The rich continue to plunder the middle class

[spazattak]

@xtisme

Because your comparison is incorrect. Executives and managers DO have a more direct impact on the profitablility of a company (in many cases) than do most workers. Its a compensation pyramid, with unskilled workers (easily replace-able) at the bottom, more skilled workers (not as easily replace-able, but not unique) in the middle, and management at the top (with guys like CEO’s and VP’s bringing unique skills or abilities to make companies profitable). Of course, this isn’t always the case…but it usually IS the case in successful major companies. They aren’t successful because of luck, nor are they successful because the fat cats at the top are incompetent while the hard working peasants at the bottom are doing all the work.

Think of it this way if you like. Lets look at pro sports for a minute (not a subject I have a great deal of knowledge in, but the analogy is understandable). There are all the support guys, the guys who set up the lockers, the water boys, towel boys (I assume), equipment handlers, the guys who string the communications, etc. They are paid a fairly low wage. Why? Well, because they are easy to replace, and in the greater scheme, while there efforts are important, they as individuals aren’t VITAL to the success of the team. Really, even if you are an excellent water boy, you could be replaced with no noticable difference to how the team performs.

Next we have the players. All are paid well (compared to the water boys), but some are paid well, and some are paid VERY well. Why? Because some players bring skills to the team that more directly impact the overall performance of the team as a whole than others do…individually. You take the back up tackle or guard for instance. Oh, he brings skills to the game that the average joe doesn’t have, and he’s paid accordingly…but his realistic impact on the team is lower than a star running back or quarterback (I’m starting to strain my knowledge of football at this point). Thats why the star running back or quarterback are paid more than a backup lineman. Then there is the coach (I assume coaches make a lot)…he ALSO brings unique skills to the game. And if the team does poorly, then its a reflection on him directly…and could put his position in jeopardy eventually if the trend continues.

THen you have the owners. They make the lions share of the money. Why? What do THEY bring? Well, they are the one’s who are putting up the initial capital, who are taking the risks. Without them there IS no team. The players, coaches and water boys aren’t taking the risks…if the team is a financial flop they will move on. It will only be the owners who are left holding the bag.

-XT

And the executives wouldn’t be able to flex their unique abilities without good workers working for them. Who are the one’s executing the executives’ plans afterall? In your sports analogy, the star players routinely earn more than the head coaches, and alot of the players earn more than the ancillary coaches. The owners would be your stock holders. The comparison doesn’t hold up.

[Damuri_Ajashi]

@John Mace

In order to be robbed, someone must take something that belongs to you. Can you tell us what that something is in this case?
Strawman. Unless, of course, you can show us a quote from one of the so-called conservatives you speak of saying that.

If you actually want to have a rational debate about this subject, might I suggest you avoid the hysterical hyperbole at both ends of the spetctrum?

I think the argument is a about equitable distribution. The rich are taking a larger peice of the pie than they should. The conservative counter is that the market is determining the distribution of the wealth created by this economy and the progressive reply is that the free market doesn’t work as well as conservatives like to believe. Free markets tend to be efficient but not very equitable.

Another argument might be that the rich are imposing more externalities (either directly or through the proxy of corporate ownership) on the system than they account for.

[spazattak]

A cite or twoto backup my claim about head coaches making less.

[2sense]

@Weirddave

I just have a couple of questions for the “soak the rich” crowd here. Just how much do you want to soak then for? The top 3% (those making $200K +) already pay 47% of the taxes in this country.

Cite? And something showing ALL tax revenue if you please and not just from the federal income tax.

Second, given that in the last 100 years, the biggest periods of economic growth(with a corresponding increase in income tax revenues, seeing them increase between 50-80% each time) have followed tax cuts for the wealthiest Americans (Coolidge in 1923, Kennedy in 1964 (his cuts hit after his death) Reagan in 1981 and our own beloved George W. Bush this century), what do you see as the likely outcome of your plan to raise taxes on the rich?

