COMP NEWS – The CEO-worker pay gap has narrowed down from a chasm of 324:1 to a slightly smaller chasm of 268:1.

Aug 14 (Reuters) – (The opinions expressed here are those of the author, Ross Kerber, a columnist for Reuters.)

The gap between the pay of CEOs and their workers drew a notch narrower, a recent report showed, but don’t hold your breath for the trend to continue as labor markets soften.

The AFL-CIO, the largest federation of American labor unions, said last week the average S&P 500 (.SPX) CEO made $17.7 million in total compensation in 2023. For companies surveyed, the ratio of CEO pay to the median employee’s pay averaged 268:1, the report found.

That’s lower than in 2022 when the ratio was 272:1, or in 2021 when it stood at 324:1. You can read their full report here.

Everything will be fine right? Not so fast, based on my talks with some experts. CEO pay is often removed from long-term corporate performance, but labor economists pointed out that the pace of workers’ wage growth has slowed and tied to broader economic questions.

“The labor market isn’t as hot as it was two or three years ago,” said Justin Bloesch, a Cornell University economist. “Firms are staffed up and don’t need to hire as aggressively,” he said.

Bloesch referred me to data from the Federal Reserve Bank of St. Louis showing how as of July the average hourly earnings of U.S. production and nonsupervisory employees stood at $30.14, having risen steadily from where they stood in January 2020, at $23.91, just before the COVID-19 pandemic.

However the rate of increase has fallen over most of the same period. The same workers made 3.8% more last month than they had a year earlier, down from the 7% increase they had enjoyed in March 2022.