Let's talk CEO to employee pay ratios

This is not a political post. I am more looking to create a discussion on the economy and what seems to have been a massive shift in our economy from an employee led economy and where we are now.

There is no denying that there has been a massive shift of wealth to the top 2%. We have all seen the details where CEO to average employee pay has changed significantly. In 1980, the ratio was 42:1, in 2020, it was 351:1. We are also in an economy that is dominated by large corporations in almost every industry we have. Groceries, for example, 3 companies own 85% of the market. And this is happening in multiple industries.

In many ways, our current economic stance resembles where we were 100 years ago. A period that is often referred to as the roaring 20's. This was a period of time that saw unprecedented economic expansion with the U.S. GDP growing signifcantly driven by several factors to include:

• Technological Advancements: The decade experienced major technological progress, particularly in manufacturing and consumer goods
• Mass Production: Companies like Ford Motor Company pioneered new manufacturing techniques, increasing efficiency and output
• Consumer Culture: A culture of consumerism emerged, with more goods reaching more people than ever before

In many ways, we are seeing a lot of those same trends right now. With AI, advances in energy production and more. This led to

• Stock Market Boom: The U.S. stock market enjoyed a huge run-up from 1925 until 1929, with the Dow Jones Industrial Average quadrupling in value
• Low Unemployment: The unemployment rate remained generally low throughout most of the decade
• Low Inflation: The consumer price index, measuring inflation, was generally low
• Rising GDP: Per capita gross domestic product (GDP) grew considerably.

But...this period was also plagued with some big underlying issues. Namely a rise in both consumer debt, massive wealth inequality and increase isolationism (as a backlash to WWI). All trends that we are also seeing today.

"History doesn't repeat itself, but of often rhymes." - Mark Twain

The end of the roaring 20s was, well, not awesome. So my point is this. We need to understand the lessons of the past and not repeat them. Economically, we should consider what is going on with the core of our economy and whether or not things like Monopolies and wealth inequality are good or bad things for our economy.

Lest we get a 100 year poem thrown back in our faces.