[/QUOTE]

Cite? And something showing that the increase in revenue came from actual growth and not, as I believe happened with the Reagan tax “cut”, through elimination of deductions so that some people ( hint: not the superwealthy ) ended up paying more for making the same money, if you please. Also, this is an increase over the revenue that would have been brought in otherwise if the same rates have been left alone and economic growth remained steady, right?

By doing that, you will be slowing economic growth and lowering federal tax revenues, how is that going to advance your socialistic agenda? Could it be here that the real problem, in general and today in particular, is not the tax cuts that have happened under this president’s administration, but in the out of control spending in which the Bush administration and government in general have engaged?

Certainly we spend money on foolish things such as wars of opportunity and corporate welfare but business regulation and the social safety net are another story. Yes, taxing to pay for this has the effect of slowing economic growth though to what degree is hard to accurately gauge. And not paying for them but rather borrowing the money has an effect on the economy as well.

I further posit that raising taxes on the rich isn’t a solution to anything except the envy of lower economic classes, and that the left plays on this envy very nicely indeed, to it’s enormous benefit.

“Enormous”? Conservative rhetoric seems to be much more effective given who controls the Federal Executive, Legislature, Courts, and most of the Democratic Party as well.

If you want to see a real increase in the income of the middle class, the solution is less government spending and less intrusive government to go along with lower taxes. Then everyone wins.

How would you explain the massive expansion, some say the creation, of the American middle class after the introduction of the New Deal?

[LonesomePolecat]

@xtisme

Because your comparison is incorrect. Executives and managers DO have a more direct impact on the profitablility of a company (in many cases) than do most workers. Its a compensation pyramid, with unskilled workers (easily replace-able) at the bottom, more skilled workers (not as easily replace-able, but not unique) in the middle, and management at the top (with guys like CEO’s and VP’s bringing unique skills or abilities to make companies profitable). Of course, this isn’t always the case…but it usually IS the case in successful major companies. They aren’t successful because of luck, nor are they successful because the fat cats at the top are incompetent while the hard working peasants at the bottom are doing all the work.

This, however, fails to explain CEO’s who get huge salaries and golden parachutes even when their performance is mediocre or poor. Your explanation here is based on the *laissez-faire * fantasy that a completely impersonal force known as the Market will eventually give the best possible long term results if only evil socialists can be kept from interfering. Works great in an Ayn Rand novel; out in the real world, it comes across as a tad naive.

[XT]

@spazattak

And the executives wouldn’t be able to flex their unique abilities without good workers working for them. Who are the one’s executing the executives’ plans afterall? In your sports analogy, the star players routinely earn more than the head coaches, and alot of the players earn more than the ancillary coaches. The owners would be your stock holders. The comparison doesn’t hold up.

That true…but who as and individual has more impact on the profitability of the company?

Granted, coaches may not make as much as players…I would say then that coaches are easier to come by than top notch players in that case. IOW, the skill set to be a good coach means that there is a larger pool of folks able to fill that position in such a way as to make the team successful…while a given player (may) brings both a more specialized skill set AND perhaps unique talents that a much smaller pool (and thus more in demand and more easily marketed)…increasing the teams chances for success.

Also, there is another factor in pro-sports. While a coach may have a greater impact on whether a team wins or loses, the paying customers (the fans) presumably go to games to see their favorite players play…and thus, the players over all worth goes beyond their individual impact on the success of the team (at least wrt just winning games).

I don’t think the analogy fails, despite my clumsy wording and the obvious fact that I’m not a big sports fan…YMMV.

-XT

[2sense]

@xtisme

I think the fundamental disconnect here is that some people feel that ‘the middle class’ are entitled not only to a job but to continually rising wages. Why this would be the case I don’t know. Labor is simply another element in the market after all, the price of which is set by its necessity to drive the success of the companies who hire that labor. If a company, through automation or investment is able to make workers more productive while having less workers, or less skilled workers, then its not further obligated to maintain the old levels of either salary or numbers of workers…in fact, it CAN’T do that if it wants to remain competetive. A lot of folks in this thread however SEEM to be saying that companies should do this, disregarding the potential that said company will go out of business…thus depriving ALL the workers in that company of employment (and perhaps having a negative effect on yet other companies).

