The Pay Gap Isn’t Just Immoral – It’s Bad For America

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McDonald’s CEO, Stephen Easterbrook, is departing the company due to violating company policy. However, he’s not going away empty-handed. The CEO, who made nearly $16 million at McDonald’s in 2018, is getting a generous exit package to the tune of nearly $42 million – and this is on top of over $23 million in stock options he can now exercise. Many have pointed to Easterbrook’s pay and exit package as part of the growing problem with the pay gap between employers and employees. But what does this problem look like in real terms?

What if the CEO reinvested $6M in employees?

First, some facts. As mentioned earlier, Easterbrook made nearly $16 million in McDonald’s income in 2018. McDonald’s has nearly two million employees worldwide (as of 2016), with 420,000 employees in the U.S. (as of 2015) – with the worldwide median worker making just $7,500 a year (a part-time position). In the United States, things are a bit rosier, as employees make on average $9 an hour. Therefore, theoretically, a full-time U.S. worker could expect to make $17,280 a year. With this in mind, if the CEO gave up just $6 million of his income each year (still leaving him with a nice round $10 million) and reinvested it in employees, we could see either…

…350 new full-time U.S. jobs
…an extra $14 a year for every current U.S. McDonald’s employee
…800 new median McDonald’s jobs
…an extra $3 a year for every current McDonald’s employee in the world

What if the CEO didn’t get an exit package?

The fact that someone who has been fired for inappropriate conduct is getting an exit package at all is likely to raise eyebrows among regular workers – who would expect an unceremonious and swift sendoff if the same thing happened to them. But digging deeper, what could $42 million pay for if it wasn’t going to the CEO? Well, we could expect to see either…

…a $100 bonus for every current U.S. McDonald’s employee
…a $21 bonus for every current McDonald’s employee in the world

What if this was a billionaire?

Let’s ratchet things up a notch and look at a billionaire. Jeff Bezos, CEO of Amazon, makes approximately $132 billion a year. Meanwhile, Amazon has 647,500 employees which make on average $101,000 a year. If he gave up $32 billion a year and settled for a nice round $100 billion, what could that pay for? Well, we could see either…

…316,831 new jobs
…an extra $49,420 a year for every current Amazon employee

Final considerations

In the U.S., the federal poverty level for a single person is $12,140, with some assistance programs available for those who are at 200%-400% of that ($24,280-$48,560) – and this doesn’t even take into consideration if someone is the breadwinner of a household. Seeing as the average full-time McDonald’s employee can be expected to make only $17,280 a year, it’s a given that McDonald’s employees are using government assistance programs – which we all pay for. So while Easterbrook makes off with $42 million, hundreds of thousands of U.S. workers – and millions of employees around the world – are just scraping by (often with the help of government assistance).

But, as we can see from the numbers above, this absolutely doesn’t have to be the case – especially once you extrapolate for all the executives out there who are making millions and even billions of dollars. In fact, it looks a lot like theft and exploitation of the lower classes. The exorbitant pay gap between employers and employees (in this case by a factor of 2,124) is not only unethical and immoral, but simply bad for business, bad for the economy, and bad for the average tax-paying American. If the rich won’t give back directly to their employees through higher wages and benefits, then we should create executive pay caps or tax structures that specifically target them to ensure workers are getting their fair share of their money. No one deserves $42 million – least of all someone who got fired from their job.

Casey has a background in writing and journalism – and is known for his mediation and discussion skills. In his spare time he enjoys absorbing, dissecting and disseminating information — particularly in U.S. politics, religion, technology, science, music, gaming, and pop-­culture.

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