CEO-to-worker pay is 281:1. In 1965 it was 21:1. Competition requires rules — when corporations write them, the market is neither free nor competitive.
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In 1965, the ratio of CEO pay to average worker pay was 21 to 1. Today it is 281 to 1. That didn't happen by accident. It happened because of a systematic, decades-long campaign by corporate interests to rewrite the rules governing markets, labor, and political influence in their own favor.
The transformation began in the early 1980s with the deregulation movement. Under the ideology that markets are self-correcting and government intervention is inherently harmful, antitrust enforcement was gutted. The Reagan administration adopted the "consumer welfare standard" — a legal theory arguing that monopolies are only harmful if they raise consumer prices in the short term. This framework ignored every other consequence of concentration: suppressed wages, reduced innovation, diminished quality, fewer choices, and the political power that comes with economic dominance. Under this standard, merger after merger was approved, and entire industries were consolidated into the hands of a few corporations.
Weakened antitrust enforcement compounded the problem. Between 2000 and 2020, over 75% of US industries became more concentrated. Four companies now control 85% of beef processing. Three companies control 80% of the cellphone market. Two companies control 90% of the beer market. In sector after sector, the competitive markets that are supposed to keep prices low and wages fair simply don't exist anymore.
Citizens United sealed the feedback loop. The Supreme Court's 2010 ruling allowed corporations to spend unlimited amounts on political campaigns, giving concentrated industries the ability to purchase the politicians who regulate them. Since Citizens United, corporate and dark money spending on elections has exceeded $15 billion. The revolving door between corporate lobbying and government positions ensures that the people writing regulations are the same people who previously lobbied against them — and who will return to lobbying after they leave government.
Shareholder primacy doctrine — the idea that a corporation's only obligation is to maximize returns for shareholders — replaced the post-war social contract in which corporations were understood to have obligations to workers, communities, and the broader public. The result is an economy in which corporate profits have reached record highs while worker wages have stagnated for decades. CEO pay has grown 1,094% since 1978. Worker pay has grown 26%. The gap is not a market outcome. It is a policy outcome — the product of rules written by and for corporate power. For how this connects to the labor movement and worker rights, see our labor policy page.
| Year | CEO-Worker Ratio | Key Policy Change |
|---|---|---|
| 1965 | 21:1 | Strong unions, progressive taxation, active antitrust |
| 1978 | 30:1 | Pre-deregulation era |
| 1989 | 59:1 | Reagan deregulation, consumer welfare standard |
| 2000 | 366:1 | Dot-com bubble, stock option compensation |
| 2010 | 221:1 | Citizens United, post-financial crisis recovery |
| 2023 | 281:1 | Record buybacks, weakened enforcement |
Source: Economic Policy Institute, CEO Compensation Survey. See the full corporate power issue page for complete sourcing.
Over the past decade, American corporations have spent $7.37 trillion buying back their own stock. That's $7.37 trillion that didn't go to worker wages, R&D investment, new factories, or lower prices. It went to inflating share prices — and enriching the executives whose compensation is tied to those prices.
Here's how buybacks work. A company uses its cash — often profits, sometimes borrowed money — to purchase its own shares on the open market. This reduces the number of shares outstanding, which mechanically increases the earnings per share and the stock price. Because CEO compensation is overwhelmingly tied to stock performance — through stock options, restricted stock units, and performance bonuses — buybacks are effectively a mechanism by which executives pay themselves using company resources.
Before 1982, stock buybacks were effectively illegal. The SEC considered them a form of stock market manipulation — and for good reason. Then the Reagan-era SEC adopted Rule 10b-18, which provided corporations with a "safe harbor" from manipulation charges when conducting buybacks. The floodgates opened. In 1981, American corporations spent approximately $5 billion on buybacks. By 2018, that number had reached $806 billion in a single year. During the COVID-19 pandemic, major corporations that had spent billions on buybacks in previous years demanded taxpayer bailouts because they had no financial reserves — having returned all their profits to shareholders instead of building the resilience that private businesses are supposed to maintain.