I think the fundamental disconnect here is that some people feel that markets should serve people and not the other way around. There is nothing holy about deregulated enterprise. If the market can’t deliver general prosperity then it is a failed economic model and we need to move on. Personally, I don’t believe that is true. I believe we can and should harness this powerful economic tool for the benefit of all. If the current companies can’t be counted upon to to provide good and stable jobs then what good are they? Let them fail and be replaced by better companies.

Just my 2sense

[bup]

@Weirddave

Second, given that in the last 100 years, the biggest periods of economic growth(with a corresponding increase in income tax revenues, seeing them increase between 50-80% each time) have followed tax cuts for the wealthiest Americans (Coolidge in 1923, Kennedy in 1964 (his cuts hit after his death) Reagan in 1981 and our own beloved George W. Bush this century),

What’s your cite for these claims? Tax revenues just a year ago regained the level they were at in Clinton’s last year.

[spazattak]

@xtisme

That true…but who as and individual has more impact on the profitability of the company?

The people actually executing the plans, just like in your sports analogy An exec can come up with all the great plans in the world. If s/he doesn’t have a competant staff to buy in to and execute them, they’re still just plans.

[Damuri_Ajashi]

@Caridwen

This article isn’t** just ** about unskilled workers which surprised me because I thought that too before I read the article. It’s saying even wages in the 80th percentile are affected.

I’d say according to this article all but the 90th percentile are affected, so the OP is pretty accurate. Basically the top 10% are getting richer and everyone else is getting poorer.

I’m no economist and don’t know the answer. Perhaps some of the suggestions in this thread would help. I found the article was pretty interesting.

You want more equitable distribution of the fruits of our productivity? You’re not gonna like the answer.

Increase income taxes and increase the estate tax.

Add a few more tax brackets so that the top marginal rate maxes out at 90% for those who make more than 10 million dollars or some number like that.

Back in the 40s, 50s, 60s, 70’s and most of the 80’s when we had top marginal tax rates of at least 50% (and for most of that period above 80%). Executives were not paid several hudred times as much as the line workers they were still filthy rich but noone was making 100 million dollars a year while the line worker was making minimum wage. It didn’t cripple us economically, indeed many people would say that these were pretty productive years for us.

It also has the advantage of helping to pay for the areas where the free market fails.

[Maeglin]

@LonesomePolecat

This, however, fails to explain CEO’s who get huge salaries and golden parachutes even when their performance is mediocre or poor. Your explanation here is based on the *laissez-faire * fantasy that a completely impersonal force known as the Market will eventually give the best possible long term results if only evil socialists can be kept from interfering. Works great in an Ayn Rand novel; out in the real world, it comes across as a tad naive.

This also fails to explain why companies are full of mediocre and lazy workers who don’t lose their jobs on a regular basis.

It is not that the idea of competitive markets is “naive” so much as individual employment and compensation decisions are subject to noneconomic considerations as well. In the aggregate, it is easy to observe how this process operates. It is equally easy to observe deviations. The existence of the latter in no way undermines the existence of the former.

[XT]

@LonesomePolecat

This, however, fails to explain CEO’s who get huge salaries and golden parachutes even when their performance is mediocre or poor. Your explanation here is based on the laissez-faire fantasy that a completely impersonal force known as the Market will eventually give the best possible long term results if only evil socialists can be kept from interfering. Works great in an Ayn Rand novel; out in the real world, it comes across as a tad naive.

No…what it points out is your lack of understanding of how CEO’s are hired. In addition, you seem to be under the mis-apprehension that I believe that these things always work perfectly, every time…or that I’m living in some kind of ‘laissez-faire fantasy’ based on Ayn Rand novel’s.

