AFL-CIO Secretary-Treasurer Liz Shuler delivered the following remarks on a press call announcing the 2021 Executive Paywatch.
Hello everyone, thank you for joining us for the launch of this year’s AFL-CIO Executive Paywatch website.
We’ve been doing this now for many years, and it keeps getting better and really highlights the disparities we in the labor movement talk about day in and day out. I want to thank Brandon Rees, the AFL-CIO’s Deputy Director of Corporations and Capital Markets for his hard work in bringing this important project to life.
The headline is: In 2020, on average, CEOs of S&P 500 companies were given a big raise.
They received $15.5 million in total compensation.
Compared to 2019, that’s a pay increase of more than $700,000, during the worst public health crisis in a century.
And the only reason we’re reaching the other side of the COVID-19 pandemic is because working people stepped up.
Our first responders, county and municipal workers, food and retail—think about the sacrifices—transportation workers, construction, manufacturing, communication workers. Educators. Nurses and health care workers. Postal workers and Letter carriers. And so many more. I could go on.
We hear so many business leaders calling those workers “essential” and “heroes.”
But words are not enough. We’ve always been essential, doing the critical work to make this country hum.
And what every worker deserves is family-sustaining wages a free and clear path to stand together with our co-workers in unions. Because unions are the best way to improve working conditions, increase wages, win safety protection, fight discrimination and guarantee equal pay.
That’s why we need the PRO Act. It would fix our labor laws, remove barriers like the fear of getting fired that workers face when they try to stand together with coworkers in a union.
The PRO Act is how we can reclaim our bargaining rights on a level playing field.
Some companies furloughed working people, then tried to make a big deal about cutting CEO’s base salaries.
But in reality, CEOs enjoyed big increases in their equity compensation. While CEO base salaries decreased slightly, the average S&P 500 company CEO’s stock-based pay increased by over $1 million. And that doesn’t even factor in the dramatic rise in the stock market we saw in the second half of the year.
Many of these CEO’s stock grants were made when the stock market bottomed out in March 2020, meaning these shares are now worth even more today. And as the Institute for Policy Studies recently pointed out, dozens of S&P 500 companies actually increased their CEO’s pay. Some companies gave “retention” awards to their CEOs as their stock prices fell, while others changed their CEO’s incentive metrics to make up for the impact of COVID-19.
On average, in 2020 at S&P 500 companies, CEO pay increased by 5 percent while the disclosed median employee’s pay at those same companies only increased by 1 percent.
As a result, from 2019 to 2020, the average CEO-to-worker pay ratio of S&P 500 companies increased:
In 2019, it was 264-to-1.
In 2020, it was 299-to-1.
That’s what we mean when we say inequality is skyrocketing.
While CEO pay was growing, working people were risking their lives and livelihoods.
We also faced extreme unemployment rates—they peaked in April 2020—at 14.7 percent with a record 41 million U.S. layoffs. While many jobs have returned, there was a net loss of 9 million jobs in 2020.
The pandemic economically devastated those who were already hurting the most. It pushed millions of women, predominantly Black and Latina women out of the workforce.
Without the support provided by increased federal unemployment benefits and economic stimulus we would have faced a second Great Depression.
That’s why the labor movement fought hard for the passage of President Biden’s American Rescue Plan to bring relief to all working families. It includes the Child Tax Credit—one of the greatest lifelines working families have to help make ends meet. That piece of relief will start reaching families as of tomorrow.
And what we need next is the PRO Act.
That’s crystal clear in this year’s Paywatch, which shines a spotlight on the difference between companies in so-called “right to work” states versus those in union security states.
“Right to work” laws take away workers’ rights. They undermine our freedom to come together in unions. They were first adopted in the 1940s, part of an effort to maintain Jim Crow in the South. Segregationists wanted to keep unions from organizing Black and white workers together. It’s a racist, systematic effort to divide us, to deny us our power. Because they know that our strength is our solidarity.
In every single state, the PRO Act would end divisive right to work laws. A company’s headquarters might not be in the same state where the majority of its workforce is located. But it’s clear, right-to-work has a disturbing effect.
The average CEO-to-worker pay ratio of Russell 3000 companies that are headquartered in “right to work” states is 173-to-1.Compared to union security states, it’s 133-to-1.
The median worker’s pay of the average Russell 3000 company headquartered in a “right to work” state was 22 percent lower compared to companies headquartered in union security states.
No wonder these laws are often called the “right to work for less!”
These numbers illustrate why passing the PRO Act is so urgent.
The PRO Act will remove barriers to organizing, hold companies accountable for violating workers’ rights, and repeal “right to work” laws that lead to lower wages for working people and their families.
The CEO-to-worker pay ratio data also show dramatic differences between industries. The highest pay ratios are in the consumer discretionary sector of the economy, that includes many retail companies with low paid workers. The average consumer discretionary company in the S&P 500 Index had a pay ratio of 741-to-1 in 2020.
Look at Amazon, the company that fought hard to prevent a predominantly Black workforce in Bessemer, Alabama from unionizing. Amazon’s new CEO as of this month is Andrew Jassy. He received $35.8 million in total compensation in 2020, or 1,234 times that of Amazon’s median worker who made only $29,007 in 2020.
In contrast, CEO-to-worker pay ratios are the lowest in the utilities sector. The average utility company in the S&P 500 index had a CEO-to-worker pay ratio of just 97-to-1 in 2020. It’s no coincidence that, according to the Bureau of Labor statistics, 20 percent of utility workers are members of unions.
I'm a second generation IBEW. I came out of the utility sector. My father was a power lineman at Portland General Electric and my mother worked there as well. I personally know the union difference.
I think people in our country really see the difference a union makes coming out of this pandemic. They see that having a union means health care benefits. Retirement Security. Safety protection. Paid sick leave—in a crisis like the pandemic—and now in record heat waves. Those protections can be life-saving.
Every worker should have the right to form a union. And good union jobs must be the rule, not the exception,
And passing the PRO Act is the single best way to reverse economic inequality and raise wages for all working people. It’s how we balance the scales before they break. That’s why we are asking all those who are concerned about runaway CEO pay to contact their Senator and urge passage of the PRO Act.
I’ll turn it over to Brandon who will walk us through the rest of this year’s Executive Paywatch website.