Yes, I would.
There is no way to decide if these requests are reasonable or unreasonable without knowing more.
That said I agree with the above that on the face of it what is being asked for in Oregon sounds unreasonable. A 50% pay cut would sound unreasonable on the face of it too. But without more info we cannot really say for sure if it is or just how unreasonable it might be.
Er, no. You can’t avoid contributing to CEO bonuses in general unless you go live in a cave.
It comes down to supply and demand. They supply of labor, at all skill and education levels, has been increasing faster than the demand for it. The opening up of China and other developing countries is where the supply is coming from. Eventually the people there will begin demanding more goods and services for themselves and the demand for labor will start outpacing the supply.
A side effect of this is that global inequality has been decreasing (I don’t have a cite handy, but I probably read it in The Economist). All those people in developing countries are getting closer now in income and wealth to the people in developed countries. This is a good thing, both from a moral standpoint and an economic one. Less inequality is good in its own right, of course; looking at inequality within a single country when we have a global economy is parochial. The reduced inequality means there are more opportunities to trade to the developing countries and increases the size of the total economic pie.
I don’t think it’s so much a supply and demand thing as far as compensation is concerned- it’s more with the value that employees add. By that, I mean that with equal availability, a highly trained accountant brings more to Wal-Mart than a night stock boy does, and consequently, the accountant will be paid more. It’s more of a concept of looking at employees as investments- you get a bigger ROI on paying more for better/more valuable employees, so you’re willing to pay more for them.
Obviously, there’s a sweet-spot of sorts, which is why companies don’t pay big money often for kids straight out of college, and nor do they often hire late-career people;
Supply and demand do play into it- the ROI is raised in conditions of scarcity, and lowered in situations of plenty, but not drastically. I think this is because the lower pay jobs are also typically more interchangeable. Even in situations where there are labor shortages in certain employment sectors, nobody’s paying 50k a year for stock boys- they could just as easily hire a cashier or movie theater clerk in need of a job and easily train him to be a stock boy. You can’t really do that with accountants, lawyers, etc…
I think that excessive bonuses and really high pay are included in this- I’d bet that financial firms are like law firms, where most private sector lawyers don’t make 100 grand a year, but almost all are still “well paid.” The bigger firms pay more, because they can, and because they can use it as a recruiting tool of sorts- many lawyers’ first choice is a big firm like say… Baker Botts because they pay well, and they don’t want to work for Huckster, Shyster & Mountebank LLC down the street, because they’re 1/16 the size of Baker Botts and don’t pay as well. So Baker Botts gets to cherry pick out of law school and out of the already working population. It’s an attempt to get the highest ROI they can- if they get what they perceive to be the best lawyers, they can bill more hours and get more cases, due to their performance. The billing rates of law firms are exorbitant, so it’s not like it cuts into their profit margins to pay so much.
Ok, WC, I’m just cutting you off except for this point. You’re confusing pain with risk. The two are not the same. The entrepreneur and the investors face risk. Workers face the possibility of being paid off. But they cannot lose anything on the deal.
It isn’t risk. You can deal with that however you like, but the fact is that capital and capital risk is always a major constraint; labor is only sometimes a constraint.
Capital privatized the marketplace of ideas.
The media is no longer a neutral voice. Television, radio, newspapers, magazines, and book publishers are dominated by a handful of big corporations. Sure, there are independent media that offer alternative choices but they’re small and easy to miss - nobody hears what they have to say unless they go looking for it. The majority of people just hear the corporate voice.
There doesn’t have to be any active censorship. The media can take idea off the public agenda just by ignoring them. Talk about choices A and B and people are going to think those are the only two choices and not realize there might be a C or D or Z.
A rising tide lifts all ships theory?
Well, not really.
Not sure what you read but if the measure is world GDP has grown therefore everyone is better off is bogus.
By every measure I have read inequality is increasing globally as measured among individuals. The haves have more and more of the pie and the have-nots are still in pretty shitty conditions. Crumbs from the table do not mitigate this. It’d be like you handing some starving person a spoon and then declaring they are better off than they were.
Your cites show the problem with trying to make global generalizations from poorly selected subsets of the data. A can’t find what I originally read, but this paper, Parametric estimations of the world distribution of income shows that the global Gini coefficient has been steadily decreasing since 1970 (see figure 3). As has the number of people in the world with an adjusted income below $1 per day (figure 4).
So globally, people are doing better now, both in terms of relative and absolute wealth (as measured by Gini coefficient and the $1 per day rate). Of course, that doesn’t directly help the people in regions (like the US) where inequality is increasing, but it does mean things have been getting for most people.
I couldn’t agree more with this.
