| Capitalism is powered by money and greed. At it's heart, the point is to maximise profit and efficiency. This drives innovation and growth across the world... this is no bad thing. However, as a side of effect of this, it also means businesses want to become more efficient, reduce costs and maximise profitability - your share holders are expecting good returns and that's just the way the world works! However, according to this http://www.epi.org/publication/ceo-ratio-average-worker/ The CEO is currently getting around 241 times the average salary! Let's say the CEO takes $9.6 million and the average worker gets $40,000... This income divide is causing the problem, as the prices will move up in line with the wealth the CEO has just got (along with the workers obviously), but to the average worker, they're not really being paid much more (or any more at all) to counter act the inflation. If you go back to that graph in 1980 where the CEO only made 35 times the amount of the average worker and redistributed more of the profit to the employees, let's say average employee now gets $55,000 and the CEO gets $2,000,000 then the prices remain more affordable relative to the money in the market and the wealth has been distributed more evenly. Note this is with the assumption the corporation still made the same profit whichever way it was divided. The top 1% of wealth is greater than the other 80% of wealth combined in the USA and it's this greed that is causing the divide, rise in prices and rise in poverty line compared to the 'average salary'. |
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