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Why Are They Protesting Wall Street Execs
Do Execs Make 500 X More & Pay Less Tax?

CEOsMake500x
But Is this this chart really true? (find out)
truth meter3

Actually it has been even worse:
It was 516 to 1 in 1999
And 525 to 1 in 2000

Occupy Wall Street Protestors Are Fed UP

NOTE to Muslim scholars and students of knowledge: What follows is an example of applying the rules for verifying hadeeth (traditions of our prophet, peace be upon him) for evaluation and to authenticate evidences and proofs in today's non-Muslim world. Take notice of the replies coming from the big-bucks executives and super wealthy as they try to side track the issue from the main topic. And be aware, some Muslims try to do the same thing on issues we face every day.
Naturally, it is important to verify what we here (this is in Surah Al-Hujjarat, chapter 49), but it is also more important to deal with the issue in front of us, and not use the method of verification of hadeeths to hide behind when we don't have answers (or don't want to say the truth?).

While most Americans suffer from high prices, unemployment and huge tax burdens, not all are quite so hard up.

In fact, some at the top are really enjoying the American Dream, but it seems the less fortunate are becoming just a bit fed up. In fact, they are protesting in many places across America, under slogans of "Occupy Wall Street" and "Occupy Boston".

What do these high paid executives and politicians have to say about all this? What is their reply? After all, they are being accused of manipulating funds, contracts and taking pay offs (bribes?), money laundering and phoney money schemes. They have the right to speak out and produce whatever proof or evidence they have in their defence.

So far, they have complained about the evidences being brought against them.. (read)

If you checked your emails lately, visited a blog or logged into Facebook, chances are pretty good that you've seen the chart at the top of this article or something similar.

Many people express their support with the Occupy Wall Street protests. They quote the chart (above) and other, similar statistics showing the terrible disproportionate ratio between workers (slaves?) and managers (masters?)

The only come back from the money makers think tanks is - "The Chart is Not Actually Accurate"

And they are right - it has been worse!

But they have to say something. After all they are being accused of a very series imbalance of economics in our so-called "Free Enterprise System" here in the West. So far, all they come up with is: "The chart is not accurate"

Here is what different sources had say, to hoping to direct attention away from the main issue:

This chart (same one top of this article) lists ratios of CEO pay to average worker pay in the U.S. and 9 other countries.
The smallest ratio is Japan: 11 to 1. But keep in mind, they had a huge earthquake, Tsunami and Nuclear plant breakdown too. The U.S.A. highest at 475 to 1 (on their chart).

We got many readers asking us to check the numbers, partly because there is no source or additional explanation for the chart and even though it has no other reference it has gone all over the Internet.

Some of our clients complained it is going all over Facebook, Twitter and blogs at lightning speed and being tweeted and re-tweeted without people checking where its even coming from.

"These kinds of claims must be looked into and stopped if there is no reference for them. Facts must stand out clear on these issues. People are being affected by it and it's wrong" - anonymous

Before we check the accuracy of the numbers, it's worth exploring where the chart began and how it went viral.

It's been repeatedly cited in blogs and reports, including one paper presented at a conference of a United Nations affiliate. The paper, written by Thomas Prosser of the Industrial Relations Research Unit at the University of Warwick in the United Kingdom, included the same chart that’s now circulating, which it sourced to a 2005 paper by an M. Kroll titled, "CEO Pay Rates: U.S. vs Foreign Nations."

We located a scanned version of the paper on the Internet, and it did appear to be written by Prof. Mark Kroll. His institution wasn’t listed, but after some additional searching, we found that Kroll had been teaching at the Louisiana Tech College of Business in 2005 and that he is now the business dean at the University of Texas at Brownsville. But it turns out he didn’t write the paper after all.

"Actually, I am the ‘recipient’ of the paper you refer to," Kroll said in an e-mail. "The paper was done as a class project by 3 of my students in a graduate class back in 2005. The 475-to-1 ratio you reference is listed in a table in the paper the students wrote. They do not give a specific citation for the data in the table."

Note: the author stopped without finishing the rest of what the professor said. but you will find it later in this article... "Professor Kroll who graded the paper, added that "it would not surprise me if (the students’) number was ‘in the ball park.'"
Sometimes we have seen Muslim jurists and imams do similar things - by not reading the rest of the ayah or the complete hadeeth, it can twist the meanings or change the subject..

 

The paper’s cover sheet fooled us -- as it fooled others -- because the professor’s name appears in the middle of the page, and the three students’ names appear together at the bottom in a less prominent spot. We tried to reach the co-authors -- Adam Choate, Dana Rowzee and Jerrod Tinsley, all of whom were working on their Master of Business Administration in 2005 -- but we did not hear back.