Two things. When a CEO agree’s to join a company, s/he negotiates with the various prospective companies vieing for his/her services. Usually CEO’s are picked because of their past track record of success, so they are bringing with them experience, proven track records, and unique skill sets. In return they demand things like huge salaries and ‘golden parachutes’ on the chance that things don’t work out perfectly (this happens, even if the CEO is a good one). Its pretty standard…sort of like a sports star who demands a contract of X amount of dollars despite performance or injury, or how the team does in the end.

The second thing is, despite your insulting comments, I DON’T believe that the market is perfect all the time…certainly not in the short term. So, of course there are abuses where unscrupulous CEO’s run their companies into the ground, while their boards of directors continue to pay them far beyond what they are bringing to the company…and when that company folds get the benifits and goodies. This isn’t an example of the free market not working though, as you imply…but a mechanism showing that it IS working. After all, if a company puts such a one in charge, then eventually that company will fold. This happens FAR less than you seem to think though…a lot of times CEO’s of successful companies already have these contracts in place when various market forces change, making the companies they work for less profitable. Or CEO’s, being successful for years are unable to adapt. Their boards of directors are reluctant to switch what was previously a successful and profitable CEO out, and eventually the company folds…but those contracts are still in place that the CEO originally negotiated.
BTW, in future, try and keep the insulting ‘laissez-faire fantasy’ and Ayn Rand references to yourself. After all, I didn’t insult you or anyone else in this thread…I kept my own thoughts about how ‘naive’ I though you and others in this thread are…or aren’t. You don’t agree with me? Fine. Debate then. Don’t make assumptions or insult me though, just talk to the points.

-XT

[Eonwe]

@John Mace

Bingo. I think our OP is assuming that workers “own” this increaded productivity, but that’s only true if it comes about because of skills that they possess themselves. When I was a kid, I had a job as a cashier one summer. Those old style cash registered meant that I had to able to do accurate data entry, figure out change, and then pay the customer back. Today’s cashier only has to be able to move product in front of a scanner and then pay the customer the change that the machine tells him. And guess what-- that guy is more productive than I was, even if it takes less skill to do the job.

This is a tough problem, and the solution is not to just require employers to pay unskilled workers more-- unless you want to force the elimination of even more unskilled jobs either thru automation or outsourcing.

The problem with this, as I see it, is that if we follow this model, then whenever a productivity tool is implemented it would make sense to pay a person less, as he or she is working less (even though he or she is producing more).

So, eventually every process is automated and everyone is out of a job, except for CEOs, CFOs, and boards of directors.

Your sci-fi future is now comprised not of a moderately well-off class of people who reap the benefits of increased productivity due to technology, but rather a large poor underclass who see continually falling wages and probable unemployment due to the fact that it becomes less and less profitable for companies to have employees in the first place.

I don’t know what you made operating a cash register back in the day, but to suggest, for example, that a person ought to make less today, while overseeing a daily cash-flow (at a grocery store for example) that would have been unheard of thirty years ago, and likewise making profits for the company, just flat-out doesn’t make any sense.

Also, one might argue that regardless of whether or not the individual is working harder or is more skilled than in the past, a person’s worth to a company is related to the amount of revenue he or she facilitates. So, all I may do is push a button, but if I don’t push a button you lose 500,000 dollars, then maybe my job ought to have a high value, even though the machine automates all the tasks I used to do.

[Damuri_Ajashi]

@hajario

Could we get a definition of “rich” for the purposes of this debate? Is it based on salary, salary relative to local cost of living, net worth…?

I would say anyone that earns more than the President of the United State (about $400K/year (VP, Speaker of the hose and Chief Justice all get about 200K/year, senators and reps get about 162K)) or has more than 5 million dollars in assets is rich.

