Do CEOs make 475 times more than workers? Not really.

Not true, says Politifact

A chart that has gone viral on social media sites claims that American CEOs earn 475 times more per year than the average worker. That’s outrageous, right? That’s how I felt when I saw it. But it’s simply not true, says Politifact, the fact-checking site run by the St. Petersburg Times.

The chart lists the ratio of CEO pay to average worker pay in the U.S. and nine other countries. The smallest ratio is Japan’s at 11 to 1. The United States is highest at 475 to 1.

… The chart is the latest reminder that factual claims can spread at lightning speed on the Internet — even when the facts to back them up are scarce.

In addition to being shared on Facebook, emailed, and tweeted and re-tweeted thousands of times, the chart has also been cited in a report at a conference of a United Nations affiliate. Politifact did the due diligence and tracked down the origins of the chart—which should have aroused suspicions because it’s not dated and doesn’t cite any sources for its data. It turns out that chart originated in a paper written by three graduate students at Louisiana Tech College of Business in 2005.

In a post that details the intriguing background of the chart, Politifact concludes:

This is a textbook example of how claims can spiral out of control on the Internet. Just as conservatives have circulated unfounded claims about President Barack Obama’s birth certificate, liberals are spreading this questionable chart.

We don’t doubt the chart’s underlying point that the ratio of CEO pay to worker pay is high in the United States, and is likely higher in our free-wheeling economy than it is in the historically more egalitarian nations of Europe.

But in its claim that the U.S. ratio is 475 to 1, the chart conveys a sense of certitude and statistical precision that simply isn’t warranted — and which is contradicted by the facts. The latest number for the U.S. is 185 to 1 in one study and 325 to 1 in another — and those numbers were not generated by groups that might have an ideological interest in downplaying the gaps between rich and poor. We rate the claim on the U.S. ratio False.

Gloria Shur Bilchik Gloria Shur Bilchik (483 Posts)

Gloria Shur Bilchik is a freelance writer and community volunteer in St. Louis, Missouri. She is the editor of Occasional Planet. She views the preservation of progressive values as vital to making the US a humane, livable place for her children and grandchildren.


  • http://www.facebook.com/norm.breyfogle Norm Breyfogle

    So, the average ratio of CEO pay to worker pay in the USA is somewhere between 375:1 or 185:1, instead of the 475:1 indicated in
    the erroneous chart. HOWEVER, the main point of the erroneous chart remains the same, as is clear when looking at the ratios in other countries.