Years ago I use to hate unions because I would read stories about totally lopsided deals where employees would get massive pay no virtually no work, or be inflexible about one thing or another. But due to a couple of things, one being, there’s horror stories about corporations exploiting their employees, but that doesn’t make all corporations bad, just like unions with unreasonable demands doesn’t mean all unions are bad.
That was extremely well said.
It’s weird to consider that workers are sharing their wealth with the machines they use.
Slight hijack, but in there labor threads it seems that sometimes the low level employees are looked down upon. So I just have to say that when it comes to front-line jobs, don’t forget that they’re necessary.
All companies that I know of only has one CEO. There are more presidents and other executive positions, but there’s still a limited number. Not everybody can be an executive director or plant manager. Somebody has to work the assembly line, or man the cash register.
Sure, for some people it’s their fault that they don’t go higher up the ladder, but even if everybody got their Masters degree or Ph.D., there would still be low level jobs that would need filling.
And the view that the employee is just an expense baffles me. The employee is doing the work that generates the profit. Theoretically anyway, if someone is employed by a business, it must be because they are needed by the business (yes, there are exceptions). If I invest in a pizza shop, but have nobody to make and serve the pizzas or nobody to work the cash register I have no business. The pizza makers give a reason for people to fork over their money, and the cashier gives them a way to do it. If there’s no pizzas to buy, or no way to pay, I’ll have no customers.
And I agree that the easier a job is to do, the less it’s worth. But it almost seems like there are some who view the investor as a god, and the employee as something that has to be put up with. And with that I totally disagree.
My impression is in the past labor could demand higher wages and benefits or better treatment, but now they can’t. I figure that is just due to the fact that labor has lost most of its power to intimidate or negotiate with investors because labor can easily replaced or undercut while investors cannot be intimidated or undercut. And I don’t see that stopping anytime soon. And as a member of labor who has to find a way to financially survive, that is bothersome.
It depends on the type of employee. A highly skilled chef is worth a great deal to a pizza place. The waitresses and busboys are pretty replaceable.
The employees are generating the work, but the work only generates a profit if the value of the work they produce exceeds their cost as employees. If you pay your entire staff twice as much, can you really cover the costs by doubling the price of your pizza?
I have never seen a machine draw a salary or buy a TV.
Investors want to cut costs and maximize profits. The two biggest way to do that with labor costs is automation and outsourcing. Each of these have their ups and downs of course. For example, it’s a good thing when dangerous jobs are automated. And for outsourcing, it can have a good effect on helping to lift up poor countries, say India. On the other hand, why pay for an American programmer when you can pay an Indian programer 60% less?
Automation, you can do nothing about, and frankly, I don’t think it’s all that bad. As for outsourcing, my only hope is that soon wages will be roughly equal so it won’t be as cost effective to outsource. Of course, that’s not counting countries that are cheaper to operate in because of things like looser environmental regulations.
And frankly, for the demise of unions, I’m sorry, but part of the blame has to go to them. When people hear about things like no cross training allowed, so that, for example, a job in a Japanese owned auto plant can be done by one person, but it takes five people in an American plant, because the contract specifies that each employee is responsible for one thing, and one thing only, and they can’t do anybody else’s job; That’s ridiculous. Of course there are outside factors too, and politicians who try to union bust whenever they can, but big powerful unions who at times aren’t reasonable don’t help their own case any.
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That’s not exactly true. During the 50’s, a relatively limited labor supply and a lot of overseas demand led to very high wages for workers, even more than the traditionally-high American labor costs. But it wasn’t forever. It didn’t and couldn’t last. It was strange from the start.
What’s interesting is that apart from some big, government-supported unions (such as the UAW, which got the gov to lean heavily on the Big Three), union influence was actually falling. The heyday of unions belonged to the earlier 1900-1930’s. The union system then tended to support decentralization, negotiation, and a certain amount of reason. But it’s important to understand that the older system was created by specific personalities, and its good traits weren’t necessarily communicable to a new generation.
The income generated by the application of labor to capital.
Yes.
Over the last 30 years the GDP has shot up and the productivity of labor has also shot up. The overwhelming portion of that increase in productivity has gone to capital and those who manage capital for the capitalists. I thought the OP was asking why there has been such a one sided division of the increases in productivity over the last few decades.
Certainly one answer is the supply of labor has increased both with the flattening of the world and the increased participation of women into the work force. But another facet is that we have increasingly started to view labor as merely production inputs rather than as the constituents of a society. We forget that of all the economic systems out there, we judge the success of that system based on its effects on the people in that society.
So having no income is not a risk?
Thats a good way to get people not to negotiate with you. Noone negotiates with a pig.
Please explain the disparity between pay for American CEOs and European or Asian CEOs. Its structural not value based.
The labor market is one of the most inefficient markets in the economy