In 2017, ordinary workers became no more valuable to our society than they were the year before. Normally, eight years into an expansion — with unemployment nearing record lows — one would expect to see America’s laborers enjoying hefty wage growth. But despite these favorable conditions, our nation’s working stiffs failed to make themselves more useful to their fellow citizens last year. Thus, the market — the impartial, infallible indicator of a person’s objective worth — declined to provide ordinary Americans with bigger paychecks.
Fortunately for all of us, America’s elite CEOs decided to pick up the slack. In 2017, the chief executives of the 350 largest U.S. economies contributed a whopping 17.6 percent more to our collective well-being than they did in 2016 — and thus, collected an average raise of $3.3 million, according to a new report from the Economic Policy Institute. Thanks to their heroic efforts, the typical elite CEO in the U.S. now deserves 312 times as much of our collective appreciation as his (or, rarely, her) typical employee.
Last year, our nation’s beautiful bosses increased their value to us all primarily by ensuring that their companies’ shares increased in value. Executive pay in the United States is typically tied to stock performance (so as to ensure that CEOs earn exactly what they objectively deserve). And in 2017, the S&P 500 increased by an amazing 14.5 percent.
One could try to diminish our courageous corporate overlords’ achievement by attributing the S&P’s rise to Donald Trump’s election: With a Republican president in the White House, American firms’ tax bills were bound to decline along with their regulatory costs — thereby increasing their expected future profits, and thus, the value of their shares.
But this assessment unjustly ignores the role that America’s majestic, top-level managers played in getting Trump elected, and accommodating his regime once it took power. After all, the Republican Party doesn’t fund itself. And given the GOP’s accelerating march towards extremism during the Obama era, it would have been easy for America’s sensible, centrist CEOs to cease donating to a revanchist political formation. Taking a public stand against the Republican Party’s embrace of voter disenfranchisement, birtherism, and debt-ceiling shenanigans might have earned such CEOs some good PR.
Nevertheless, they persisted in bankrolling Paul Ryan’s cause — because they knew that some things are more important than politics. Things like maximizing shareholder value (i.e. the only accurate measure of how much good a business is doing for the world). Similarly, after Trump was elected, the titans of American industry could have collected plenty of retweets from the Resistance by denouncing his proto-fascist administration. Instead, many selflessly joined his jobs council and offered their support to his tax reform law.
But even if America’s CEOs hadn’t bravely abetted the xenophobic right’s rise, they would still deserve every penny of their raises. Plenty of other countries have cut taxes and regulations in recent years. But none of their CEOs created anywhere near as much value as America’s. The U.K.’s top bosses make only 94 times what the average British worker makes; in France, that figure is 71; in Sweden, it’s a pathetic 40.
America’s CEOs weren’t always so exceptionally valuable. In 1965, they earned only about 20 times what the median worker did. It took grit, guts, and decades of lobbying for our nation’s fabulous fat cats to break the labor movement, slash capital gains tax rates, and build a structure of corporate governance that rewards the pursuit of short-term market value (the only objective measure of metaphysical virtue) over all other considerations.
Without those efforts, the American economy would still be unjustly rewarding interchangeable proles for their nigh-valueless labor with regular wage increases — instead of fully compensating the demigods of Davos for the gifts they’ve bestowed upon all humanity.
