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Big Pay Gaps Are Bad for Business


Big Pay Gaps Are Bad for Business

Sarah Anderson

Mattel is one of the largest toy-making companies on earth. Turns out it’s one of the biggest manufacturers of income inequality, too.

Last year, the Barbie doll manufacturer paid its CEO nearly 5,000 times as much as its median worker.

This stunning revelation is the result of a new regulation that requires U.S. publicly held corporations to report their CEO-worker pay ratios to the Securities and Exchange Commission.


Another consideration, in addition to declining productivity, is the declining ability of employees to purchase goods and services. Even the arch-capitalist (and out-and-proud Nazi sympathizer) Henry Ford had sense enough to pay his workers enough so that they could buy the cars they produced for him.


“Would you do your best work for a CEO who pulls in 5,000 times your own salary?”

No, because there are always some big tip-offs (such as low pay, tyrannical bosses, incompetent management in general, etc.) when that is the case.


I love that this “report” compares CEO salary (including bonus, stock options etc) to part time employee salary. Even at minimum wage ($7.25/hr), the median employee at Mattel is working just under 17 hours a week ($6,271 annual salary). Thus the 4987:1 ratio.