Merkley bill would ensure workers gain - not just CEOs

Merkley bill would ensure workers gain - not just CEOs

Would impose surtax to curb widening wage gap

WASHINGTON - As Labor Day approaches, Sen. Jeff Merkley, D-Ore., announced Thursday that he will be introducing new legislation to make sure workers get a fair share of the profits they create by taking on massive pay disparities between CEOs and workers.

The Fair Share for Workers Act would raise the corporate tax rate on companies that pay their CEO more than 30 times the average worker at that company. As this disparity in pay increases, so would the applicable surtax on the company’s profits, Merkley said in a news release.

“As the son of a union mechanic, I know that we all do better when workers get a fair share of the profits they create,” Merkley said. Workers are the backbone of our economy, but in too many companies today, their work is being exploited to send ever-increasing profits to the one-percent, while the folks who make a company run are left behind.

"The privileged and powerful have rigged our government and our economy so that they take home the big profits, while the workers who create the wealth are squeezed to maximize work and minimize pay. We can and should have an economy where workers take home a fair share of the wealth they create, and this bill is a critical step toward that vision.

In recent decades, workers’ productivity has skyrocketed, but average wages have stagnated — driving increasing income inequality throughout America, the senator said. Merkley fought to include a provision in the 2010 financial reform bill that required public companies to reveal the wage gap between their CEOs pay and the median worker’s salary.

In 2018, this data revealed that the average CEO of an S&P 500 company now earns 287 times the pay of their median employee. Fifty years ago, that ratio was 20 times.

Merkley’s legislation, which will be formally introduced when the Senate comes back into session the week of Sept. 9, would impose increasingly steep surtaxes on companies with the widest gulfs between the CEO and worker pay. Specific penalties would be calculated as follows:

 

If the CEO-to-median worker pay ratio is…

Then the applicable surtax rate is…

Over 30:1 but not over 50:1

2%

Over 50:1 but not over 100:1

3%

Over 100:1 but not over 200:1

4%

Over 200:1 but not over 500:1

5%

Over 500:1 but not over 1,000:1

6%

Over 1,000:1

10%