Extravagant Union Bosses Exploit Their Members

When the AFL-CIO, America’s largest federation of labor unions, recently released its annual Executive PayWatch report, it strived for sensationalism.

American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) signage on the building at the intersection of 16th Street NW and Eye Street, just two blocks north of the White House, in Washington, D.C., on July 25, 2005. Chip Somodevilla/Getty Images

When the AFL-CIO, America’s largest federation of labor unions, recently released its annual Executive PayWatch report, it strived for sensationalism. The report alleges that the average S&P 500 CEO received $12.4 million in total compensation last year, compared to $36,875 for the “average nonsupervisory worker.” This comes out to a 335:1 CEO-to-worker pay ratio.

But numerous fact-checkers—from The Washington Post to the American Enterprise Institute’s Mark Perry—have questioned the math behind the eye-catching figure. Perry rightly points out that the AFL-CIO’s metrics only take into account the highest-paid executives from the S&P 500, not the average pay of all chief executives in the United States—which amounts to an average annual salary of $185,850, according to the Department of Labor (DOL). That’s a far cry from “12.4 million in total compensation,” and it means the actual CEO-to-worker pay gap drops to single digits.

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