Fast-Food CEOs Make 1,000 Times the Pay of the Average Fast-Food Worker

April 22, 2014 | Bloomberg Businessweek |

Economic inequality in the U.S. can be quantified in all sorts of ways. The 1 percent account for almost 40 percent of the country’s wealth. The 0.1 percent account for more than 10 percent all by themselves. The combined wealth of the 0.01 percent totals $6 trillion. The pay gap between the top chief executive officers and the average workers at their companies is about 331 to 1. Now comes another ratio, courtesy of Demos, a public policy organization in New York: 1,200 to 1. That’s the pay gap between CEOs of fast-food companies and the average fast-food worker in 2012.

The report, scheduled for release later this morning, is called “Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy.” It notes that fast-food CEOs are some of the highest-paid executives in America, with an average compensation of $26.7 million in 2012. Fast-food workers are the lowest-paid. Their average hourly wage is $9.09. The companies cited include McDonald’s (MCD), Chipotle (CMG), Starbucks (SBUX), Yum! Brands(YUM) (owner of KFC, Pizza Hut, and Taco Bell) and six others.

Catherine Ruetschlin, an analyst at Demos and the author of the report, says she didn’t want to call out specific executives (though McDonald’s, the biggest fast-food chain by sales, gets extra attention.) Nor is she advocating a specific increase in wages for workers, though fast-food protesters have called for $15 an hour. “It’s not about how much a CEO makes or how little the workers do; it’s the relationship between the two,” she says. The economy is recovering; these companies are—overall—growing again, but only the executives are benefiting, she says. “I would be excited to hear what executives and shareholders have to say about this.”