Is there any group in America that is truly overpaid? It is my understanding that if any group was truly overpaid that this would create an inefficiant system that would either correct itself or the system would die. And as long as the system remains efficiant there is no way for a group to consistently be overpaid. Both sides will continue to feel they are made better by their deal. There would be specific example of groups/individuals being overpaid at times but this would be corrected.
CEOs, yes. The reason the system does not correct itself is that the fix is in by the nature of it, with the committees assigned to set CEO salaries basically appointed by the CEOs. Since these are often heavily populated by CEOs, there is a built-in conflict of interest.
It will be interesting to see if the yelling about this will have any affect. None so far.
I disagree about movie stars. They get paid because it is believed they bring in enough customers to earn back their salaries. Individual stars who do not do this either stop working or start working in lesser roles with lesser compensation.
And jobs mostly done by women, such as teachers, nurses, etc.
In a sense, governors and other high level officials are underpaid, since the salaries are published and the voters compare them to their salaries, not to comparable jobs in industry. A friend of mine was the treasurer of a major state, and when his boss lost, he got a massive pay raise going into industry.
And some keep rolling along making flops and earning millions every year. Names are a draw, but a no-name actor doing a good job in a reasonably promoted movie does a lot, too.
Well, this is a tricky area. You don’t want to overpay government employees, but you still need to attract them away from private business. I don’t profess to know where the balance lies, but… whisper My ex’s father will make $60k a year on pension when he retired from the patent office. So it isn’t exactly a universal “underpayment”…
Isn’t this just a problem of competition? Many women (and people in these fields) are willing to work for low amounts of money thus creating a prisoner’s dilemma. However, the situation is not inefficient, so why do say they are underpaid? They are obivously willing to work for these amounts because they feel they ae better off under their employment deals.
Because working for less is better than unemployment?
What do you want, mass strikes? It is a living wage, and some people have to take what they can get, especially in specialized fields like nursing and teaching. They don’t have the ability to sit around and wait for capitalism to meed their demands and raise their wages.
IMO professional athletes are grossly overpaid. But the system is allowed to function because Congress has given pro sports an exemption from anti-trust regulations. Apply those regulations, and you would see salaries drop like a rock, as more and more teams entered the system.
Some information regarding your query may be revealed through a detail analysis of the above charts. There is a LOT of information there, and I’m still going over most of it (a lot of it is over my head). Please keep in mind that statistics is a tricky field, correlation is not causation, and keep your arms and legs inside the census car at all times.
(Summaries about the above statistics may be found here, but they don’t include every group and are basically very vague briefs on poverty and median income rates in general, with a little touching on ethnic background. However, again, please be careful with assumptions, because hispanics earning less on median does not mean that they earn less for the same jobs, as women (frequently) do. It is worth noting that blacks were less effected by the bubble bursting than whites or anyone else. Draw from that what you may.)
Only Major League Baseball has anti-trust exemptions. I am not sure of the specifics of anti-trust law, but I think that does explain why, more than in any other sport, pro baseball players make ASTRONOMICAL sums of money.
Personally, I think really good pro athletes are like movie stars: they put people in the seats, and thus their high salaries are justified. But without any salary cap in place, you also see mediocre players making far more than they deserve, which in turn forces all salaries in a given position to increase. This system also allows the team with the deepest pockets (in this case, the Yankees) to effectively control the economy of the league.
It is a sick system, and it was in fact deeply hurting MLB in a number of ways, and not just financially. However, The Washington Post recently reported that since the luxury tax system was put into place, the value of free agent contracts has actually declined. But we’ll need a few more seasons to determine if that is more than a blip.
This is incorrect on both the law and the economics. On the law, the baseball antitrust exemption is a creation of the Supreme Court, not Congress. Basically, the Court just arbitrarily decided that baseball was not “commerce” subject to the regulation of the federal antitrust laws. (Not sure why nobody seems to have challenged MLB under state antitrust laws, but that’s another matter for another day.)
On the economics, the only real effect that the antitrust exemption has on MLB is that the team owners are allowed to collude amongst themselves on various economic matters, such as preventing the Expos from moving to D.C. They are not, however, permitted to collude on player salaries. When they did that in the 1980s, they got popped for many millions of dollars in compensation to free agents whose salaries had been artificially depressed by the collusion.
Moreover, major sports leagues do not readily lend themselves to competition from other leagues in the same sport. Look at that miserable excuse for a football league, the XFL, which went under in just one year. Or look at the USFL from back in the mid-80s, which also quickly fell apart. The attraction of a major league is that it pits the best players against each other. Even if another league pops up and is capable of paying good players to play for it–as was the case with the USFL–the audience quickly gets diluted and loses interest in the new league because it’s not the best players competing against each other. And even if the new league were somehow able to shift the best players to join it, leaving the original league with the second-rate talent, it will just result in the extinction of the first league.
It’s interesting that you think CEOs are overpaid and that movie stars aren’t. Like movie starts, there is a great deal of variance in pay but when people think about them, they tend to only consider the top earners like Jack Welch and Bill Gates or Cameron Diaz and Mel Gibson.
