Opinion | How the Public Purse Can Address Huge Pay Gaps for Low-Wage Workers at US Corporations

shows that 87 percent of Americans view the growing gap between CEO and worker pay as a problem for the country. And yet ordinary U.S. taxpayers are fueling corporations with huge pay gaps through the hundreds of billions of dollars in federal contracts and subsidies that flow every year to for-profit businesses.at the 300 publicly held U.S. corporations that had the lowest median wages in 2020.

These contractors’ average CEOs compensation rose from $7.7 million in 2020 to $13.0 million last year.Seventeen of the firms repurchased their own shares in 2021, with expenditures totaling $4.6 billion. Stock buybacks siphon artificially inflates the value of a company’s shares — and the value of their CEO’s stock-based pay.The corporations in our low-wage sample with the largest federal contracts come from diverse service, technology, and manufacturing sectors.

By contrast, Maximus CEO Bruce Caswell’s 2021 compensation totaled $7.9 million, 208 times the firm’s median pay and 36 times the salary of the top officials at the government agencies responsible for the company’s largest contracts. Maximus offers a prime example of how extreme pay gaps undermine enterprise effectiveness. A March 2022by the Communications Workers of America and the Student Borrower Protection Center revealed extensive Maximus mismanagement. The study found evidence of sloppy and potentially unlawful student loan servicing, unfair debt collection practices, and unlawful wage garnishments and public benefit seizures, sometimes even involving Social Security payments.

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