Money may be able to buy you happiness, but it can’t buy you brains. A study published in January found that billionaires aren’t any smarter than the rest of us – indeed, those in the top 1% of earners scored lower on cognitive ability tests than those who earned slightly less.
This is according to researchers who analysed data from 59,000 Swedish men, then tracked their lives for more than a decade. They found a strong connection between how smart someone was and how much they earned – until they reached a salary of 600,000 kronor (£46,700) a year. After that, factors such as luck, background and personality became more important.
“Along an important dimension of merit – cognitive ability – we find no evidence that those with top jobs that pay extraordinary wages are more deserving than those who earn only half those wages,” the researchers noted.
Unless your primary hobby is licking billionaires’ boots, I am sure none of this is particularly surprising. Indeed, you need only look at Elon Musk’s Twitter feed to realise that being obscenely rich doesn’t automatically equate to being incredibly intelligent.
Still, considering the soaring pay gap between CEOs and workers, studies such as this need to be shouted from the rooftops. The wage gap between CEOs and US workers jumped last year to 670 to one, up from 604 to one in 2020. To put that in more tangible terms, CEOs at US companies with some of the lowest-paid staff made an average of $10.6m, while the median worker received just $23,968.
The pay disparity isn’t as stark in the UK, but it’s still bad. An analysis last year found that FTSE 350 chief executives were expected to collect 63 times the average median pay of workers at their companies, while 43 FTSE 350 bosses received more than 100 times their employees’ average salary in 2020.
How can you justify this enormous wage gap? You can’t. As studies such as this make clear, it’s not meritocracy that is driving the wage gap; it’s plain old greed.
• Arwa Mahdawi is a Guardian columnist
