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As CEO of GE, Jeffrey Immelt earned $17,744,236 last year. GE has 330,000 employees. If Immelt decided to take $0 and share his income equally with the remain

As CEO of GE, Jeffrey Immelt earned $17,744,236 last year. GE has 330,000 employees. If Immelt decided to take $0 and share his income equally with the remaining GE employees, he'd increase each worker's income by $53.77 per year. That's not going to do much to close either the wealth or income gaps. Part of what we are seeing is simply that corporations are getting so much larger than they've ever been in history. Therefore, the pay granted to the CEO is for he or she to oversee larger and larger groups of people.

harryh 9y ago
GE employed 304,000 people in 1955. http://247wallst.com/investing/2010/09/21/americas-biggest-companies-then-and-now-1955-to-2010/2/ http://247wallst.com/investing/2010/09/21/americas-biggest-c...
- 11thEarlOfMar 9y ago
  Walmart employs 2,200,000 today. McMillon's total pay is $19,800,000. Per employee, that's $9.
  - harryh 9y ago
    I agree with your top level point about CEO pay not being significant compared to corporate budgets. I'm just saying that companies that employ a lot of people aren't exactly a new phenomenon.
    - 11thEarlOfMar 9y ago
      What is material to me is the notion that somehow the wealthy are responsible for the plight of the middle and lower class. In the US, the wealth that some enjoy is a side-effect of the economy's behavior. The economy behaves in the way it was designed* (not saying the designs are sound in all respects, but it is intentionally designed and its behavior reflects that design). I'm not convinced that the income/wealth gap itself is 'the problem'. Therefore, taxing the wealthy at a greater level will not be 'the fix'. What we want is for lower and middle income families to have more disposable income, less financial stress, and overall better quality of life. I believe that the most potent knob to affect that is the number of jobs available. Increasing the number of jobs increases the demand for workers. Increasing demand for workers increases the average pay. We can talk about the quality of the jobs as well, but I believe the primary influence from a macro-economic view is the number of jobs. US unemployment is at a 10 year low[0]. So we should see pay (and inflation) creeping up over the next few years, barring some unforeseen economic disaster, and the lower and middle class will benefit. [0] https://data.bls.gov/timeseries/LNS14000000 https://data.bls.gov/timeseries/LNS14000000 * One illustration that keeps coming to mind: Two investors invest in the same instrument. That instrument returns 10% per year. They hold the investment for 5 years. Investor A invests $10,000 Investor B invests $100,000. At time 0 the 'wealth gap' is $90,000. At 5 years, A's investment is worth $16,100 and B's is worth $161,000. The wealth gap has grown to $145,000. It seems to me that people are making the observation that this gap is increasing, and it is, but in reality, it's a natural manifestation of capitalist economies. We've been in a bull market for 7 years, it's borderline unprecedented, and one observable effect is that the gap in absolute $ between rich and poor is increasing.
openasocket 9y ago
I take issue with the notion that corporations are larger than they've ever been in history. Consider the East India Company. At its height, it was worth $7.4 trillion in modern US dollars, and controlled half of the entire world's trade. I couldn't find details for how many people it employed total, but it did have a standing army of 260,000. That's right, a private army controlled by a company. Hell, the company essentially ruled India for a century. This is a company that fought wars and controlled territory. https://en.wikipedia.org/wiki/East_India_Company https://en.wikipedia.org/wiki/East_India_Company Not entirely on topic, but it's important food for thought.

harryh 9y ago

GE employed 304,000 people in 1955. http://247wallst.com/investing/2010/09/21/americas-biggest-companies-then-and-now-1955-to-2010/2/ http://247wallst.com/investing/2010/09/21/americas-biggest-c...

11thEarlOfMar 9y ago
Walmart employs 2,200,000 today. McMillon's total pay is $19,800,000. Per employee, that's $9.
- harryh 9y ago
  I agree with your top level point about CEO pay not being significant compared to corporate budgets. I'm just saying that companies that employ a lot of people aren't exactly a new phenomenon.
  - 11thEarlOfMar 9y ago
    What is material to me is the notion that somehow the wealthy are responsible for the plight of the middle and lower class. In the US, the wealth that some enjoy is a side-effect of the economy's behavior. The economy behaves in the way it was designed* (not saying the designs are sound in all respects, but it is intentionally designed and its behavior reflects that design). I'm not convinced that the income/wealth gap itself is 'the problem'. Therefore, taxing the wealthy at a greater level will not be 'the fix'. What we want is for lower and middle income families to have more disposable income, less financial stress, and overall better quality of life. I believe that the most potent knob to affect that is the number of jobs available. Increasing the number of jobs increases the demand for workers. Increasing demand for workers increases the average pay. We can talk about the quality of the jobs as well, but I believe the primary influence from a macro-economic view is the number of jobs. US unemployment is at a 10 year low[0]. So we should see pay (and inflation) creeping up over the next few years, barring some unforeseen economic disaster, and the lower and middle class will benefit. [0] https://data.bls.gov/timeseries/LNS14000000 https://data.bls.gov/timeseries/LNS14000000 * One illustration that keeps coming to mind: Two investors invest in the same instrument. That instrument returns 10% per year. They hold the investment for 5 years. Investor A invests $10,000 Investor B invests $100,000. At time 0 the 'wealth gap' is $90,000. At 5 years, A's investment is worth $16,100 and B's is worth $161,000. The wealth gap has grown to $145,000. It seems to me that people are making the observation that this gap is increasing, and it is, but in reality, it's a natural manifestation of capitalist economies. We've been in a bull market for 7 years, it's borderline unprecedented, and one observable effect is that the gap in absolute $ between rich and poor is increasing.

openasocket 9y ago

I take issue with the notion that corporations are larger than they've ever been in history. Consider the East India Company. At its height, it was worth $7.4 trillion in modern US dollars, and controlled half of the entire world's trade. I couldn't find details for how many people it employed total, but it did have a standing army of 260,000. That's right, a private army controlled by a company. Hell, the company essentially ruled India for a century. This is a company that fought wars and controlled territory. https://en.wikipedia.org/wiki/East_India_Company https://en.wikipedia.org/wiki/East_India_Company Not entirely on topic, but it's important food for thought.