The Mass Communications Site of Blue Valley Southwest

Students and staff discuss both the CEO-to-median-worker and gender wage gaps

It is the end of the month, payday, and as four o’clock rolls around, employees from every office begin to file down to the mailboxes to receive their paychecks. One hand reaches for the envelope and fingers begin to tear at the seam. The eyes, impatient to see this month’s numbers, are directed down, eagerly anticipating an increase. As the numbers become visible, shoulders shrug forward and eyes, now clouded and gray, look away from the check while the hands slowly shove it back into the envelope. Feet shuffle out the door, weighed down by the discouraged mind of the common worker. After hearing of their own CEO’s pay increase in the newspaper, the eyes had anticipated a small increase in their own salaries.

Portland passed a law on Dec. 7 that will go into effect this year, placing a tax penalty on companies with excessive CEO-worker pay gaps. Excessive, according to The New York Times website, meaning if the CEO of any company makes 100 times what median workers earn, an additional tax of 10 percent will be placed on the company. Furthermore, if the CEO makes 250 times what the median worker earns, an additional tax of 25 percent will be placed. Expected to generate $3.5 million in annual revenue for the city, the new law will affect upward of 500 companies, forcing them to take one of three routes: pay their lower income employees more, pay their CEOs less or pay the tax. In an interview with the Huffington Post, Sarah Anderson, co-editor of Inequality.org at the Institute of Policy Studies said that as Portland takes steps to reduce the CEO-to-median-worker wage gap, their tax could “spread like wildfire” to other cities across the nation.

According to payscale.com, on average, the CEO-to-worker pay ratio of 168 companies — including Nike, CVS, AT&T and Walt Disney — is 70:1, based solely on cash pay. This ratio does not factor in common stock option grants available to many CEOs, which gives the employee the right to purchase a certain number of shares of the company’s stock at a predetermined price, according to investopedia.com, and compensation which can quadruple their total pay.

Senior Sam Gettings said he agrees with the tax penalty Portland proposed, and that the taxed money should be distributed among the CEO’s employees. He also said more equal pay will help grow companies.

“If CEOs and employers want people to come work for them, they should show their employees they will be treated in a fair manner and will get paid a respectable amount for the job they’ll be doing,” Gettings said. “This greed, I believe, is part of our culture, though, as Americans. We work hard and never take a break and destroy whatever is in our path just to make money. CEOs need to pay their employees what they would want to be paid if they were in their position.”

English teacher Charles Golden said  while he does not have a problem with entrepreneurs having a larger salary, some CEOs make ridiculous amounts of money.

“I don’t really begrudge that entrepreneur who has built the business from the ground up because it is their thing,“ Golden said.

On Aug. 5, 2015, The Securities and Exchange Commission published a press release that went into effect on Jan. 1 of this year requiring public companies to disclose the ratio of the compensation of its CEO to the median compensation of its employees, hoping to pressure companies to improve their workers’ salaries. While Golden said he believes that some CEOs make ridiculous amounts, he also stated that leadership should cost money.

“There is no substitution in an organizational group for really, really good leadership, and really, really good leadership can and should cost money,” Golden said.

In 2015, the salary ratio of first year teachers with a bachelor’s degree and the superintendent of Blue Valley Schools was 16:1, according to kansasopengov.org. Golden said he does not find this gap begrudging.

“[Teacher salaries are] certainly not commensurate with the responsibilities and backgrounds and the kind of educational backgrounds that we have,” Golden said. “Do I think [the superintendent] should earn less? No. But do I think teachers should earn more? Yeah. Our district has a fabulous superintendent right now. I think he is worth every penny that he earns.”

Similar to Golden, technology teacher Perri LaTerza said she does not find the gap in salary from superintendent to teacher a major issue when referring to Blue Valley as a corporation.

“If you look at Blue Valley as a district corporation, it is a multi-million dollar company with thousands of employees, and they have to deal with the public,” LaTerza said.

LaTerza began teaching after around 15 years of programming with an information technology (IT) company. Intending to start a family, LaTerza chose to follow her high school-planned career and become a business and computer teacher, which she said resulted in an immediate 70 percent decrease in her salary.

“It took a lot of budgeting; I wasn’t used to budgeting for a gallon of milk,” LaTerza said.

After working at the IT company, LaTerza said she has seen a wage gap play a part in her life.

“I started out in programming and IT and for my first five to six years, I was the only woman in my department,” LaTerza said. “I was the lowest paid, mostly because I was the lowest man on the totem pole, because I was the newest one in, but, I don’t think my raises came as quickly or as incremental as the men in the companies that I worked for. Later on and now, I don’t see that, especially in teaching; teaching is more based on experience and education.”

According to news website fortune.com, seven in 10 employed adults in seven countries (United States, Canada, United Kingdom, France, Germany, The Netherlands and Switzerland) believe men and women are paid equally by their employer for equal work. As it has been found by fortune.com, the gap usually claims women make between 76 and 80 percent of what a man makes in a year. According to fortune.com, those who believe the wage gap doesn’t exist tend to think this number is explained through the career choices women make or things such a taking breaks to have children or choosing a career with more flexibility.

However, even after fortune.com factored for differences in education, experience, age, location, job title, industry and company the “adjusted” gender pay gap in the U.S. resulted in women making 94.6 cents per dollar compared to men. Based on the 2014 census that states the average woman’s salary was $39,621 a year, this pay gap would cause a $2,140 pay loss per year or a $64,200 pay loss over a 30-year career.

Golden said he agreed that differences in taking time off does affect the statistic.

“Part of it is explained by persisting difference in values in the work that men and women do, but part of it is explained by the fact that women still do stay home with their kids or take time out of their careers with kids, and I think that puts some on a perpetual path behind men in the workplace,” Golden said.

Coming from a different perspective, Gettings said he does not know much about the wage gap, but still agrees that women and men should be paid equally for equal work.

“I think the wage gap hurts women the most out of anyone,” Gettings said. “They’re doing the same jobs as men but still are making less money. This is definitely not fair as everyone is created equally and should be paid the same for the same job.”

Complementary of Gettings’ viewpoint, Golden said it is good business to make sure people can earn money so that they can do honest work and not have to have second jobs or “cut all the corners.”

“If we are a humane society, we should make sure that people are not suffering because of something that is beyond their control and that they are able to enjoy a reasonable quality of life,” Golden said. “Even if it is a meager one, it should be one where they wake up every day and it is possible for people that are making reasonably good choices to have good lives because of the way we set up our economy.”

Golden also said he does not believe that people are paid fairly for the amount of work they do or how hard they work.

“I know hard, hard working people who barely get by,” Golden said. “I think lots of people put a lot of effort and a lot of care into their work and I think people’s pay doesn’t reflect that, the effort, the thought, the compassion or anything; it reflects what the market thinks it is worth.”

Although Golden said he does think there is a short-term solution, he said investing heavily in education to ensure students leave school with a marketable education would be one step.

Golden and LaTerza said the wage gap is better than it used to be. Going forward, LaTerza said she thinks pay should be based on work and experience.

“I don’t think race, gender or age should come into play for any of the jobs,” LaTerza said. “It is all based on your ability and your experience. I think that is the number one thing you should look at — not what you look like, what color you are or if you are male or female.”

 

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