The Issue of Compensation and Its Repercussions on Society

2006 Words8 Pages
A very contentious issue arising within public domain is that of compensation and its repercussions on overall society. Over the past 3 decades executive compensation has ballooned while the average worker continues to see only modest gains in income. The average annual earnings of the top 1 percent of wage earners grew 156 percent from 1979 to 2007; for the top 0.1 percent they grew 362 percent (Kaplan, 2012). In contrast, earners in the 90th to 95th percentiles had wage growth of 34 percent, less than a tenth as much as those in the top 0.1 percent tier. Workers in the bottom 90 percent had the weakest wage growth, at 17 percent from 1979 to 2007. If inflation averaged just 2% a year over this period, the gains of the bottom 90% would be negative. In 2007, average annual incomes of the top 1 percent of households were 42 times greater than incomes of the bottom 90 percent, and incomes of the top 0.1 percent were 220 times greater. This is an increase of 1400% and 4700% respectively since 1979. These statistics do not bode well for the health care industry which is currently undergoing immense change. With the healthcare reform currently underway, many changes will be made to entitlements and overall compensation. Entry level workers in particular will have a fundamentally different compensation package then prior generations. Due primarily to a combination of excessive spending, deficit reductions, and an aging population, alterations to compensation will occur. The extent
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