A new study finds that across the globe, the disparity between what CEOs are paid and what their average workers make is much greater than people would like it to be.
Harvard Business School professor Michael Norton and Sorapop Kiatpongsan of Chulalongkorn University in Thailand surveyed people in 40 countries to find out what they thought CEOs and unskilled workers should be paid and what they thought those two groups actually make.
What the two professors found was that across the board, regardless of nationality, education level, or socioeconomic status, people felt that the ratio of CEO to worker pay was significantly higher than it should be.
The survey found that globally, people estimated that CEOs made 10 times as much as the average unskilled worker, while they wished chief executives would make just 4.6 times as much workers.
Of course, in every one of the 16 countries where the professors were able to get data about the actual ratio of CEO to worker pay, the reality of the situation was far more unequal than what people had imagined.
The survey found that Americans felt CEOs were entitled to make seven times as much as unskilled workers, an above-average piece of the pie compared with respondents in other countries — and they imagined that CEOs actually make 30 times more.
The reality? The professors cited an analysis by the AFL-CIO labour union saying that the average CEO makes 354 times more money than the average employee. In Germany, the nation with the second biggest CEO-to-worker ratio of the 16 countries accounted for, CEOs make a comparatively reasonable 147 times more money than workers.
Looking at the data, the Harvard Business Review shows that the disparity between the actual ratio and the ideal was most pronounced in the United States, where it was more than 50 times as large as those surveyed said they would it to be.
The survey found that people with more advanced educational backgrounds and greater socioeconomic status thought the pay gap between CEOs and unskilled workers was greater than those with less education and lesser socioeconomic status.
But while wealthier people were also more likely to approve of a higher ratio, even those who described themselves as being in the top 20% of the richest people in their country thought CEOs should only make five times more money than workers.
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