METERYou can buy happiness, but you can’t buy brains. A study published in January found that billionaires aren’t smarter than the rest of us; in fact, those in the top 1% earners scored lower on tests of cognitive ability than those who earn slightly less.
This is according to researchers who analyzed data from 59,000 Swedish men and then tracked their lives for more than a decade. They found a strong connection between how smart someone was and how much they earned, up to a salary of 600,000 kroner (£46,700) a year. After that, factors like luck, background, and personality became more important.
“Along one important dimension of merit, cognitive ability, we found no evidence that those with the best jobs that pay extraordinary salaries deserve more than those who earn only half those salaries,” the researchers noted.
Unless your main hobby is licking the boots of billionaires, I’m sure none of this is particularly surprising. In fact, you only need look at Elon Musk’s Twitter feed to realize that being obscenely rich doesn’t automatically equate to being incredibly smart.
Still, considering the widening pay gap between CEOs and workers, studies like this should be shouted from the rooftops. The pay gap between US CEOs and workers jumped to 670 to one last year, from 604 to one in 2020. To put it in more tangible terms, CEOs of US companies with some of the worst employees paid earned an average of $10.6 million. , while the median worker received only $23,968.
The pay gap is not as stark in the UK, but it is still bad. An analysis last year found that FTSE 350 chief executives were expected to earn 63 times the average median salary of workers at their companies, while 43 FTSE 350 bosses received more than 100 times the average salary of their employees in 2020. .
How can you justify this huge pay gap? You can’t. As studies like this make clear, it’s not meritocracy that’s driving the pay gap; it’s pure greed.