Diverging average company pay—not what the CEO makes—explains most earnings inequality

A janitor sweeps in the lobby of a large office building


Pick a huge company out of a hat and it wouldn’t be surprising to find that the pay gap between the CEO and the average worker has been widening for decades.

But it’s actually average employee earnings across firms — not within them — that accounts for most of the rise in earnings inequality in the U.S. from 1981 to 2013, according to research in The Quarterly Journal of Economics.

READ SHARE DISCUSS LEARN more here – https://journalistsresource.org/studies/economics/firming-up-inequality/


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