by Brian K. White
Unemployment took a turn for the better, with 216,000 new jobs added to payroll last month. And while USA Today reported that 2010 saw median incomes rise 2.1%, it also reported that median CEO pay jumped 27% for the same period.
To summarize today versus last year:
- If you didn’t have a job, there’s a 12% chance you found one, based on the reduction in unemployment rate from 10% to 8.8%.
- If you did have a job, your income went up about 2%
- If you are a CEO, your income went up an average of $1.9 million.
If you’ve found a job, congratulations. That is an important step towards your personal financial recovery, though it may not mean much compared with the extra $913 per hour CEOs earned (based on $1.9 million divided by 40 hours per week for 52 weeks)…in addition to the $3,413 per hour they were already earning in 2009.
It was vehemently argued that if the Bush tax cuts were left to expire, it would harm American capitalists, and thereby American capitalism. While it’s impossible to know what would have happened, let’s get down to the, ah…brass tax?
According to CNN Money, these tax cuts save the highest earners 4.6% on marginal income. Rather than boil it all the way down, let’s just say it’s a flat 4.6% (even though this is an overly generous measure, and it figures out to less than that.)
If a CEO in 2009 earned $7.1 million and paid 35%, he netted $4.6 million.
Had the same CEO in 2010 earned $9 million and paid 39.5%, he still would have netted $5.4 million.
That’s an increase in personal income of $821,000, assuming these rates of tax are actually paid; effective rates are lower. In any case, the average CEO, thanks to the extension of the Bush tax cuts, saved $87,400 in federal income tax liability for 2010.
In a time of severe budget deficits, conventional wisdom would say that such deep cuts in taxes would create serious problems in the future, assuming God lets us get that far. But maybe we should stick to common sense instead.
When we talked about the attacks on the salaries of the NPR, PBS and CPB CEOs, we didn’t hear anything from the GOP about any of the other American CEOs and their pay. We didn’t hear about the inequality of the $30 million earned by Thomas Montag at Bank of America, the $34.7 million earned by Steve Burke at the new Comcast/NBC conglomorate, or the $26.5 million paid to Alan Mulally at Ford. Nor did we hear any calls to cut the salaries of NCAA coaches, who average $1.4 million in salary each.
Nor did we hear a word about it from crusader for fiscal responsibility Rush Limbaugh. Then again, with his $50 million contract, he’s saving $2.3 million a year thanks to these tax cuts. Considering he only works 15 hours a week, that savings in unpaid taxes figures out to $2,948 per hour. That’s not his income per hour, that’s 4.6% of his income per hour.
So again, congratulations on your 12% odds of leaving the ranks of the unemployed, and your 2% raise if you already had a job. But most of all, congrats to the CEOs on your 27% raise, and the tens, if not hundreds of thousands in taxes you didn’t pay.
Seems pretty fair, right?
Brian K. White, known to 538 Refugees as 10kZebra, is a Seattle native who has worked for nine years as the editor of Glossy News, a humourous and satirical take on the news. He is a voracious consumer of news himself and splits his time between raising his clever kids and trying to find the elusive unicorn that is the honest politician.
- “CEO Pay Grew 27% In 2010, But Republicans Still Refuse To Consider A Millionaires Tax” and related posts (wonkroom.thinkprogress.org)
- CEO pay soars while workers’ pay stalls (usatoday.com)
- Ford CEO Alan Mulally gets $26.5M pay package (seattletimes.nwsource.com)
- Goldman CEO 2010 pay package rises to $14.1M (seattletimes.nwsource.com)
- Good News for the Big Guys (The Rachel Maddow Show)