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Wednesday, January 03, 2007

CEOs Already Done (Compared to You) for 2007

It's what's all the rage right now - Democrats winning and the populous clamoring for that raise in the minimum wage. Well, starting January 1st, a lot of minimum wage hikes took effect, even though many many businesses were closed for the national holiday and whatnot. Of course, if you were a salaried CEO, that wouldn't matter at all - you'd be getting paid no matter what.

Here's the scary part - and the lesson to be learned about the different between the S&P 500 and the Average Joe:

Compared to the Average Joe working a full-time job at minimum wage - the CEOs are already done for the year.

I guess this is where the math comes in. From the various reports I've been reading about the 2005 fiscal year's reports of the salaries of the CEOs for the Standard & Poor's 500 companies, the average salary per CEO ranges from $10.2 million to $13.5 million. Let's take the lowest value and assume that the average salary for a CEO is only $10 million for the year.

$10,000,000 a year =
$192,307.69 a week =
$27,472.52 a day =
$1,144.68 an hour =
$19.078 a minute =
$0.32 a second

That's what they're getting paid every second of every minute of every hour of every day of every week as the paychecks come rolling in - whether they're the kind of CEO who works a 90-hour workweek or sits back and plays golf most days of the week while grunts take care of everything. Now let's do more math with this whole rate hike for the minimum wage.

The Federal Minimum Wage is now $5.15/hr though sometime in early-to-mid 2007 it'll become $7.25/hr. Some states have their own minimum wage laws. In Kansas, the state with the lowest minimum wage (which applies to jobs not covered by the Fair Labor Standards Act), you'd only earn $2.65/hr. The state with the highest minimum wage is Washington, with a wage of $7.93/hr. In fact, a few cities have higher minimum wages - in Los Angeles, if you don't get health benefits, your minimum wage is $10.33/hr. So let's do the math for a full-time employee working a standard 40-hour full-time workweek:

40 hrs x 52 weeks -> 2,080 paid hours
Non-FLSA Kansas: $5,512/year
Now (Federal): $10,712/year
With the hike: $15,080/year
In Washington: $16,494.40/year
In Los Angeles: $21,486.40/year

Here comes the fun math!

So, Average Joe, that's how much you made from an honest day's work of 40 solid hours a week. If enough people complain about my estimates of 40 hrs/week as being too low, or that I should take into account hard-workers and overtime or something, I'll update this. (Let's face it, nobody comments/debates on my posts anymore.) So while you were celebrating the New Year holiday with an actual day off (if you were lucky enough to get that day off) - let's see what the CEOs were earning while they got the day off, too!

By 5:00 AM, before most of the populous had even woken up, the CEOs amassed an average of over $5,700 - passing the annual yearly income in Kansas if you happened to work at a business not covered by the Fair Labor Standards Act.

How long until they earned what Average Joe would earn this year without the rate hike?

January 1st, 2007 - 9:22 AM:
The CEOs just surpassed your annual pay.

But what about after this rate hike up to $7.25/hr?

January 1st, 2007 - 1:11 PM:
The CEOs just surpassed your annual pay.

Okay, okay... How about if I move to Washington?

January 1st, 2007 - 2:25 PM:
The CEOs just surpassed your annual pay.

Fine! I'll move to L.A. and forego health benefits!

January 1st, 2007 - 6:47 PM:
The CEOs just surpassed your annual pay.

Is this scaring you at all?

Before most of the working-class had time to get over their HANGOVERS from celebrating the ball dropping and the new year starting, let alone wake up if they partied hard enough, CEOs already earned in less than one day what minimum-wagers would earn in the entire year.

Then there's taxes. Which affect both sides of this argument quite differently, and may be brought up in a further investigation.

For now, I'll let this sink in - and give you time to sleep on it.

Because after all, in the time you'll spend sleeping - a CEO probably made your annual pay without having to lift a finger, whether fingers were lifted or not.

One report
Another report
The article that started my thinking
Minimum wage info

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