In 2024, CEOs at America’s leading companies saw pay increases that outpaced the wage growth of employees, widening pay disparities across the country and in Connecticut, according to a new report released by the nation’s largest collective of labor unions. 

In its annual Executive Paywatch report released last week, the AFL-CIO found that CEO pay at S&P 500 companies increased 7% in 2024 to an average of $18.9 million in compensation, while median worker pay increased 3% over the same period. The report found that the average CEO pay was 285 times higher than national median worker pay of $49,500, up from the 268-1 ratio the report found last year. 

When it comes to executive compensation, the “average CEO pay is growing and fueling economic inequality,” the report notes. 

While the pay disparity between CEOs and workers differs by industry and region, disparities are seen nationwide, including in Connecticut, which has seen rising inequality as extreme wealth and poverty exist in close proximity, according to the report.  

The numbers in the report are not an apples-to-apples comparison, however. The report looks at average CEO compensation, which can include CEO salary, bonuses, stock options, and other incentives. For workers, the report uses data on median pay, not average pay, from the U.S. Bureau of Labor Statistics. Average calculations can be highly swayed by extreme outliers, where median calculations are less susceptible to extremes.

A recent analysis by the Associated Press of 344 executives of companies in the S&P 500 and found a median CEO pay of $17.1 million.

Also, the worker data focuses on the annual median wage for workers across all occupations. This data does not include the cost of additional employee benefits like health insurance and retirement accounts, and it includes part-time workers. 

Still, the AFL-CIO argues that the report offers helpful insights into disparities between the country’s highest earners and people making far less. Other research into CEO and worker pay, including an annual study by the Associated Press, has also found evidence of a significant pay gap that has grown considerably wider since the 1980s. 

“These numbers only begin to scratch the surface of how runaway executive pay is fueling economic inequality,” Fred Redmond, the AFL-CIO’s secretary-treasurer, told reporters last Wednesday.

The federal budget reconciliation bill signed into law earlier this month could widen the gap even more, the report claims. Under the new law, tax cuts first enacted in 2017 will be made permanent. The law also cuts funding for social safety net programs like Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. 

The report estimates that, with the tax cuts, the average S&P 500 CEO could save around $489,000 a year. A worker making between $53,300 and $92,000 a year, meanwhile, would save roughly $1,510 a year under the tax cuts. 

“In order to give massive tax cuts for the wealthy, this budget increases the deficit, will kill jobs, make health care more expensive and create a long wake of economic pain for the rest of us,” Redmond said. 

CEO-worker pay disparities in Connecticut

The AFL-CIO report provides a range of data on CEO and median worker pay, including breakdowns by industry and by state. 

The report shows that 14 Connecticut S&P 500 CEOs earned an average of $19.5 million and a median of $17.9 million, while the median worker in the state made $58,400, creating a 334-1 ratio between the two. The 66 chief executives of all Connecticut companies listed in the report had an average salary of about $9 million and a median salary of about $6 million.

When the AFL-CIO broadened the numbers to include CEOs outside the S&P 500, it found that Connecticut CEOs in its data set collected an average of $8,516,044. The disparity between CEOs and the median worker decreased to 146-to-1. 

The AFL-CIO report adds another point to a growing pool of data highlighting income and wealth inequality in Connecticut, which despite having a higher median household income and higher median wage than many states, has still seen significant disparities between its highest earners and everyone else. 

Last week, a report from the nonprofit CT Voices for Children examined how the state’s stagnant job growth, high number of unfilled job openings and labor force declines could be boosted by making wages fairer and reducing wage inequality. The organization argued that increasing wages, especially for lower and middle class earners, could help make the state more affordable for working families.

Another report released earlier this month by the National Low Income Housing Coalition, which advocates for affordable housing across the county, offered insights into the growing gap between wages and rental housing costs in the state. 

In the 2025 edition of its annual “Out of Reach” report, the NLIHC found that many workers struggle to afford housing across the country, and that “resources for affordable housing remain insufficient to support the nation’s lowest-paid and lowest-income renters,” a group that is disproportionately likely to be female, Black, Native American or Latino.

This is also true in states with higher minimum wages like Connecticut, which raised its minimum wage to $16.35 earlier this year. 

Despite that being far higher than the federal minimum wage of $7.25, it still isn’t enough to afford a one or two bedroom apartment in the state. The NLIHC notes that a Connecticut worker would need to make $28.68 per hour to afford a one-bedroom at the HUD fair market rent rate of $1,491. To afford a two bedroom at a fair market rent of $1,842, the same worker would need to make $35.42 per hour — over two times the state minimum wage. 

The report finds that the difference between wages and housing costs make Connecticut the 11th most expensive state for housing in the country. Without higher wages or more affordable housing, single minimum wage and lower-income workers must work more hours, in some cases more than 80 hours a week, to afford housing in the state.

Chris DiPentima, president and CEO of Connecticut’s Business and Industry Association, did not directly respond to a request for comment about the wage disparities highlighted by the recent reports. But DiPentima noted in a statement to The Connecticut Mirror that while the state’s higher median wage and its educated workforce are an asset, it also faces a labor force decline that must be addressed.

For DiPentima, addressing that issue will require a multifaceted approach, one that includes improving affordability in the state.

“The high cost of living is a significant impediment for Connecticut’s workforce,” he said. “It’s critical that public and private sector leaders work closely and identify creative, sustainable solutions for making this a more affordable and attractive place to live, work, and do business.”