

    AND THEY CLAIM THAT INCREASING THE MINIMUM WAGE WILL HURT THE WORKERS, BECAUSE OF LAY-OFFS AND REDUCED WORK HOURS, THEY WILL DO LAY-OFFS, SO AS NOT TO HURT THEIR BOTTOM LINE, AND TO KEEP SHAREHOLDERS LINING THEIR POCKETS.

    • Kent

      Raising the minimum wage can hurt the marginally employable. I think what we really need is a maximum wage. You are you leading a company of tens of thousands of employees, there has to be more equality. If it was working, you would see the leaders lifting their employees, not oppressing them and the leaders are profiting from the oppression. At least in the short run.

      • bigpinch

        In the long run we’re all dead.

  • Frances King Matchett

    THIS IS SO DEPRESSING !!!!!!!!!!!!!!!!!!!

  • Jack Mabry

    If this keeps going, this country is headed for one of two things, either a massive increase in unionization, or a revolution. Let’s hope it’s the former.

  • bigpinch

    And the socialist politicians who foment dissatisfaction, class-envy, and social unrest make at least a thousand times more than the morons who vote for them and who think that, somehow, if the rich and successful get punished by the government their lives will magically be made better.
    There is an old Russian story about a peasant who is approached by God. God tells the peasant that he has seen his poverty and suffering and will grant him whatever wish he makes just so long as his rich neighbor gets twice as much. The peasant ponders this for a moment and says to God, “O.K., make me blind in one eye.”

    • Kent

      Today’s inequality goes way beyond class envy. It’s just not possible for these greedy, gravy sucking pigs to be worth as much as they are being paid. You know it, they know it and some of them do actually feel guilty about it. Maybe you are just really bad at math if you think it is justified.

      • bigpinch

        I’m not saying that it is “justified.” “Justified” is a weird concept to consider in the circumstance. Is the sun “justified” in rising up in the morning? Are the birds “justified” in building their nests? Are you “justified” in demanding that Fast Food CEO’s give you their money? And how come if they want more money it is called greed and when you want more money it is “justified?”
        Maybe you just don’t have any worthwhile sense of history or of your own moral relativism.

  • bkp100

    What an INCREDIBLY dumbass comparison this article makes.
    How much does a cameraman get paid compared to $20M per movie actors????
    How much does an intern make compared to a Senator???
    How much does an orderly make compared to a surgeon???

    Are you so fabulously dim, and so steeped in political correctness, as to not understand the reasons for that?

    Where’s the discussion on how much personal RISK the CEO’s put into the business they started? Or how many 20 hour days? How many sleepless nights can the workers claim worrying about meeting payroll; about balancing receivables and payables; about labor issues; about regulatory and health issues; about insurance issues???? How much negotiation with contractors; with vendors; with transporters did the workers undertake???
    I am SO tired of hearing about ONE side of the inequality equation by hacks like this, when the equation is SO stacked by the inequality crusaders as to make it laughable…

    • Kent

      Angry? Today’s CEO’s are typically not the founder. They are on the same team as the front line workers and simply do not, could not and never will be worth as much in two hours as anybody is in an entire year. Anybody that thinks that much differential is feasible is delusional.

      • bkp100

        And who exactly has the qualifications to set the bar at whom should earn what, as opposed to having it based on the what the market will bear? You?? Thomas Piketty?
        Fast food workers earn what they earn because there are millions of others than can step right into the job with no effort, minimum training, and literally no education… Not the case with successful CEOs. They negotiate what they can, and if the main investors, and the Board, think they are worth the value, and will yield at least that in returns, they pay the man (or woman). It’s called letting the market seek its own level. It’s why Zuckerberg, Spielberg, Ellison, and Gates can earn AS WELL AS CREATE billions in wealth. For those that fail, or worse, are found to be less than ethical, like Richard Fuld, or Kenneth Lay, they’re ultimately fired, or end up in prison… That’s the system.
        When you artificially inflate and reward, you end up with huge abuses and collapse (see: Detroit), or worse a socialized hypocrisy of a republic where accountability and merit are obsolete concepts, and productivity is driven below sea level due to lack of incentive (see: USSR). We’re not there, but certainly on the way, given this administration’s penchant to wage gender, race, and income wars in the name of political expediency…

  • Kent

    This is an excellent article and points out the obscene greed of America’s corporations. The inequality goes beyond the robber barons of yesteryear. How can a CEO, in the same business, doing the job he was hired to do, striving for the same goals possibly be worth as much in two hours as other team members who are very likely working even harder than the CEO, are worth in a whole year. Seriously, you have either, already made up your mind and cannot face the evidence, are really bad at math, or maybe honestly believe that whatever you get in this world is what you deserve. Not possible and the evidence does not support it that belief. We are all being tested, just not when and how we might like to be tested.