The billion-dollar salary.

Economics lesson time, folks!

Last month, Rep. Alexandria Ocasio-Cortez (D–NY) made a comment about billionaires, in the context of a number of recently proposed billionaire taxes. I started to blog on it at the time, but got distracted and didn’t finish writing the piece. Figured I’d finish that thought now.

First the quote she made when she appeared on Ilana Glazer’s podcast, which I looked up ’cause I wanna be accurate:

There’s a certain level of wealth and accumulation that is unearned. You can’t earn a billion dollars. You just can’t earn that. You can get market power, you can break rules, you can abuse labor laws, you can pay people less than what they’re worth, but you can’t earn that. So you have to create a myth that—since you didn’t earn that—you have to create a myth of earning it. So if you’re making minimum wage at a Walmart, and you’re making $7 an hour, and I mean, dang, with these gas prices, it takes you $7 to get to work. So as a result, we’ve kind of internalized this moralized system, right? “The people at the top are smarter, better, you know, more sophisticated.” And therefore, the people at the bottom are uneducated, lazy, etcetera.

Okay, lemme start by saying this statement, “You can’t earn a billion dollars,” isn’t true. I crunched the numbers.

Apple, which makes iPhones and laptops and watches and other gadgets, and sells and rents music and videos, made a net profit of $116 billion in 2025. They claim to have 166,000 full-time employees, but that doesn’t include all the “independent contrators” who do just as much for ’em, so I’ll include them and estimate they actually have 550,000 employees worldwide.

Now let’s take a little more than two-thirds that profit—$78 billion—and pay all those employees equally. Comes out to $141,818.18 a year. Realistically, new and entry-level employees would make a bit less, and top managers would make a bit more, but still: Not too shabby. Nearly all of them should be very happy with that; it’s better than they could get in union jobs. All the subcontractors making iPhones for ’em in China?—they’d be thrilled. And that still leaves Apple $35 billion to distribute between the shareholders.

Could they then take a billion of that, and give that to their CEO as salary? Of course they can. It’d be excessively more than the rest of the Apple employees make, and that might bother a few of them. They’d feel if he’s earning a billion, they oughta be earning at least millions. Even though $142K is a better-than-average salary. (Whether it’s a living wage in someplace as pricey as Cupertino is another thing.)

But in real life, that’s not happening. Subcontractors are still grievously underpaid, managers are still grievously overpaid, and Tim Cook made $74.3 million in 2025. Where’d the rest of the profit go? Shareholders. (Full disclosure: I’m one of them. Not a big shareholder, but still.) Cook’s one of those big shareholders, and made a lot more money in stock than in actual salary; nearly $700M. Pretty sure the shareholders want as much of those profits as possible going to them, not employees. Nor, even with as profitable as Cook has made the company, Cook himself.

There are plenty of big companies whose profit margins are so large, they could totally pay their employees a comfortable wage, pay their CEO a billion dollars, and have profits left over. You don’t have to break rules, nor abuse labor laws. We can also debate whether people, even though they’d now be paid very comfortably, still aren’t truly paid what they’re worth. But yeah, in some of the big companies, the person at the top can earn a billion dollars. It’s just the board won’t let them, because the board represents the shareholders, and a billion dollars to the CEO, and living wages to the rest of the employees, means money they won’t get.

Yep, boards and shareholders are the problem. Rep. Ocasio-Cortez needs to address that… and probably won’t, because quite a few working-class Americans are also shareholders, and kinda like getting their quarterly dividends, and would be pissed if anything interfered with them.

Now lemme tell you about another way Ocasio-Cortez is wrong about this. It has to do with those billionaires who are supposedly getting billion-dollar salaries. Except they actually aren’t.

When you imagine people getting billion-dollar salaries, you’re probably thinking of the richest people in the United States, like Jeff Bezos and Elon Musk. Surely they’re the ones getting billion-dollar salaries from Amazon and Tesla, right?

