Over the past five decades, the divide between the compensation of average workers and CEOs has widened dramatically. According to the Economic Policy Institute, CEO pay has surged by 1,094% from 1978 to 2024, leaving the average CEO earning 281 times more than the average worker.
A recent report by the Institute for Policy Studies sheds light on this persistent disparity among some of the largest U.S. companies. The study highlights how low-wage workers at these corporations often depend on public assistance programs to make ends meet.
The "Low-Wage 20"
The report focuses on the S&P 500 and identifies 20 companies known as the "Low-Wage 20." This list includes familiar names from the retail and grocery sectors, such as Amazon, Walmart, Target, and Kroger, as well as AutoZone, Best Buy, Chipotle, Costco, Darden Restaurants, Dollar General, Dollar Tree, FedEx, Home Depot, Lowe’s, MGM Resorts, O’Reilly Automotive, Ross Stores, Starbucks, TJX, and Tyson Foods.
Amazon defended its pay practices, stating that its wages are well above the federal minimum and significantly higher than those of other retailers. The company emphasized that eligibility for public assistance programs like SNAP and Medicaid depends on total household income and size, not just individual wages. Amazon also reiterated its call for a substantial increase in the federal minimum wage.
Starbucks, in its statement, highlighted its competitive pay, industry-leading benefits, and career growth opportunities. The company pointed out that employees working just 20 hours a week receive comprehensive healthcare, equity grants, and tuition coverage, with all employees eligible for a matched 401(k). Starbucks prides itself on high employee retention rates and the large number of annual job applications it receives.
Other companies named in the report did not provide immediate comments when contacted by Fast Company.
Public Assistance as Corporate Welfare?
The 20 companies in the report collectively employ approximately 6.7 million people. Even the highest median wage among these companies does not exceed $48,000. While employers are not obligated to disclose how many workers use public benefits, the report reveals that many employees at these companies do not earn enough to cover basic needs.
In 2024, the median pay at 13 of these employers would have qualified a family of three for SNAP benefits, falling below the income threshold of $33,576. In Nevada, where state law requires the publication of Medicaid enrollment data for large companies, nearly 78% of Amazon and Walmart employees are on Medicaid.
The report argues that these companies effectively use public assistance as a form of corporate welfare by maintaining low wages. Sarah Anderson, the study's author and director of the Global Economy Project at the Institute for Policy Studies, asserts that taxpayers are subsidizing poverty wage business models.
Anderson contends that if wages were higher due to the absence of wage suppression and anti-union tactics, the current affordability crisis would be less severe. Higher wages would alleviate concerns about food and housing, she argues.
Many Workers Are Barely Getting By
Despite some companies raising hourly wages, Anderson notes that many continue to rely heavily on part-time and seasonal workers who are not entitled to healthcare benefits. Median pay, which includes part-time workers, provides a clearer picture of the financial struggles faced by employees at these companies.
Anderson's analysis also found that temporary wage increases during the pandemic did not last. In fact, median pay across the 20 employers dropped by 4.6% from 2019 to 2024, adjusting for inflation, from 29,087.
The reasons for these declines vary. At Costco, it was attributed to an influx of entry-level workers following pandemic-era turnover. FedEx saw a drop in median pay after significant layoffs. For other companies, the increase in part-time workers may be to blame.
CEO Pay Continues to Rise
While worker wages stagnate or decline, CEO pay continues to climb. For instance, Starbucks CEO Brian Niccol's total compensation exceeded 14,674. Starbucks clarified that part-time baristas' total compensation rose to 35,000 for full-time employees, and that the CEO's compensation was about $30 million in 2025.
Across all 20 companies, the average CEO pay was $18.6 million. The report highlights that at least 16 billionaires in the U.S.—half from the Walton family, heirs to Walmart—have built their fortunes on the labor of low-wage workers at these companies.
"These business leaders owe their wealth to the hard work of their employees," Anderson says. "Yet, many of these workers still struggle to get by and rely on public assistance."
The widening gap between CEO and worker pay underscores the need for systemic changes to ensure fair compensation and reduce reliance on public assistance programs. As the debate on affordability continues, addressing wage disparities and supporting workers must remain at the forefront of the conversation.