Type to search

Report: Restaurant CEOs Make 721 Times More Than Their Minimum-Wage Employees

Economy Memo Pad

Report: Restaurant CEOs Make 721 Times More Than Their Minimum-Wage Employees


A new report from the Economic Policy Institute highlights the widening earnings gap between minimum-wage workers and restaurant CEOs.

According to the EPI, a full-time employee making minimum wage will earn $15,080 — below the 2013 and 2014 federal poverty lines for a two-person household — over the course of a full year.

Compare that number to the average $10,872,390 that a top restaurant CEO earned in 2013. As the report explains, this means that a restaurant CEO, on average, earned 721 times more than the average minimum-wage worker.

Alarmingly, that 721-1 ratio is much higher than that of just eight years ago. Back in 2006, the ratio of restaurant CEO pay to the minimum wage was 609-1. That gap actually narrowed dramatically just two years later, when Congress passed the most recent minimum-wage hike; that left the ratio at approximately 250-1. After 2008, however, it continuously widened, and peaked between 2011 and 2012.

As demonstrated in the chart below, 2013’s 721-1 ratio is among the largest gaps of the last decade.

EPI Minimum Wage Restaurant CEO chart

One of the first steps towards narrowing the gap would be raising the minimum wage again. CEOs’ pay — which relies more heavily on other economic factors — may continue to rise, but a minimum-wage hike would drastically improve the lives of restaurant employees who often depend on federal safety net programs to provide for themselves and their families.

Many economists and lawmakers — most of whom lean left, such as President Barack Obama — continue to argue for a higher minimum wage to combat the negative economic and social implications of income inequality in the U.S.

Among opponents of a minimum-wage increase, however, is the National Restaurant Association, which represents the CEOs included in the EPI study.

According to the group, a federal minimum-wage hike would force restaurateurs to “limit hiring, increase prices, cut employee hours or implement a combination of all three to pay for the wage increase.” And as several states and even cities across the nation increase their minimum wages on their own — Seattle just passed legislation that will increase its minimum wage to $15 an hour over the next seven years — franchise restaurants warn that the measures are detrimental to businesses and jobs.

But the U.S. Department of Labor calls those claims “myths,” pointing out that employers in California “are required to pay servers the full minimum wage ($9 per hour beginning July 1) – before tips,” and “even with a minimum wage boost coming this summer, the National Restaurant Association projects California restaurant sales will outpace the U.S. average in 2014.” Also, while “employers in San Francisco must pay tipped workers the full minimum wage of $10.74 per hour — before tips,” the Bureau of Labor Statistics still finds that the San Francisco restaurant industry has “experienced positive job growth over the past few years.”

A Congressional Budget Office report also finds that while 500,000 jobs may be lost, a federal wage increase could lift 900,000 Americans out of poverty.

Speaking on the wage hike passed in Seattle, McDonald’s CEO Don Thompson reluctantly gave the increase his stamp of approval.

“McDonald’s will be fine. We’ll manage through whatever the additional cost implications are,” Thompson said in May. If other restaurant CEOs could accept that, they too would “manage,” even if they had to pay their employees just a few dollars more.

Photo: The All-Nite Images via Flickr

Chart via Economic Policy Institute



  1. johninPCFL July 3, 2014

    Businesses hire people because their service commitment to their customers demands it. They don’t hire because “times are good”, they don’t fire because “times are bad”, they keep a workforce necessary to supply their customers unless they are going out of business. “limit hiring, increase prices, cut employee hours or implement a combination of all three to pay for the wage increase.” is nonsense unless the owners are picking up the slack or the business is folding.

    1. DurdyDawg July 3, 2014

      That’s because they pay way too much to upper management and depend on the g’ment to bail them out because they’ve manipulaed the letter of the law and became non-profit using all the profits to pay their upper staff.. I’m in no way pointing fingers at the average businessman/owner, but rather toward corporations that believe they are too large to fail and of which most of us work for..

      1. Allan Richardson July 5, 2014

        The truth is that most conservative “pro-business” policies are actually “pro-established-big-business” and thus “anti-small-new-business.” Case in point: eliminating neutrality on the internet.

    2. Allan Richardson July 5, 2014

      And why does demand go down? Because the CEOs of all the OTHER corporations are downsizing their staffs and making the rest work more for less money, so the MAJORITY of people have LESS MONEY to spend to generate demand that will generate more jobs and higher wages. This is what Henry Ford told his competitors when they complained about his paying higher wages: he wanted his employees to be able to BUY one of the cars they helped to build.

  2. Elbert Dempsey July 3, 2014

    I just don’t understand why they don’t pay the executives minimum wage and give all the workers executive pay. I’m so stupid, I must be a liberal Democrat.

    1. Peoples425 July 3, 2014

      You must be a moron….

    2. Peoples425 July 3, 2014

      The goal of the article was to show that the exorbitant gap between the rich and poor continues to widen with those at the corporate heads not really caring just how they pay and/or treat their labor. It essentially is arguing against the capitalist structure of getting rich off of the backs of the poor that can barely afford life essentials.

      1. Elbert Dempsey July 4, 2014

        The goal of the article was to whine, the great American sport. A little economics for you. Every year these big corporations open hundreds or thousands of new locations. The executive has more and more responsibility for running more units every year. The people at the bottom never get any new responsibilities. Every year they flip the same burgers and whine.

