A powerful labor union’s new report slams the pay gap between CEOs and rank-and-file workers, but critics say it conveniently ignores the sky-high salaries union bosses pull down.
The AFL-CIO’s annual Executive Paywatch report, unveiled this week, found that last year the average S&P 500 CEO earned a total of $13.1 million in compensation, while the average U.S. worker made only $37,632, a pay ratio of 347:1. But not included in any of the figures are the total compensations of nearly 192 union presidents who earned more than the average executive’s income.
“By attacking business leaders with cherry-picked data, labor leaders are glossing over their own startling pay discrepancies,” Luka Ladan, spokesman for Center for Union Facts, told Fox News. “The AFL-CIO and its affiliated unions would be better off figuring out how to effectively serve their disgruntled members than scoring cheap PR points.”
Officials for the AFL-CIO did not immediately respond to requests for comment.
An audit of past Paywatch reports by the American Enterprise Institute found that the AFL-CIO’s conclusion of the disparaging CEO-to-worker pay ratio is faulty and misleading, saying that the actual average U.S. chief executive earns $194,350.
“[T]he AFL-CIO reported an average CEO pay (total compensation) of $11.7 million for 2013 based on ‘available data from 350 companies,’” reads a 2015 analysis by AEI Scholar Mark J. Perry. “This year, the AFL-CIO fails to mention the exact number of companies it is using to determine that average CEO compensation in 2014 was $13.5 million.”
“BLS (Bureau of Labor Statistics) data show that there are actually 246,240 ‘chief executives’ in the US, who earned an average annual salary of $180,700 in 2014.”
Some of the AFL-CIO executives and their salaries that were omitted from this year’s Paywatch report were:
• Timothy Canoll of the Air Line Pilots Association: $775,829
• Newton B. Jones of the International Brotherhood of Boilermakers: $756,973
• Terence M. O’Sullivan of the Laborers’ International Union: $717,992
• John T. Niccollai of the United Food and Commercial Workers: $594,193
• Harold J. Daggett of the International Longshoremen’s Association: $533,222
Also missing from the list is the AFL-CIO’s own president, Richard Trumka, who reportedly earns $294,537 in total compensation.
“This year’s report provides further proof that the greed of corporate CEOs is driving America’s income inequality crisis,” AFL-CIO President Richard Trumka said in a recent press release touting the new edition of the Paywatch report.
“Big corporations continually find ways to rig the economy in their favor and line their CEOs’ pockets at the expense of the workers who make their businesses run. Too often, corporations see workers as costs to be cut, rather than assets to be invested in. It’s shameful that CEOs can make tens of millions of dollars and still destroy the livelihoods of the hard-working people who make their companies profitable.”
The AEI’s Perry also pointed out in his analysis that the methodology of the Paywatch reports often uses extremely small sample sizes that represent only 1 percent to 2 percent of all companies with CEOs, fails to compare CEO compensation to worker pay at the same company, including bonuses and all forms of noncash compensation and fringe benefits for CEOs, while ignoring those forms of compensation for employees.
“Among other flaws, the AFL-CIO’s metrics only take into account the highest-paid CEOs from the S&P 500, not the average pay of all U.S. chief executives — a much more accurate indicator of executive pay,” the Center for Union Facts’ Luka Ladan told Fox News. “Numerous fact-checkers, including The Washington Post, have questioned the AFL-CIO’s misleading conclusions.”