Reality may not be what ‘average’ implies
When the Star Tribune reported the personal income in Minnesota to be $46,227 per person in 2012 (“Minnesota outpacing U.S. with income rise,” March 28), it should have described how that figure is calculated. Per capita personal income equals “the total amount of income earned by residents of a state divided by that state’s population.” It is therefore an average or mean value, and, as a result, can be quite misleading.
Since an individual’s income cannot be less than zero but there is no limit to how great it can be, a relatively small group of people with extremely high incomes can significantly inflate the average. If four people make $10,000 and one person earns $1 million, for example, the average is $208,000, but the median is only $10,000! How about telling us the “median” personal income for Minnesota and the rest of the country? Sadly, most readers probably don’t have a strong enough background in mathematics to understand the difference, but that’s a topic for another day.
Thomas C. Bretl, Plymouth
It’s wearying to see what CEOs rake in
Please stop reporting the CEO Pay Watch in your Business section — I can’t take it anymore. The new guy at 3M received almost $2 million for a partial year (coming on board at the end of February). Additionally, he was given $4 million in stock awards and $3 million for option awards. The compensation committee did all this to “recognize his successful first year as 3M’s CEO. Then, we also got to read about the outgoing CEO, who was given $30 million for working during January and most of February (good thing he left when he did).
I’ve been reading these Pay Watch deals for the last few months, and can only wonder why shareholders don’t rise up and demand their compensation committees stop giving away the farm to these folks. Business performs well when there’s a good product and a demand for that product. To believe that the CEO is responsible for the profits of companies like 3M is not only naive, but infuriating to at least some of us stockholders.
Jim Stromberg, White Bear Lake Township
• • •
The March 28 Short Takes calling the $200,000 pension of U.S. presidents “generous” and suggesting that they be asked to do more to earn it was disrespectful and ridiculous.
In the same issue, the CEO Pay Watch reported the year’s $39 million take by 3M’s CEOs, most of it taxed at the 15 percent rate.
The size of 3M seems minuscule in contrast to the role of the U.S. presidency. This is an everyday example of the extreme inequality growing in this nation. Readers seem not to take issue with this specific corporate greed, but workers, who are given no credit for the success of overpaid CEOs, seem to be venting a rising fury. It is evident in multiple media and social networks. Clearly, wise leaders need to pay heed.
Donald Strei, Elk River
* * *
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.