Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data -- without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries … In the five years ending in 2007, earnings for American workers rose 24%, half the 48% gain for the top-paid. The result: The top-paid represent 33% of the total, up from 28% in 2002.
Kevin follows up with:
You probably thought that the big problem with skyrocketing executive pay was the fact that it left nothing for the rest of us. And you're right: that 24% increase for "American workers" includes the 48% increase for the top earners. In other words, the executives got a 48% increase, the rest of us got approximately nothing, and it all averaged out to 24%.
There may be two problems here. Kevin is taking a simple average of 48% for the wealthy one-third and zero for the rest of us to get this 24% overall average but that’s not quite right. A weighted average where one-third received a 48% increase and two-thirds received a 12% increase is more in line with the overall increase being 24%. But if the rest of us received a 12% increase in how nominal wages over this five-year period, how does that compare to the increase in the consumer price index? If one compares the CPI as of December 2007 to the CPI as of December 2002, the increase in CPI was over 16%. In other words, those who were not highly compensated may have seen their nominal wages rise slightly but in real terms, wages declined.