Setting Limits: Ethical Thresholds to the CEO-Worker Pay Gap

Abstract

In the discussion about wage inequality, principles of fairness and need for incentives are juxtaposed as opposing motivations for wage inequality acceptance. While previous literature focused on ideal inequality, in one correlational and one preregistered experimental study (Ntotal = 473) we tested the hypothesis of a threshold of inequality acceptance. Participants were asked to indicate what a CEO should earn, ideally (i.e., ideal pay gap) and at maximum (i.e., highest acceptable pay gap), given the wage of a worker. Results showed that individuals generally indicated higher values for highest acceptable than for ideal pay gaps. In conclusion, these studies pave the way for new research on the cognitive and motivational underpinnings of attitudes towards economic inequalities.

Group Dominance, System Justification, and Hostile Classism: The Ideological Roots of the Perceived Socioeconomic Humanity Gap That Upholds the Income Gap

“…All of these variables contribute to justifying economic inequality and opposing egalitarian policies (Cervone et al, 2020;Jordan et al, 2020;Jost et al, 2003;Piff et al, 2020) by capturing related but distinct facets of how people understand differences among socioeconomic groups. On this matter, while SDO seems to capture people's desires and preference for hierarchies, SJ beliefs refer to people's understanding on how merit is ascribed as a function of personal effort, tolerance to inequality captures the extent to which people consider that inequality is a socially shared problem, and classism describe the attitudes towards those who have less.…”