Monday, September 29, 2014

An Examination of Paul Krugman's Salary Versus That of An Average CEO

Mark Perry writes:

Paul Krugman recently accepted a position at an income inequality institute at the City University of New York (CUNY). According to a public records request (first reported by Gawker), Krugman will be paid $25,000 per month ($225,000 for a nine-month appointment) and will not have to teach any classes during his first year as a “Distinguished Scholar in the Graduate Center’s Luxembourg Income Study Center.” Starting in his second year, Professor Krugman will teach one graduate seminar per year. Krugman will be paid about twice the salary of the average full professor at CUNY of $116,364 (most recent contract data here, see chart above). Krugman will also earn in 9 months about 26% more than the average US CEO salary of $178,400.
I make these comparisons because of Krugman’s comments in his most recent NY Times op-ed “Our Invisible Rich“:
In fact, most Americans have no idea just how unequal our society has become. The latest piece of evidence to that effect is a survey asking people in various countries how much they thought top executives of major companies make relative to unskilled workers. In the United States the median respondent believed that chief executives make about 30 times as much as their employees, which was roughly true in the 1960s — but since then the gap has soared, so that today chief executives earn something like 300 times as much as ordinary workers.
So Americans have no idea how much the Masters of the Universe are paid, a finding very much in line with evidence that Americans vastly underestimate the concentration of wealth at the top.
...Isn’t it a little hypocritical and statistically misleading for a professor who makes 26% more than the average CEO and twice as much as the average professor at CUNY to be constantly lecturing us about income inequality and complaining about excessive CEO pay by comparing the highest paid 1/10 of 1% of US CEOs to the average of pay of all 132 million American workers?

1 comment:

  1. Krugman's favorite institution, the (well) FED, by keeping interest rates low and by encouraging Banksters to lend to Wall Street instead of Main Street, makes it convenient for CEOs to borrow money to buy back their own stock, causing the price to go up, so they can reap fortunes in options betting on their own rising stock. Stock buy-backs have become a major reason for the current stock-market bubble. We can count on Krugman to be on the wrong side of nearly every important question.