Did you know that in 1965—when America was experiencing one of its most robust periods of economic growth—the typical CEO got paid roughly 20 times what average wage earners earned? And apparently did just fine. Do you want to guess what that ratio is today? It’s 281-to-1. And at many companies it’s even worse. At Starbuck’s, for instance, the pay gap in 2024 was 6,666 to 1.

This inequity hasn’t occurred because the wealthy are any smarter than everyone else, or working any harder. It was caused by a series of policy decisions that have steadily made life easier for the wealthy, and harder for most working people. As you can see from the chart below (or on this link), the portion of America’s economic growth that goes to wage earners has been generally falling since 1945 and has now reached a historic low.

In this second installment of our new series—which explores how we might build a more sustainable economy, and if that’s even possible—we’ll focus on a handful of the big changes that have, over the years, essentially clubbed the working class over the head. Listed in mostly chronological order, this is something of a highlights parade—our economic history presented as a series of WTF factoids.

• After the U.S. corporate tax made its debut in 1909, at the timid rate of 5 percent, the rate gradually rose, reaching a peak of 53 percent in 1969. (It may be no coincidence that 1969 was also squarely in the middle of America’s most robust period of economic growth, an era often called “The Golden Age of Capitalism.”) Today, due to a series of tax cuts—started in the 1980s by President Ronald Reagan, and continued, albeit intermittently, in the years since—corporations pay less than half that amount: 21 percent
• That 21-percent rate, I should note, is what corporations are supposed to pay. Their “effective” tax rate—what companies actually pay, after taking advantage of the numerous tax breaks and loopholes they’ve been given—is around 14 percent.
• And it gets worse. From 2018 to 2022, many corporations made full use of those loopholes. Some paid as little as 5 percent in taxes, and a stunning 23 firms paid no tax at all. Despite being profitable every one of those years, all 23 of these freeloaders received tax rebates. In 2020 alone, 55 of the nation’s most profitable companies, including those in the graphic below, paid no taxes.

• If new profits from employees’ increased productivity aren’t being shared with workers, where is the money going? The option that had long been used, at least during our periods of greatest economic strength, was to reinvest a company’s extra profits in business growth. But that’s only partly the case now. Today, these profits are mostly poured into two buckets: higher executive salaries; and higher profits for stockholders, through an old trick called “stock buybacks.” This maneuver, which used to be illegal, artificially inflates stock prices. That, in turn, boosts CEO salaries, all at the expense of a company’s R&D, and its frontline workers.2
• The SEC ruling created a buyback frenzy, with the amount spent on the practice rising dramatically in recent years. In 2024 alone, stock buybacks shifted $1.34 trillion dollars away from wages and business development. Interestingly, some of the companies that take the greatest advantage of stock buybacks also pay the lowest wages. Every year, the Institute for Policy Studies publishes a list of the 100 corporations on the S&P 500 that fit this criteria — what it calls “The Low Wage 100.”
• Among this group, the buyback leader in 2025, and in other years, was Lowe’s, which spent $46.6 billion repurchasing its own shares from 2019 through 2024. During those years, IPS concluded, that money could have funded a $28,456 bonus for each of the firm’s 273,000 employees — or added 88 employees to each Lowe’s outlet. In 2024, Lowe’s CEO Marvin Ellison enjoyed a total compensation of $20.2 million — 659 times more than the retailer’s $30,606 median annual worker pay.
• Stock buybacks are just one piece of a long-growing shift in corporate loyalty from employees to shareholders. The result, as you can see from the chart below, is that economic inequality in the U.S. has returned to, and now tops, the horrific levels that preceded the Great Depression.

• The amount of wealth at the top of that chart is almost beyond comprehension.3 As just one example, consider this: According to the Forbes real-time billionaires list, the 35 richest Americans now own $4.22 trillion. This means that fewer people than can fit on a city bus own more money than it takes to fund Social Security, Medicare, Medicaid, Obamacare, children’s health, veterans & military healthcare, and disability insurance.
• If you still think the billionaire class earned this money fairly and squarely, you would be wrong. The U.S. tax code did most of the work for them, as you can see from the following graphic.

As all these policy treats have piled up for the ultra-wealthy (courtesy of Congress and almost all recent presidents), they have put the country into a kind of reverse socialism — or what might better be described as affirmative action for the rich. The irony of this transformation, at a time when affirmative action programs for everyone else have fallen out of favor, is something that should be savored — if it weren’t so bitter.

See you again next month, with some ideas on how to start cleaning up this mess, starting on the wage front.