CEOs have a job very similar to movies stars. They are the face of the company. Their job is to not only direct the company but assure investors of the strength of their investment. A good CEO has more influence and produces more of a benefit to the economy than any actor.
The reason that CEOs, athletes and actors earn so much is because their particular skill set transends the market. They, in fact, become their own market due to their star power. It’s hard to say if they are overpaid or not because so many people are dependent on their sucess.
It’s also hard to say what people “should” be paid. The economy consists of a complex interaction of markets - real estate, commercial goods, salaries, etc that are all interrelated. Increase wages and you increase demand for other goods driving up other costs.
It depends on the state sector that you’re in, I suppose. In corrections, my husband supervises over 250 employees and has massive responsibilities which entails designing and implementing social programs and policy-making. In a comparable job in the private sector, he’d be making far, far more than he is today.
The warden in the prison in which my husband works makes about 80K a year. It sounds like a lot, but considering the stress and difficult, complicated nature of his job (he basically runs a small city) it’s questionable. He’s essentially acting as a CEO, and would probably make 100 times more money in the private sector.
Ironically, corrections officers often make more than the warden does, because of overtime and holiday pay. One officer we know actually broke the six-figure mark last year.
There’s little incentive for the “best and the brightest” to work in such a thankless job as corrections. There’s very little job secuity due to budget cuts, it’s dangerous, and you are literally surrounded by the worst our society has to offer, who, to say the least, are not always pleasant to be around.
It’s hurt corrections overall. We need bright people who are enthusiastic and dedicated to making things better-- but those people go to Fortune 500 companies.
Why do you think teachers and nurses are underpaid? Most teachers and nurses make substantially more than a living wage, if by “living wage” you mean just enough to get by. I assure you the great majority of teachers make a lot more than the ladies who clean your hotel room.
I mean, I have a mother who teaches and a lot of friends who teach. They don’t make huge money, but they make decent money and the benefits are excellent. By what objective standard are they underpaid?
Because teachers provide an essential social service, far more important than having a hotel room cleaned, and far more difficult than having a hotel room cleaned. Further, it requires a degree to do, and in many places teachers earn far less than people with a similar level of training.
Also, it is exactly the sort of field that qualified people should be encouraged to enter. If teachers are not paid highly enough, those with good skills will often be drawn to higher paying jobs, leavings less qualified teachers. A society benefits from an educated workforce; if there are substandard teachers, the next generation will have less highly educated people, which would negatively affect a nation’s economy.
And finally, because they have to put up with kids. That should be worth an extra 10 grand every year in itself.
By movie stars I am limiting the discussion to the top paid people. I know all about the run of the mil actors - my daughter is a former SAG member, and I’ve even read the contract. Actors pay is strongly dependent on the number of roles they get, and they have the great advantage of residuals (for TV at least) which allows you to profit from a success.
A good one, yes. The problem is that you would have a hard time distinguishing a good CEO from a crappy one based on compensation. Ken Lay and his buddies hurt the economy more than any number of Gigli’s - and they got penalized only in the very worst cases.
Bull. They are participants in smaller markets. The big difference between the CEO and the other markets is that CEO compensation is set incestuously, while the other salaries are set through negotiations with truly independent parties. Studios and sports execs are paying with their own money, whereas corporate compensation committees are paying with the stockholders money. (And, as I mentioned, as CEOs they have an interest in setting a high pay precedent.)
If you think star and sports salaries are high, consider how high they would be if they were set by other stars and sports stars.
Susie: I’ll give you a nickel, but you have to eat five worms.
Susie: A penny a worm. Five cents, five worms.
Calvin: You’d think the guy actually eating the worms would be calling the shots.
Susie: Generally speaking, if you’re eating any worms at all, you’re not calling any shots.
I make an unspectacular salary as a technician at a print shop. To make ends meet, I haul furniture on the side for $25/hr in my pickup truck. My parents are appalled that I’m doing any kind of blue-collar crap at all, but it’s fast, easy money (when there’s a demand for it; $6-800 a month for hauling stuff is typical).
Sometimes, when I’m in over my head with a job that needs a lot of lifting, I hire a Salvadorean day worker. Today I hired two of them for a job that I hought would be worth a couple hundred dollars, but wound up paying $60. I supervised and drove the truck, they did all the heavy lifting. At the end of the gig, we each wound up with $20. I felt horribly short-changed, to the tune of about $280. The Salvadoreans felt like they’d tumbled onto a lavish windfall, and want me to call them if I ever need any more help.
It’s all relative. If you think you’re worth more than you’re making, quit and get another job. It’s the only accurate gauge of your current stock that I know of.
I seem to have the impression that cops are underpaid. But then, I figure that if they don’t like the pay for the work they should do something good for society, like bag groceries.
Seriously, though. I don’t think emergency service workers necessarily get paid enough. I know the fireman around here were looking for more money, and when I heard what they got paid I had the impression that I agreed, though I no longer recall what their pay was, or what they were asking for.