In the News

We have many reasons to be grateful to Thomas Piketty. His justly celebrated book makes it impossible to deny that the concentration of income and wealth are again approaching Gilded Age levels, far beyond what is required for incentive and efficiency. For the past 15 years, Piketty and his colleagues have put together the most comprehensive data set on inequality ever assembled. Now, in Capital in the Twenty-First Century, Piketty addresses his subject as a well-educated intellectual, not a myopic number-cruncher.

If you want a glimpse of super-sized pay inequality, look no further than America’s fast-food industry.

Nowhere is company-level pay disparity more apparent than in fast food, where CEOs reportedly take home $1,000 for every $1 earned by their typical employee.

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No less a capitalist than Henry Ford believed in paying his workforce enough so that the men who built his cars could buy his cars too. At McDonald’s, employees are encouraged to apply for food stamps if they aren’t making enough to eat.

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Domino’s Pizza boss J Patrick Doyle is getting too large a slice of the pie, shareholders will tell the company’s board at the fast food chain’s annual meeting on Tuesday.

The two largest shareholder advisory groups, ISS and Glass Lewis; CalSTRS, California’s $183bn teachers’ pension fund; and Change to Win investment group, which advises trade union-sponsored pension funds, have all voiced concerns about compensation at the pizza company ahead of Tuesday’s annual shareholder meeting in Ann Arbor, Michigan.

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The American economy overall is ferociously unequal, but some sectors are more unequal than others. A new study from the left-leaning think tank Demos looked at CEO-to-worker compensation ratios across the labor force in an attempt to determine where inequality is most concentrated. The answer probably won’t surprise you.

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Executive pay has risen dramatically—both in absolute terms and in relation to median wages—across the last generation. The spike in executive salaries is both a key driver of inequality at the top end of the income spectrum (about half of the “1 percent” are executives or managers at non-financial firms) and a symbolic marker of social norms in our “winner-take-all” economy. Conservative economists have tried to spin this as a triumph of market forces, manifesting the ability of superstar innovators to pull away from the pack in a global, wired economy.

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David Novak is the chief executive of Yum! Brands, the parent company that runs Pizza Hut, Taco Bell and KFC. Last year, while Yum! Brands and other restaurant companies lobbied against raising the minimum wage, Novak made at least $22 million—more than 1,000 times what the average fast-food worker makes in a year. In return for paying him so much, Yum! got a tax break.

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For those who believe in the redistribution of wealth, the hero of the hour is Thomas Piketty, the French economist whose book Capital in the Twenty-First Century provides a serious critique of inequality in modern capitalist economies and warns that market economies “are potentially threatening to democratic societies and to the values of social justice on which they are based.”

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The news has not been kind to the fast food industry over the past few years. From labor strikes to claims of wage theft, companies like McDonald's and Burger King have taken increasing criticism for treatment of workers and their low wage jobs. Now a new report from New York-based think tank Demos has added fuel to the fire.

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Fast-food restaurants are serving up plenty of food for discussion in the debate over income inequality.

Fast-food chief executives take home $1,000 for every $1 dollar earned by their average workers, making it the most unequal sector within the U.S. economy, according to a new report from public policy group Demos.

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