[XT]

@spazattak

The people actually executing the plans, just like in your sports analogy An exec can come up with all the great plans in the world. If s/he doesn’t have a competant staff to buy in to and execute them, they’re still just plans.

Yes, I got that. You need a staff to run a business. You need to hire people who are at a level that is necessary to make the business successful. People are compensated due to their impact on that success…and the size of the pool that competent workers who CAN do the necessary functions can be drawn from.

So, since there probably are less executives who can come up with the ‘greatest plans in the world’, you will probably pay that person more than, say, the mail room guy. Now, the mail room guy is important…he’s certainly a cog in the machine. But you can get LOTS of mail room guys, and really, his individual impact on the success or failure of the plan is not very great. A technician or engineer, individually, has a much greater impact on the plans success or failure…and so is compensated more. The manager, managing said technician and engineer, as well as directing the plan, is still more valuable on an individual basis…and so is probably compensated more. Though as in the sports analogy, I’ve known engineers (been one myself in fact :)) who made more than there Project Managers did. Finally, the CEO, who came up with the plan, who directed the company towards whatever this world greatest thing is, is compensated the most…because he’s the most valuable individual, the least able to be swapped out by just anyone.

Again, it has to do with the respective value of people as individuals, what skill sets they bring and their individual impact on the success of the company…as well as how easy they are to replace with other competent workers who can do the same job.

Anyway, I think we are spinning our wheels on this point. If you think my sports analogy is bad, so be it. It won’t break my heart.

-XT

[XT]

@2sense

I think the fundamental disconnect here is that some people feel that markets should serve people and not the other way around. There is nothing holy about deregulated enterprise. If the market can’t deliver general prosperity then it is a failed economic model and we need to move on. Personally, I don’t believe that is true. I believe we can and should harness this powerful economic tool for the benefit of all. If the current companies can’t be counted upon to to provide good and stable jobs then what good are they? Let them fail and be replaced by better companies.

I agree…thats the fundamental disconnect going on in this thread. I also understand that you think its wise to ‘harness this powerful economic tool for the benifit of all’. Its been tried in the past, but maybe you think you could do it right this time. I’m skeptical, and think you are wrong, but I conceed that YOU think its a good idea.

BTW, I didn’t say there was anything ‘holy about deregulated enterprise’, and in fact I don’t think complete deregulation is a good idea. In fact, I’m NOT a laissez-faire capitalist. People are making some assumptions about me in this thread…some insulting (or what they think is insulting), others not.

-XT

[spazattak]

I don’t disagree with your assessment… but if they’re all cogs and all part of the success of the company, why don’t they all share in its profits when it succeeds You can bet when it fails, those smaller cogs get laid off or less of a raise…

[XT]

@spazattak

I don’t disagree with your assessment… but if they’re all cogs and all part of the success of the company, why don’t they all share in its profits when it succeeds You can bet when it fails, those smaller cogs get laid off or less of a raise…

Well, we do in fact…we keep getting our paychecks at the salary we agreed upon when we joined the company. If we are really good, we probably get a nice raise as well. Even if we don’t do spectacularly, we will probably get SOME kind of raise every year. If we are unhappy with our compensation, or think that our skills are under appreciated, we are free to move on to greener pastures.

And as I said, some companies, as an incentive to keep good workers, DO share profits with employees. I’ve worked for several such companies in the past.

-XT

[Damuri_Ajashi]

@Bricker

Uh huh… yeah.

Do you believe that most Americans favor the sorts of solutions that are being tossed around in this thread? If these things are so attractive to the average American, why aren’t prominent politicans pushing for them?

Why, in other words, doe the Left feel the need to hide its true colors when seeking support from the average American?

One of the problems with democracies is that it tends to elect people who believe will deliver lower taxes and greater benefits regardless of whether or not they are good statesmen in any other way. Our ability to accumulate debt has made this an easy thing to promise the voters.

[Quartz]

A small observation: if you tax the rich too much, they’ll simply up sticks and set up elsewhere.