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

Photo (cc) by Rusty Clark

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.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Ways Your Phone Can Slash Grocery Costs
5 Ways Your Phone Can Slash Grocery Costs

These free apps and websites can help you get cash back on groceries, shop more efficiently or squeeze the most from the ingredients you have on hand.

3 Costly Social Security Mistakes That Women Make
3 Costly Social Security Mistakes That Women Make

Women face unique challenges when planning for retirement and making these mistakes can result in a skimpier retirement.

20 Great Part-Time Jobs for Retirees
20 Great Part-Time Jobs for Retirees

Maybe you’re not ready to leave the workplace entirely.

21 Thrift Store Gems You Can Cash In On
21 Thrift Store Gems You Can Cash In On

Here’s what to look for at that overstuffed thrift store — and how you can make money from it.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.