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Pay gap between CEOs and workers is growing in Northeast Ohio

Posted: 11:14 PM, Sep 18, 2018
Updated: 2018-09-19 09:43:42-04

According to a report released by Policy Matters Ohio, the pay gap between local company CEOs and their workers has now grown to 200% or more at 28 of 44 major Ohio corporations.

The report, authored by Abby Kopp and Ohio Policy Matters Research Director Zach Schiller, utilized mandatory pay reports, issued by the companies to the Securities and Exchange Commission in 2017.

The report outlines CEO to worker pay ratios, that in some cases, is showing a local CEO being paid 300 times what their average employees are earning, or more.

The report also showed other Ohio CEO's reported paychecks that were 1,200 times, up to 3,400 times larger than their average worker.

Schiller told News 5 he believes the growing pay gap could be bad for worker productivity and workplace efficiency.

"CEO pay has gone up 1000% over the past 40 years, the typical worker it's gone up 11%," Schiller said.

"It's creating a gulf between them and the rest of us, and I don't think that's healthy for democracy.  It also means that there isn't as much for your typical worker."  

Schiller believes the growing pay gap has been partly fueled by the declining influence of labor unions.

Former northeast Ohio banking vice president Norman Lange told News 5, CEO salaries need to be capped, that if CEO salaries were contained, it could help put more people to work.

"Cap some of the incomes of the CEO's at the top," Lange said.

"When they're making 400 times what the average employee is making, and it used to be 25 times."

Schiller said it will take changes in policies at the state and municipal level to help put the brakes on the growing disparity in pay, and said a few cities have adopted a tax against companies with a high CEO to worker pay ratio.

"The states or cities could start enacting policies, where they say we're not going to start giving financial incentives to companies that have a really outrageous ratio," Schiller said.