Question

In 2010, average CEO pay was 319 times higher than the average employee’s pay, according to the Institute for Policy Studies. In 1980, CEO pay was only 42 times higher. Discuss possible reasons for this tremendous increase in CEO pay and analyze the ethical implications.

Answer 1

There are so much difference happens at the time of 1980 and 2010 in world global economy. At the period of the 1980s, most of the countries were coming out from colonization and struggling to build the economy like the countries of India, Vietnam etc. Some other countries like Zimbabwe, Brunei etc were still mugging under colonization at this period so the economy is completely limited and there is no chance to enhance at home and international market. So, this particular period CEO of firms or organizations have only 42 times higher than the normal/average employee due to the limited opportunities in the economy.

In the period of 2010, almost all the countries got freedom and doing the trade with across the globe. It is really a great significant change for all the countries to enhance the market at home and international. The FDI(Foreign Direct Investment) done in countries like India, Afghanistan etc by other foreign countries like U.S and U.K etc. So, the market limits enhance and getting good profits to all the countries. This is really a great advantage for under developing countries to reach the developed nation. The CEO got 319 times higher than the average employee due to the globalized economy. The Globalization is the major change in the economy so the CEO’s pay was higher to 319 times in 2010 compared to the period of 1980 was only 42 times.