So how about the substance of the chart?

From previous fact-checks, we knew that American CEOs are generously paid, and we had confirmed that for ordinary Americans, incomes are stagnating.

But on the specific comparison of CEO pay and average-worker pay, we found two liberal groups -- the Economic Policy Institute and the Institute for Policy Studies -- that have produced long-running studies of this question.

The most recent chart from the Economic Policy Institute shows a ratio of less than 200 to 1 for 2009. According to the group’s calculations, the peak since the mid 1960s was almost 300 to 1. But in recent months, it was never as high as high as 475 to 1.

Meanwhile, the most recent ratio from the Institute for Policy Studies is also smaller -- for 2010, it was 325 to 1.

Previous years did show the ratio higher (but only on two occasions did it exceed 475 to 1) To be specific, 516 to 1 in 1999 and 525 to 1 in 2000.

The Institute for Policy Studies’ ratios are higher than the Economic Policy Institute’s due to methodological differences. Sarah Anderson, who has co-authored the Institute for Policy Studies reports, said the figures can vary depending on several factors, including which CEOs are sampled and what types of compensation for both the CEO and the worker are used in the calculation.

Still, both of the years where the CEO pay ratio in the IPS study exceeded 475 to 1 was more than 10 years ago, so data from those years would be of questionable use to policy debates today.

In addition, neither of the two groups that compiled these figures made comparisons of CEO-to-worker pay across different countries, as the chart circulating on Facebook does.

So what we’re left with is an unsourced, undated chart with numbers that, at best, were only correct (approximately) in 1999 and 2000 according to one measure (but wrong according to a different measure).

Ms. Anderson of the Institute for Policy Studies said, for a paper written in 2005, a 475 to 1 ratio was not "crazy high," since the figure for 2004 in her group’s study was 431 to 1.

Professor Kroll who graded the paper, added that "it would not surprise me if (the students’) number was ‘in the ball park.'"

Still, that argument doesn’t help today’s social-media posters. This data they’re circulating is at best six years old, and the ratios fell since then.

Our ruling

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 argue the chart’s underlying point that the ratio of CEO pay to worker pay is a bit high in the United States, and is possibly higher in our free-wheeling economy than it is in the historically more egalitarian nations of Europe.

But this claim of a ratio being 475 to 1 - We say the chart gives off a sense of certitude and statistical precision that simply isn't warranted - and which is contradicted by the facts.

truth meter6Actually, we looked into to this subject and found some of the latest studies indicate the number for U.S. is only 325 to 1.

And these numbers are not made up by fanatical ideologists trying to downplay the gap between workers and management or the rich and poor.

So the chart is wrong and we rate this as FALSE.

That's what the big guys have to say about.
But was that the actual reason for these protests? Is the real issue about the exact number of times more money the high-paid executives make?
Or is the real issue that many Americans are working two and three jobs to support their families? And many more are out of work, jobless, without health care, cut off from Medicade and even homeless?
Does it really matter if these guys making all the rules pay themselves 100 times, 200 times or 500 times what the rest of us make? (I think not)

So now, it is your turn to speak out - Tell us & the world what you say about it.

truth meter3
By the way - the more you make the less Social Security Tax you pay!
How's that work, Mr. Obama?

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Last Updated (Thursday, 27 October 2011 03:40)

 

Comments  

 
#3 Editor to William Hurst 2011-10-19 15:38
Dear William,_Thanks for commenting. _Allow me to comment on your 'comment'._1st of all, your numbers don't add up right, your facts don't make sense and your math is way off._But, hey - nice try anyway. Who do you work for? What is your goal behind trying to disprove the executives are slave masters and we are the suckers?
Here is my "fixer upper" for your comments:
It depends on which CEO's and which "average" workers. The 470 number is (only?) about the top 500 CEO's salary, bonus and benefit vs an average $15 bucks an hour guy working (40?) hours a week. If you look at real average CEO which is about 1.3 million vs real average worker at (30,000) the multiplier is (still over 50 times) And consider glaring examples like Opra Winfrey at 290 mil and Larry Elision (Oracle) at billions with stocks but those are (not) the norm.
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#2 William Hurst 2011-10-19 14:10
It depends on which CEO's and which "average" workers. The 470 number is about the top 500 CEO's salary, bonus and benefit vs an average 15$ an hour guy working 33 hours a week. If you look at real average CEO which is about 1.3 mil vs real average worker at 58,000, the multiplier is only 23. There are some glaring examples like Opra Winfrey at 290 mil and Larry Elision (Oracle) at a billion with stock but those are far from the norm.
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#1 sandra b 2011-10-16 20:57
Am I the only one who thinks, the power behind the corporates will use the
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