Paul Hodgson, a senior research associate at the executive compensation watchdog group The Corporate Library, attributed the gap to another factor: the use of stock awards in CEO pay. Notwithstanding the recent financial crisis, stocks have seen tremendous gains since the 1980s and that, he said, has been reflected in CEO compensation.
As a result, he said, "CEO pay has been growing exponentially while everyone else's wages have been growing arithmetically."
Companies that shell out blockbuster salaries and benefits maintain that high compensation is necessary to attract the best talent to top positions.
In Chicago, in recent years the compensation issue has centered largely on so-called big box stores like Walmart. In 2006, the city's mayor vetoed a resolution by the city council to raise minimum hourly pay by giant retailers in the city to $10 plus $3 worth of benefits.
This week's approval of the new Walmart store came despite demands by labor organizers that Walmart, a non-union company, should pay at least $11 an hour to new employees. Walmart countered that the $8.75 it plans to pay -- which is 50 cents above Chicago's minimum wage -- is more than the starting hourly wages of unionized grocery store workers in the area.
An organizer for Local 881 United Food and Commercial Workers declined to comment on wages for union members, citing ongoing contract negotiations, but said that, overall, members receive better health insurance and retirement benefits than Walmart employees. (In its defense, Walmart said its health insurance plans offer "a wide range of options" and trumpeted its 401k and profit sharing plans.)
Smith said he ultimately decided to join his fellow aldermen in unanimously voting to allow the Pullman store because of the jobs the store is expected to create and its addition to the city's tax base.
He, too, would have liked to see the retailer pay at least $11 an hour to new employees, but added that he's glad Walmart's $8.75 starting pay is above minimum wage.
"As Kenny Rogers says, 'You gotta know when to hold them and know when to fold 'em,'" Smith said. "So that's what we did."