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Seeing the "wide divide"

The report on booming executive pay in the NYT included an informative and entertaining graphic (read our previous commentary on whether good charts can be entertaining).  To see this super-sized graphic, click here.

This chart has numerous virtues, beginning with its ability to summarize and visualize a wealth of data.  Each point in the chart is a ratio of average executive pay to average work pay.  Each pay level is itself an average of much data on individual pay.  The graph tracks history all the way back to 1940 and thus allows us to see a long-term trend.

The key message is clear: the "wide divide" persists no matter which statistic one focuses on:

  • median (black line)
  • middle 50% (what statisticians call "interquartile range")
  • 90th percentile

Indeed, the inclusion of multiple statistics enhances the chart.  It puts into context, for example, the outlier data point (90th percentile) of 2000.

Although the text does not point this out, an important feature is the fast-growing, ever-worsening dispersion among the companies.  The median disparity has risen significantly but within a smaller set of corporations, the disparity has literally exploded.


Reference: Executive Compensation: A Special Report, New York Times.


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