The Inflation Reduction Act of 2022 imposed a 1% excise tax on buybacks. The Common Good plan raises that to 4% — still modest, but enough to shift incentives. When buybacks become marginally more expensive, companies redirect capital toward investment, wages, and R&D. But the deeper issue is structural: as long as CEO compensation is overwhelmingly tied to stock price rather than long-term company performance, worker welfare, or productive investment, the incentive to prioritize buybacks will persist. That's why the Common Good plan pairs the buyback tax with worker codetermination — giving employees a voice in how corporate profits are allocated.
For a detailed breakdown of how buybacks interact with the broader tax code and how tax reform can redirect corporate capital toward productive investment, see the affordability and cost of living page.
The Common Good plan attacks corporate concentration from every angle: breaking up monopolies, regulating digital platforms, restoring financial safeguards, ending corporate capture of government, and giving workers structural power within the corporations they build.
Each provision addresses a specific mechanism by which corporate power has distorted markets, suppressed wages, and captured political institutions. Together, they restore the conditions for genuine competition — the kind that actually benefits consumers, workers, and the economy.
For the complete plan with legislative detail, cost projections, and sourcing, see the full corporate power issue page. For how these provisions connect to campaign finance reform and the fiscal framework, explore the linked pages.
The United States is an outlier among wealthy democracies in the degree to which corporate power is unchecked. Other countries have stronger antitrust enforcement, worker representation on corporate boards, higher union density, and tighter rules on executive compensation. The results speak for themselves.
| Country | CEO-Worker Ratio | Worker Board Seats | Union Density | Antitrust Enforcement | Buyback Rules | Codetermination |
|---|---|---|---|---|---|---|
| United States | 281:1 | None required | 10% | Weakened | 1% excise tax | None |
| Germany | 36:1 | 50% (large cos.) | 17% | Strong (EU + national) | Restricted | Required by law |
| Japan | 58:1 | Informal (keiretsu) | 17% | Strong (JFTC) | Restricted since 2001 | Informal |
| Sweden | 44:1 | 33% (25+ employees) | 65% | Strong (EU + national) | Restricted | Required by law |
| United Kingdom | 109:1 | Advisory only | 23% | Strong (CMA) | Disclosure required | Voluntary |
| South Korea | 61:1 | None required | 14% | Strong (KFTC) | Restricted | Limited |
The pattern is clear. The United States has the widest CEO-to-worker pay gap, the weakest worker representation on corporate boards, the lowest union density, and the most permissive stock buyback rules of any peer economy. These are not coincidences. They are the predictable outcomes of policies that prioritize corporate power over competitive markets and worker rights.
Germany — which has required worker board representation since 1976 — has lower inequality, higher manufacturing productivity, stronger exports, and more stable corporations than the United States. The German model is not anti-business. It is anti-exploitation. And it produces better outcomes for workers and shareholders alike. For a detailed side-by-side comparison of party positions, see the Compare Parties page.
Codetermination is a governance system in which workers elect representatives to sit on a company's board of directors — giving them a legally binding voice in decisions about executive pay, layoffs, plant closures, strategy, and capital allocation. Germany has required it since 1976, and the results are unambiguous: lower inequality, higher productivity, more stable companies, and a manufacturing sector that leads the world.
In Germany, all companies with more than 2,000 employees must reserve half of their supervisory board seats for worker-elected representatives. Companies with 500-2,000 employees must reserve one-third. This isn't optional — it's the law, and it has been for nearly fifty years. The system covers over 5 million German workers. Companies operating under codetermination include Volkswagen, BMW, Siemens, SAP, BASF, and Deutsche Bank — hardly a collection of struggling enterprises.
