According to the AFL-CIO, the largest union federation in the United States, the wage gap between managers and employees will widen from 2024 to 2025, with CEOs earning 312 times the average annual salary of their employees.
This is up from the previous level of 285 times the median employee salary for executives working at companies listed on the S&P 500 index.
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The numbers were released Thursday as part of the AFL-CIO’s annual PayWatch report, which tracks the growing wage gap.
Unions warned that the pay gap risks having far-reaching implications for global markets. The AFL-CIO warned that if CEOs focus on increasing their paychecks, they may become less concerned about the stability of their companies and the overall economy.
“Excessive CEO compensation is contributing to widening economic inequality,” the AFL-CIO writes. “That creates the risk that CEOs will make short-term decisions to maximize compensation, even if it hurts the long-term health of the company.”
The AFL-CIO explained that when determining executive-to-employee pay ratios, it needed to exclude one outlier: Elon Musk, the world’s richest person.
In 2025, Musk earned $158 billion as CEO of electric car company Tesla. This is 2.5 million times more than the company’s average employee. His salary was far below the company’s annual revenue of $94 billion.
In the same year, the automaker reported a 3% decline in revenue. Sales fell about 9% as some consumers boycotted the company over Musk’s participation in President Donald Trump’s second administration.
Tesla also faced 11 vehicle recalls last year, totaling 745,000 vehicles.
For the first half of 2025, Musk served as head of the Department of Government Efficiency (DOGE), which President Trump created to oversee federal workforce and spending cuts.
He also oversees several business interests outside of Tesla, including social media platform X and rocket company SpaceX.
With the initial public offering (IPO) of SpaceX stock in June, Musk’s net worth temporarily swelled, and he became the world’s first billionaire to be publicly listed, albeit for a short period of time.
Including Mr. Musk, the average pay of chief executives at S&P 500 companies soared 1,700 percent last year to $3.1 billion.
Excluding Mr. Musk, the rate of increase was slightly slower. The average CEO salary in 2024 was approximately $19 million, increasing by 21% to $22.8 million in 2025.
This amount is almost double the average compensation package for a chief executive officer 10 years ago.
Uneven distribution among industries
However, depending on the industry, the ratio of executive income to employee income differs.
The largest pay gap was in manufacturing, where CEOs earned an average of $696 million and the average worker in the industry earned just over $93,000.
This equates to a difference of more than 11,000 percent in their salaries. Tesla has the largest gap in this area, contributing to the higher wage ratio.
The industry with the second highest pay rate is the arts, entertainment, and recreation sector, where executives earn an average annual salary of $24.6 million, while employees earn an average annual salary of about $25,000. The difference was a ratio of 1,057 to 1.
One of the most notable examples of wage disparity is at the coffee chain Starbucks, where the average worker earned $17,279, just $1,629 above the 2025 federal poverty line.
CEO Brian Nicol earned more than $30 million last year, and experts estimate the company’s pay ratio is 1,794:1.
The AFL-CIO report also found that Amazon, Dollar Tree, FedEx, McDonald’s and Walmart employees are the largest recipients of social assistance programs.
Amazon CEO Andy Jassy earned 51 times more than the company’s average employee, and McDonald’s CEO Chris Kempczinski earned 1,082 times more than the average employee at the Chicago, Illinois-based fast food giant.
Revenues soar due to President Trump’s posts
Thursday’s report also examined President Trump’s income during the first year of his second term.
Mr. Trump’s campaign for office rested largely on his record as a businessman, and he has pitched voters as uniquely qualified to serve the nation’s economic needs.
But critics have accused him of profiting from his presidency through policies favoring business interests, including trademarks and cryptocurrencies.
According to the AFL-CIO report, President Trump’s income jumped 254% last year compared to his income in 2024, before he returned to the White House.
His $2.2 billion worth of income in 2025 came primarily from the Trump family’s cryptocurrency venture, World Liberty Financial, and the sale of meme coins.
According to the AFL-CIO, these earnings are approximately 43,154 times the median income of U.S. workers last year. Approximately 37 percent of U.S. adults cannot afford a $400 emergency expense.
This comes as U.S. consumer confidence has fallen by 8% and consumers are increasingly wary of the economy and their personal finances, according to a University of Michigan report released Friday.
The U.S. economy is also in a slump in the labor market, with the U.S. economy cutting 23,000 jobs in July, according to a monthly report from the U.S. Department of Labor’s Bureau of Labor Statistics (BLS).
The Conference Board, a nonprofit think tank specializing in economics, also revealed last month that confidence in the current state of the U.S. economy has been on the decline for three consecutive months.
