April 23rd 2024.
April 20th is the day when many people celebrate and enjoy marijuana, even though it's not an official holiday. While the marijuana industry is becoming more mainstream, there is still a concerning issue of pay disparities within the industry. It's expected that by the end of 2024, sales of cannabis will reach a staggering $31 billion. However, this growth comes with its own challenges and difficulties.
According to Truman Bradley, the executive director of the Marijuana Industry Group, the industry is facing a major struggle and is in dire need of a regulatory overhaul. He believes that without changes, more small business owners in the cannabis industry will be forced to close their doors and lay off their employees. This statement was made to Business Insider back in 2023.
Fast forward to a year later, and it's clear that income inequality has become a prominent issue in the industry. As with many other industries, there is a significant gap between the salaries of CEOs and the salaries of store employees. In 2023, the average pay for a cannabis CEO was $402,350, while budtenders, the employees behind the counter at smoke shops and dispensaries, took home an average of $42,000 a year. This pay gap, also known as the CEO-worker pay gap, is a worrisome sign for any business.
In 2023, ESG Dive reported that an analysis of 100 S&P 500 corporations with the lowest median worker pay in 2022 revealed an average CEO-to-worker pay ratio of 603 to 1. Similarly, the Economic Policy Institute found that wage disparity has only worsened over the years, increasing from 21 to 1 in 1965 to 344 to 1 in 2022. According to Sarah Anderson, the global economy policy director at the EPI, there needs to be a collaboration between voters, workers, and shareholders to address these imbalances in pay.
On November 13th, 2019, Sen. Bernie Sanders proudly announced the introduction of the Tax Excessive CEO Pay Act alongside Rep. Barbara Lee and Rep. Rashida Tlaib. The bill aims to raise taxes on corporations based on the gap between the salaries of their CEOs and their median workers. As Sanders puts it, if companies can't understand why it's absurd to pay their CEOs more in a year than their workers will earn in a lifetime, then maybe this bill will help them figure it out.
In March of 2021, Our Revolution shared a tweet from More Perfect Union, revealing that if the Tax Excessive CEO Pay Act had been in effect in 2022, companies like Walmart, Google, and Home Depot would have had to pay significantly more in taxes. This highlights the impact that the bill could have on addressing pay inequality.
In January of 2024, the Tax Excessive CEO Pay Act was reintroduced by Sens. Bernie Sanders, Elizabeth Warren, Ed Markey, and Chris Van Hollen, along with Reps. Barbara Lee and Rashida Tlaib. The bill is designed to combat rampant pay inequality by forcing CEOs whose pay is 50 to 100% more than their median employee salary to pay more in taxes. If the CEO is not the highest-paid employee, the executive with the largest paycheck would be used to evaluate the company's pay inequality.
According to Van Hollen, the growing gap between millionaire and billionaire CEOs and their workers is not only unfair, but also harmful to the economy as a whole. And Rep. Tlaib believes that it's time for the rich to pay their fair share, especially when their companies continue to make record profits by exploiting the labor of their workers. This issue of pay inequality is not only prevalent in the cannabis industry, but in many other industries as well. It's time for companies to prioritize fair and equal pay for all employees.
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