The evidence on codetermination's effects is extensive. Studies from the National Bureau of Economic Research, the Institute of Labor Economics, and the European Economic Review consistently find that codetermination reduces income inequality within firms by 10-15%, increases productivity — because workers who have a voice in decisions are more engaged, more innovative, and more likely to flag operational problems before they become crises, decreases employee turnover — saving companies the enormous costs of recruiting and training replacements, and makes companies more resilient during downturns — because boards with worker representation are less likely to resort to mass layoffs as a first response to economic pressure, instead finding alternatives that preserve institutional knowledge and community stability.
The Common Good plan would require companies with over 1,000 employees to reserve one-third of board seats for worker-elected representatives — a more modest version of the German model, but one that would still represent a fundamental shift in American corporate governance. Workers would have a direct voice in decisions that affect their lives: whether the factory stays open, whether wages keep pace with productivity, whether profits go to buybacks or investment.
Opponents call codetermination "radical." In Germany, it's been the law for nearly fifty years. The country has the largest economy in Europe, the strongest manufacturing sector, and consistently lower unemployment than the United States. If giving workers a seat at the table is radical, the evidence suggests it's also effective. For how this connects to the broader labor and worker rights platform, see the linked page.
Corporate lobbying has produced a set of economic myths that most Americans accept without examination. These narratives protect concentrated power by making regulation seem dangerous and the status quo seem natural. Here are the four most persistent — and what the evidence actually shows.
Myth: "The free market regulates itself."
Reality: Markets require rules to function. Without antitrust enforcement, dominant companies acquire or crush competitors, eliminating the competition that markets need to serve consumers. When four companies control 85% of beef processing, ranchers have no negotiating power and consumers have no alternatives. That isn't a market failure — it's a regulation failure. Every market that has ever existed — from medieval trade fairs to modern stock exchanges — has operated under rules. The question is never whether to regulate, but who writes the rules and who benefits from them. In the absence of public regulation, corporations write private regulations that serve their own interests. See the full corporate power page for evidence from every concentrated industry.
Myth: "Breaking up companies hurts consumers."
Reality: The opposite is true. When AT&T was broken up in 1984, long-distance rates dropped 60% over the following decade, and the resulting competition spurred the innovation that created the modern telecommunications industry. When Standard Oil was broken up in 1911, the resulting companies competed so aggressively that oil prices fell and shareholder value actually increased. Corporate consolidation raises prices — studies estimate it costs American families $5,000 or more per year. Breaking up monopolies restores the competition that keeps prices low, quality high, and innovation alive.
Myth: "CEOs deserve their pay because they create value."
Reality: CEO compensation is not determined by market forces — it's determined by compensation committees composed of other executives and board members who have every incentive to inflate pay packages. Studies from the Economic Policy Institute show that CEO pay is largely disconnected from company performance. CEOs of underperforming companies routinely receive massive raises, bonuses, and golden parachutes. Meanwhile, worker productivity has increased 62% since 1979, but median worker compensation has grown only 17%. If CEO pay tracked productivity gains the way worker pay did in the 1950s and 1960s, CEOs would earn a fraction of their current compensation. The 281:1 ratio reflects power, not value.
Myth: "Regulations kill jobs."
Reality: The regulatory frameworks of the 1940s through 1970s — when antitrust enforcement was strong, unions were powerful, and corporate taxes were high — coincided with the greatest period of economic growth and job creation in American history. The deregulation era that followed produced slower growth, greater instability, and the most severe financial crises since the Great Depression. Germany, which has stronger labor regulations, mandatory codetermination, and higher corporate taxes than the United States, has lower unemployment and a stronger manufacturing sector. The "regulations kill jobs" narrative is an industry talking point that is contradicted by the economic data from every wealthy democracy — including the United States' own history. For the full economic analysis, see the healthcare, taxation, and racial justice pages.
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CEO pay has grown 1,094% since 1978. Worker pay has grown 26%. That's not a market outcome — it's a policy outcome. Read the full plan and see exactly how we restore competitive markets.