Occupy Democrats has been posting a bunch of memes to Facebook talking about the call for a $15 minimum wage. And the way they are trying to support the idea is comparing against the “hourly wage” of a corporation’s CEO. The idea is flawed for two reasons: CEOs don’t work the “traditional” 40/hrs per week — a lot of them work a hell of a lot more than that because they have to — but also because of simple arithmetic.
And this makes me wonder about the future intelligence of this country.
So if you take the “hourly wage” of a corporation’s CEO and divide it by 15, you’ll see quite clearly why it is that many corporations cannot afford $15/hr for their employees, even if their CEO was paid nothing. For example, let’s look at Wal-Mart.
According to Salary.com, Wal-Mart’s CEO, C. Douglas McMillion, received a total cash compensation of $4,079,202 for 2014. Divide that by 2080 (40 hours per week, 52 weeks per year) and you get $1961.15 per hour (again, C-level executives tend to work a lot more hours than that, meaning their actual per hour rate is lower). Divide that by 15, and you get 130 (rounding down). In other words, if you zeroed out the CEO’s cash compensation, you’ll be able to pay 130 employees $15/hour at 40 hours per week for 52 weeks.
Just 130 employees. Wal-Mart employs over 1 million people just in the United States, over 2 million worldwide.
But let’s go further and zero out the cash compensation for all of the listed C-level executives. According to Salary.com, if I didn’t fumble on the calculator, the total on that is $18,302,268. That’s not really a lot, when you think about it. And how many employees would that support at $15/hour full time? Only 586.
Now, I can hear the argument, “That’s for new employees. That would be used to give employees raises to $15/hour.” Okay, let’s presume you’ll use that money to raise up all employees currently making the current Federal minimum of $7.25/hour to $15/hour. How many people would get that raise? Just 1,135.
If you want an idea of how many employees a C-level executive’s cash compensation will support at $15/hour, take the reported number and divide it by 31,200. To see how many employees would be raised from a minimum wage (which varies by State and locale) to $15/hour by zeroing out executive cash compensation, multiply 2080 by the difference between $15 and the current minimum wage and divide the executive cash compensation by that result. If you have no idea how to figure that out reading the preceding sentences, you need to go back to school and re-learn basic arithmetic.
And if you seriously think that C-level executive pay is the problem, and that if they were just paid less those corporations could afford $15/hour for their employees, again, you need to go back to school and re-learn basic arithmetic and algebra, and a couple business classes wouldn’t hurt either.