Employment Policies Institute: New Demos CEO Pay Study a “Publicity Stunt” in Push for Higher Wages

  • Publication Date: April 2014

  • Topics: Minimum Wage

Washington, D.C. – Today the Employment Policies Institute (EPI) is dismissing a new report from the labor union-backed Demos as a lame attempt to justify a minimum wage hike.

Michael Saltsman, EPI’s research director, released the following statement in response to the new analysis:
The implication of the labor-backed Demos report and others like it is that hourly employees in the service industry could be paid more if executives were paid less. But our analysis of compensation data shows that even if CEOs of major service-sector companies took a 100 percent pay cut – including salary, bonuses, and fringe benefits – the resulting pay bump for the rest of the staff would be about a penny per hour.

Demos’ report is just the latest publicity stunt in the campaign for a higher minimum wage. A report by the nonpartisan Congressional Budget Office has established conclusively that $10.10 will cost up to one million jobs, which is why groups like Demos are desperately searching for other ways to make their case.

In an amusing bit of circular reasoning, this SEIU-backed think tank points to the stage-managed and SEIU-backed fast-food “protests” as proof of “increasing risk” to fast-food companies from the pay gap.

In an industry such as fast-food where 96 percent of the employees don’t have a college degree, it should surprise no one that a pay gap exists between someone working their first job and someone running a multi-billion-dollar company. What’s unacknowledged in this misleading narrative that Demos and others have put forward is the value of service-industry jobs. Two-thirds of minimum wage employees receive a raise within a year on the job–but they need a job in the first place in order to get that raise.

Proponents can either have a higher minimum wage, or they can have the same number of job opportunities that exist presently. But they can’t have both.