ClaimsJeremy Grantham

“By 2006, this ratio had exploded to between 400/1 and 600/1, which can only be described as obscene.”

Jeremy Grantham, GMO letter author October 2009 Jeremy Grantham GMO letter 3Q 2009: Just Desserts and Markets Being Silly Again (Scribd)

This quote could not be matched word for word to the source page.

Factual Economics and markets

By 2006 the US CEO-to-average-worker pay ratio had risen to between 400/1 and 600/1.

Unresolvable The public record could not settle it.

Factual: Statements about the present or the past, checked against the record: did they hold up?

The second judge would not resolve this claim; the verdict shown is the first judge's.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

Judged as of October 2009, using credible published estimates of the US CEO-to-average-worker pay ratio for 2006 (for example EPI, AFL-CIO, Institute for Policy Studies, or academic series). True: the main published 2006 estimates lie within 400:1 to 600:1. Mostly true: the main estimates lie in the range and only a minor secondary estimate falls outside. Mixed: credible measures disagree, with some in the range and others clearly outside it. Mostly false: the leading estimate is just outside the range (between 380 and 400 or between 600 and 620). False: the credible 2006 estimates lie clearly outside the range (below 380 or above 620).

Set before the research began.

Evidence (6)

  1. E1 EPI Study Examines Sky High CEO Pay - IAM Union IAM Union (citing Economic Policy Institute) · 29 June 2006

    “CEO’s in the U.S. earned an astounding 262 times the pay of the average worker in 2005, the second-highest level in 40 years, according to the Economic Policy Institute (EPI).”
  2. E2 AFL-CIO Slams Big Bucks Pensions CBS News · 7 April 2006

    “Trumka said average executive pay at a company on the Standard & Poor's 500 is already more than 400 times the average worker's wages.”
  3. E3 Executive Excess 2006 Institute for Policy Studies and United for a Fair Economy · August 2006

    “Over the next two decades, as pay gaps rose from the 35-to-1 ratios that typified the corporate pay scene in the 1960s to 200-, 300-, even 400-to-1, Drucker remained committed to his earlier standard.”
  4. E4 CEO-to-worker pay imbalance grows Economic Policy Institute · 21 June 2006

    “In 2005, the average CEO in the United States earned 262 times the pay of the average worker, the second-highest level of this ratio in the 40 years for which there are data.”
  5. E5 US Defense And Oil Company Executives Reap Windfalls From Iraq War | Countercurrents Countercurrents (reprinting World Socialist Web Site) · 15 September 2006

    “In the period following 1990, one dominated by unprecedented deregulation and globalization, executive pay soared while workers’ wages by and large stagnated, generating a pay gap of 411-to-1.”
  6. E6 Nine Years of Neglect: Federal Minimum Wage Remains Unchanged for Ninth Straight Year, Falls to Lowest Level in More than Half a Century, 8/31/06 Center on Budget and Policy Priorities · 31 August 2006

    “By 2005, the average CEO was paid 821 times as much as a minimum wage earner; this is the widest discrepancy on record.”

Reasoning

The criteria require published estimates of the CEO-to-worker pay ratio for 2006, but the evidence gives 2005 figures (262 to 1 in [E4] and [E1], and 821 to 1 against minimum wage earners in [E6]), a post-1990 period measure of 411 to 1 [E5], and a spoken figure of more than 400 to 1 with no stated year [E2]. None of these is a 2006 estimate, so the evidence does not settle the claim under the criteria.

Cite this claim

Jeremy Grantham, “By 2006 the US CEO-to-average-worker pay ratio had risen to between 400/1 and 600/1.” (said October 2009). Verdict: unresolvable. Reliability API, claim c_464d6b6b08af, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_464d6b6b08af

This claim is in dataset release v1.1.2, with the same verdict.

Reply to this claim

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  4. Mostly true Factual 5 July 2023
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  5. Mixed Factual January 2023
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    In 1974 the US market turned up, after a 62% real decline over two years, exactly as the first Fed rate cut took place.

All of them

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