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.

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