What about “excessive dentist pay” or the obscene “orthodontist-to-average worker pay” ratio?

From Mark Perry.

"Business Insider had a post yesterday titled “This epic chart shows the average wage for almost every job in America,” based on Reddit user Dan Lin’s chart showing the average annual wages in 2013 for more than 800 US occupations tracked by the Bureau of Labor Statistics. The chart featured by BI has actually been circulating on various blogs and websites for the last year (see examples here, here, and here), and new BLS wage data are now available for 2014.

Regardless, the top 20 highest-paid occupations for 2013 are displayed above and help illustrate a few important points about chief executive (CEO) pay:

1. CEOs in the US earned an average annual wage in 2013 of $178,400 and ranked No. 10 by occupation for the highest average annual wages in that year, behind nine medical occupations including psychiatrists ($182,700), family practice MDs ($183,900), internists ($188,400), orthodontists ($196,300), and anesthesiologists ($235,100).

2. CEOs earned only about $13,800 (and 8%) more than the average dentist ($164,600) in 2013, which works out to an hourly difference of $6.63 ($85.77 per hour for CEOs vs. $79.13 for dentists), assuming a 40-hour workweek. No offense to dentists, but if we realistically assume that the average CEO might have a longer workweek than the average dentist, the average CEO earns less per hour than the average dentist: e.g. $76.24 for an average 45-hour CEO workweek and $68.62 for a 50-hour CEO workweek.

3. Based on 2014 wage data, the CEO-Dentist wage difference shrunk because the annual wages of the average dentist increased by almost 4% last year to $170,940, while the wages of the average CEO increased by only 1.29% to $180,700, which was actually below the 1.6% annual rate of inflation from 2013 to 2014. In 2014, the average CEO earned less than 6% more than the average dentist, a difference of less than $5 on an hourly basis. If we assume an average CEO workweek of 42.5 hours vs. 40 hours for a dentist, the average CEO made less per hour last year than the average dentist.

Bottom Line: These are pretty easy questions to answer, but let me pose them anyway: Why don’t we ever hear about “excessive” or “obscene” dentist/family practice MD/internist/psychiatrist wages? Or about objectionable “Dentist-to-Average Worker Pay” ratios?

Of course, there are some CEOs who earn multimillion dollar pay packages, while there are probably no dentists making millions of dollars per year, so it’s the “excessive” pay of a few hundred outlier CEOs that gets all of the media and union attention. But it’s an important point that gets completely lost in the discussion of “obscene” CEO pay – the average CEO earns just slightly more than the average dentist and less on average than nine medical occupations that are listed above.

HT: Steve Bartin

Related Bonus Quotation of the Day:

From Ayn Rand, writing in her 1966 book Capitalism: The Unknown Ideal, p. 60-61 of the chapter “America’s Persecuted Minority: Big Business” (emphasis original):

Businessmen are the one group that distinguishes capitalism and the American way of life from the totalitarian statism that is swallowing the rest of the world. All the other social groups – workers, farmers, professionals, scientists, soldiers – exist under dictatorships, even though they exist in chains, in terror, in misery, and in progressive self-destruction. But there is no such group as businessmen under a dictatorship. Their place is taken by armed thugs: bureaucrats and commissars. Businessmen are the symbol of a free society – the symbol of America. If and when they perish, civilization will perish. But if you wish to fight for freedom, you must begin by fighting for its unrewarded, unrecognized, unacknowledged, yet best representatives – the American businessmen."