  3. herchato July 3, 2014

    Yes, the American people have been spoiled and gotten soft. They don’t need more money to live they would just blow it on frievelace

    1. DurdyDawg July 3, 2014

      How much harder can you work in order to provide for your family? Two jobs? Three? That’s he only alternative to work harder because if you fail to give 100% on any one job you get fired so ‘work harder’ has to mean more jobs and in the mean time these ‘christian’ owners continue to gain in profit from YOUR hard work while arguing to the g’ment that $10.10 an hour for minimum wage cuts that much more into their multi-million dollar salaries. B’ness is trying to help ONLY themselves .. If you investigated what each employee makes for their bosses and what the bosses do with these profits then you’d understand why there’s so much anger. These people pull in millions of dollars as salaries which would never happen if the companies weren’t profiting in the billions.. By taking only a small percent of this yearly windfall to pay bonuses to those who contributed to their wealth, it would be a much better world we live in and we wouldn’t have to look forward to what might happen after we’re gone while being used and abused by soulless suits while we live..

      1. herchato July 5, 2014

        Sorry Dawg I was being sarcastic. I agree with you. Lol

  4. charles king July 3, 2014

    Critical Thinking between the “Owners and the Workers” should be able to solve this problem, I would think a owner Who’s? business is doing well should be able to satisfy its workers, if Not then he should have his ass kicked a couple of times. Democracy is about all of its people Not just some the people better start asking Where? is their Democracy cause MONIES has caused great devide in Our Country. Greedy Capitalistic Pigs, Plutocracts(Commissioners), Republicans And Democracts Representives Do-Nothingiers,Supreme Court Justices, Etcs. What? the hell is going on in the country. Remember the VOTE is still Supreme, so VOTE their sorry A****** OUT. Thank You are the magic words in my book. I Love Ya All. Mr. C. E. KING

  5. DurdyDawg July 3, 2014

    As terrible as it’s put to us.. As unfair as it seems, I don’t look at CEO’s and top brass’ pay as ‘salary’ and neither should you.. Fact is the corporations and the humpers within it does (what they should do for ALL employees) and that is to pay them a percentage in relation to how much their hard work profited them.. That’s the way they determine salaries for upper management.. If you make them a billion dollars it’s only fair that they pay you a small percentage of the profit which in this scenario (because we’re talking a 1 billion dollars) they reward the top man up to 5% but it shouldn’t stop at the top..

    … With this windfall those under him (who contribued to HIS wealth) should receive a small percentage of what he received (say 1/2 to 1%) thus he received 50 million dollars and his staff received from 2.5 to 5 mill.. They in turn would ear mark 5% of their salary to pay the employees who helped them attain their profit thus say with 100 employees who contributed they would receive (along with base pay beyond minimum wage).. between 25 to $50,000.00 (from the janitor to the leads).. also split into 52 weeks giving everybody a fair pay for fair work. This of course in a perfect environment where each executive cared about his fellow worker. That this doesn’t happen is the cause of our contempt, knowing that these toads actually believe that they achieved what they received all by themselves.

    Minimum wage is a g’ment regulation and from what I’ve experienced recently, everybody wants to eliminate big g’ment.. Minimum wages should be limited to high school kids and inexperienced agricultural workers, it should not apply in the average work force..Wanna eliminate g’ment from your life? Start here.. If you pay more than minimum wage then the g’ments hands are tied, they can no longer prod and bully you because you are paying more to your employees than the g’ment says you have to pay.. This is a start.. and it could all be accomplished with just a small fraction of your profit base.. Instead of trying to eliminate g’ment intervention into your business in order to make it fair, go beyond that minimum level and in due time the g’ment will close it’s own doors because you as an employer are paying your people more than the g’ment requires. You then will be seen as a great boss, your company will expand because of contented employees who want to work and the g’ment will be out of your life (at least in this issue).

    1. Allan Richardson July 5, 2014

      Your philosophy worked so well in the 1880s, right?

  6. FAMULLAR July 4, 2014

    AND WHEN IT COMES TO THE HIDDEN VEILS WE HAVE PROBLEMS UNTOLD The generality of the judgment opens the way for other European governments to follow suit. Belgium enacted such a law three years ago; some cities in Spain and Italy have their own by-laws. Other governments, including our own, may feel that enacting such legislation could be dangerously counterproductive, driving a section of the population that already feels alienated and perhaps unwelcome even further from the mainstream.

    I can well imagine, though, that the judgment from Strasbourg will encourage opponents of the full-face veil in Britain to lobby for legislation here. This may help to explain why ministers seem to have played it down. Recent surveys suggest that a large majority of the population would support a ban – and, I admit, I would be among them – for the very same social and cultural considerations as cited by the judges in Strasbourg.

    It does not seem unreasonable to expect those who choose to settle in Britain to observe the prevailing social norms, whether that is not throwing your rubbish from your balcony; being married to one wife at a time; not having your daughters “cut” – or not covering your face.

  7. FAMULLAR July 4, 2014

    Commonwealth Bank of Australia chief Ian Narev has apologised for breaching customer trust after evidence emerged of serious misconduct by the bank’s financial planning arm, Commonwealth Financial Planning Limited (CFPL).

    In a press conference, Mr Narev said the bank would form an Open Advice Review program, which will give customers a chance for compensation.

    “They failed in their primary obligation – to act in the best interests of our customers,” Mr Narev said.

    “Poor advice provided by some of our advisers between 2003 to 2012 caused financial loss and distress and I am truly sorry fo

  8. Bob Williams July 4, 2014

    Well, it seems like the answer is really quite simple. Start your own company and be your own CEO. Case closed.

    1. Allan Richardson July 5, 2014

      You could start a restaurant serving roast unicorn!


Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.