In Musk’s case yes. In Bezo’s case no.

Up till recently, those guys’ wealth didn’t come from their salaries, but their shares. When their companies got listed on the NASDAQ Stock Exchange, both Bezos and Musk were given a certain percentage of premium stock certificates. Bezos owned 43 percent of Amazon, and Musk owned 28.9 percent of Tesla. The value of both stocks has shot way up since. That’s how they became billionaires.

Bezos’s wealth has nothing to do with salary. Nothing to do with how he runs his companies; stock is worth what it’s worth because people are willing to spend that much for it. We can argue all the live-long day about whether a company is legitimately worth that much, but at the end of the day, if people are eager to buy your company’s stock at $100 a share, and there are a million shares out there, your company is worth $100 million. Doesn’t matter if it’s so poorly managed, it could collapse tomorrow; it’s still worth exactly what it’s trading for. (Which’ll quickly change when it collapses. But still.)

Until recently, Musk was a billionaire the very same way Bezos is a billionaire: His stock was worth billions. He’s since decided he wants to become the world’s first trillionaire, and worked out a deal with the Tesla board where they pay him $23.5 billion a year—but most of that is in stock, not cash. He’s the only CEO on the Forbes List who is, between salary and stock, earning a billion a year. The next closest is Tim Cook, who’s getting there, but isn’t there yet—and is retiring from Apple anway.

So when Rep. Ocasio-Cortez is talking about billionaires who make billion-dollar salaries, there’s only one guy in that club right now. And Musk actually isn’t getting that billion by exploiting his workers. His customers definitely; Telsas are lemons and their solar panels keep catching fire. But his money’s coming from the stock market. So long that his fans keep believing Tesla is worth something, Tesla’s stock price will keep climbing, he and his investors will keep getting richer, and he’ll finally hit that trillionaire mark.

Of course, people might realize Tesla’s value is wildly overestimated, and Musk is a huckster, and the bottom will fall out of Tesla stock, and so much for becoming a trillionaire. But the deep, abiding faith of Musk fans is also wildly overestimated.

Does Rep. Alexandria Ocasio-Cortez actually know this is how billionaires are made, and that it has to do with stock not salaries? Yes. She’s double-majored in economics and international relations at Boston University, and graduated cum laude. She graduated in 2011, and has largely current information. She’s fully aware of how money is made.

If you’re conservative, you may not know she’s up to speed on this. Republican pundits are all too fond of saying she was “only a bartender” before becoming a congresswoman. Yeah, she did that too. She still has a better and more applicable education than half the numbnuts in the Republican caucus. And she graduated 15 years ago, whereas they graduated in the last century and forgot half of what they learned—assuming any of that data is still up to date. International relations are just a bit different from the Cold War era.

So since she’s knowledgeable about today’s economics, why’d she make such an obvious, class-warfare stirring statement condemning billionaire salaries?… and y’notice I kinda answered my question within my question.

Social Darwinism is a legitimate problem in our society. Too many people justify underpaying people by claiming they’re not as smart, or lazy, or productive, or whatever excuse will do. Too many people justify overpaying people by claiming they’re exceptional. Elon Musk absolutely thinks he’s one of those exceptional people, which is why he wants to become a trillionaire.

And the wealth gap is also a legitimate problem. That little demonstration I made with Apple? Can be done with most companies on the stock exchange; all of them could afford to pay their employees more, their CEOs a lot more, and their shareholders less. But the big shareholders are also billionaires, who wanna keep the gravy train a-coming even though they don’t work for their money; they just sit on their behinds and collect dividends, and imagine they’re much too clever for real work.

Part of how we fix the problem is by identifying the actual problem. But it’s more fun to go after CEOs. Might win you votes. So, that’s what Ocasio-Cortez does. Red meat for her supporters. They’ll love it and repeat it, and never ask if it’s entirely true. It feels true. And isn’t truthiness what America’s all about?