5 ms·

I wonder what this looks like if you break it down by industry and firm size. It seems odd that this sort of thing can persist (and increase) over time since yo

I wonder what this looks like if you break it down by industry and firm size. It seems odd that this sort of thing can persist (and increase) over time since you'd expect competition within industries to drive this down over time.

dantheman 8y ago
Just to flip your assumptions around here's an idea; no personal knowledge here, just a potential alternate narrative. Perhaps competition drives executives salaries faster than general workers. There is intense competition for those who can have a large impact on the bottom line. In tougher/faster paced competitive environment the demand for qualified/experienced individuals must be intense.
- maxerickson 8y ago
  I imagine much of the explanation is firm size growing. You don't have to scrape out a lot of Walmart's revenues to get a huge salary. You have to scrape out a pretty big chunk of the revenue of a 50 person firm to get a large salary, never mind a huge one.
abvdasker 8y ago
Simplest explanation could be a macro-level decrease in competition through greater levels of consolidation and monopoly.
deleted 8y ago
[deleted]
tdb7893 8y ago
I'm under the impression from anecdotes that competition is decreasing in the American economy (though I would love to see data on it). Industries have been consolidating and even startups seem to avoid actually competitive markets as they are less profitable.
duxup 8y ago
I feel like there is a fairly heavy executive... club that is happy to hire their buddies and keep paying each other.... they're also on the boards that make these decisions. I think that forces driving the market are often, these same guys who are getting paid.
nhfoiwehf 8y ago
Unless competition for labor was decreasing as firms gained monopsony power. https://lwp.law.harvard.edu/files/lwp/files/webpage_materials_papers_bivens_shierholz_june_13_2018.pdf https://lwp.law.harvard.edu/files/lwp/files/webpage_material...
jimbokun 8y ago
This is staggeringly naive. Executive pay is not set by "the market". Executive pay is set by other executives sitting on each others boards. How surprising this executive class somehow consistently votes to give their fellow executives a greater and greater share of their corporations' value.

dantheman 8y ago

Just to flip your assumptions around here's an idea; no personal knowledge here, just a potential alternate narrative. Perhaps competition drives executives salaries faster than general workers. There is intense competition for those who can have a large impact on the bottom line. In tougher/faster paced competitive environment the demand for qualified/experienced individuals must be intense.

maxerickson 8y ago
I imagine much of the explanation is firm size growing. You don't have to scrape out a lot of Walmart's revenues to get a huge salary. You have to scrape out a pretty big chunk of the revenue of a 50 person firm to get a large salary, never mind a huge one.

abvdasker 8y ago

Simplest explanation could be a macro-level decrease in competition through greater levels of consolidation and monopoly.

deleted 8y ago

[deleted]

tdb7893 8y ago

I'm under the impression from anecdotes that competition is decreasing in the American economy (though I would love to see data on it). Industries have been consolidating and even startups seem to avoid actually competitive markets as they are less profitable.

duxup 8y ago

I feel like there is a fairly heavy executive... club that is happy to hire their buddies and keep paying each other.... they're also on the boards that make these decisions. I think that forces driving the market are often, these same guys who are getting paid.

nhfoiwehf 8y ago

Unless competition for labor was decreasing as firms gained monopsony power. https://lwp.law.harvard.edu/files/lwp/files/webpage_materials_papers_bivens_shierholz_june_13_2018.pdf https://lwp.law.harvard.edu/files/lwp/files/webpage_material...

jimbokun 8y ago

This is staggeringly naive. Executive pay is not set by "the market". Executive pay is set by other executives sitting on each others boards. How surprising this executive class somehow consistently votes to give their fellow executives a greater and greater share of their corporations' value.