Smart SpendingSmart Spending

Fast-food CEOs paid 1,000 times more than workers

America's fast-food industry leads the pack when it comes to company-level pay disparity.

By MSN Money Partner Apr 28, 2014 2:21PM

This post comes from Krystal Steinmetz at partner site Money Talks News.

Money Talks News on MSN MoneyIf you want a glimpse of super-sized pay inequality, look no further than America's fast-food industry.

Nowhere is company-level pay disparity more apparent than in fast food, where CEOs reportedly take home $1,000 for every $1 earned by their typical employee.

Fast-food worker © Creatas/PictureQuest"Fast Food Failure," (.pdf file) a new report by public policy group Demos, highlights the growing chasm between CEOs and their lower-rung workers. According to The Huffington Post:

"It's true in many industries but fast food is the primary example: The gains from economic growth are being entirely awarded to people at the top of the income scale," Catherine Ruetschlin, author of the report, told HuffPost. "It's not a surprising finding that it's the worst industry within the worst sector, because that's where we're seeing the cracks forming."

It's expected that CEOs make more than their rank-and-file employees, but a 1,000-to-1 pay ratio is excessive, to say the least.  On average, fast-food CEO compensation has quadrupled since 2000, with averages coming in about $23.8 million. Front-line workers have hardly fared as well, the report said:

After the Great Recession ended in 2009, CEOs captured the tide of economic growth with impressive rapidity. Executive pay recovered and outstripped previous levels within a single year.
Workers, though, were left out of these gains. Since 2000, the average fast-food worker has seen her total compensation climb by just 0.3 percent in real terms, and in 2013 was still making less money than before the recession. As a result of the trends for both components of the CEO-to-worker ratio, fast food stands out for its extreme imbalance in compensation practices.

Last week, we told you about a new study that found that CEOs at the 20 largest members of the National Restaurant Association took home more than $662 million in tax-deductible compensation over the last two years. The companies then took advantage of a tax loophole that allowed them to reduce their tax bills by about $232 million.

The Demos report points out that the extreme income disparity it found is risky business for fast-food companies. According to

"The negative consequences are surfacing as operational issues, legal challenges, and diminishing worker and customer satisfaction," said Catherine Ruetschlin, Demos policy analyst and author of the report.
"Even the industry leader McDonald's has acknowledged that rising inequality is a risk to their bottom line. These performance issues can manifest in reduced shareholder returns, but the problems extend beyond fast food to the rest of the economy."

Perhaps even more troubling is the report's finding that low-paying jobs, like those in the fast-food industry, make up a big chunk of the job growth since the Great Recession. And looking into the future, low-paying, fast-food-like work will likely be among the top five occupations expected to add the most jobs through 2022. The implications for the overall economy are huge, the report said.

The increasing reliance on employment in these highly unequal industries will make it harder for working people to share in the gains of economic growth as more and more income becomes concentrated at the top.

I don't know about you, but this kind of thing really gets my blood boiling. It's intolerable to think that CEOs are OK with taking home multimillion-dollar pay packages, while paying their employees the bare minimum.

What do you think about the pay disparity between fast-food workers and their exorbitantly compensated CEOs?

More from Money Talks News

Apr 28, 2014 3:25PM

You can't even look me in the eye when you hand me my order that you got wrong, full of burgers that are only half on the bun, and covered in condiments that came from deep in your throat, but you expect to get paid as much as someone who has worked minimum 80 hours a week, has managed success after success and has always found a way to win.  You can be replaced by any high school dropout on the street, but with the CEO you are competing with every other major cooperation in the world for a leader in a high competition, low margin industry.  You have to have the best to survive.

Apr 28, 2014 7:16PM
So the CEO of 'Burger World' is responsible for  for 10's of thousands of workers, Millions of dollars of profit/loss and thousands of acres of real estate as well as lawsuits, P/R, labor issues, management, etc, etc, etc.
And the average line worker is responsible for...him or her self, and they screw that up fairly regularly.
ummm, ok...on second thought that 23.8 million looks like a bargain to me     
Apr 29, 2014 12:24PM
And ball players and coaches make thousands of times more than the ones throwing bags of peanuts.  So?  Maybe the answer is that there are tens of millions of people qualified to throw bags of peanuts and considerably fewer qualified to play ball and coach?
Apr 29, 2014 11:22AM
Are they comparing strategic and analytical thinkers and planners to somebody that flips burgers - typically high school students/ high school drop outs? Maybe if there wasn't such a disparity in complexity and scope there wouldn't be such a disparity in pay.
Apr 28, 2014 7:26PM
Absolutely no one is worth a thousand times more than anyone else regardless of the job.  My handyman is worth more than any CEO because he actually knows how to DO something besides count his money.

Apr 29, 2014 12:27PM
Because they are 1000 times more important to the success of the business.
Apr 28, 2014 4:03PM
This article is nothing more than a re-hash of the old communist/Marxist-ideology propaganda periodicals/papers. The first sentence sums up that fact and the article: "If you want a glimpse of super-sized pay inequality..." The media is nothing more than a propaganda pushing, sh*t-stirring cesspool.
Apr 28, 2014 9:12PM
Fast Food Restaurants.......the new "Sweat Shops".
Apr 28, 2014 4:27PM
I'm sorry but the other retards in this thread cannot compare what amounts to being a glorified book keeper with flipping burgers, and seriously say they deserve "1000" times more money. I don't care what big words you use, or ivy league school you went you. 
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.