6 ms·

Then it appears the issue is stagnant wages, not inequality in pay. Let's say that all pay of big bosses gets capped at 200k across the nation tomorrow. Does

by sgslo 8y ago

Then it appears the issue is stagnant wages, not inequality in pay. Let's say that all pay of big bosses gets capped at 200k across the nation tomorrow. Does that solve any issues with healthcare, education, etc? It seems as though the assumption is that higher pay for bosses comes solely at the expense of line workers. I don't think cutting pay of one party is going to magically increase pay of another party.

s73v3r_ 8y ago
"It seems as though the assumption is that higher pay for bosses comes solely at the expense of line workers." Yeah, it does. Money given to bosses and shareholders is money not available to pay workers.
- sgslo 8y ago
  As an example, McDonald's has a net income of of $4.686 billion. The CEO gets paid 21.7 million of that, or 0.4%. That's net income, not revenue, which was $24.6 billion. Let's be honest, the money is there to pay workers more money, and the CEO's pay does not redirect any meaningful amount of that available cash away from employees. To be clear, my issue is not that workers shouldn't be paid more, it is that justification for higher worker pay shouldn't be "my boss gets paid more than me."
  - s73v3r_ 8y ago
    I think it absolutely should be. They're benefitting from the company doing better (in fact, in many cases, they're benefitting despite the company doing shitty), why should the actual workers doing the actual work not benefit as well?
orf 8y ago
I think it's representative of a disregard for the workers, rather than the absolute value amount
annabellish 8y ago
Nobody is suggesting there's anything magical here. We're seeing increasing profits, increasing wages for high level management, and static wages for most employees. The second isn't an intrinsic issue itself, but we don't have just the second, we have all three, and _that_ is the problem. If profits and wages were both stagnant, then we would be having a different problem, but that isn't the world we live in. We live in the world where profits are going up, and all of it is going to people other than the workers.
- aeternus 8y ago
  This implies a significant arbitrage opportunity for competitors. If workers really are producing the lion-share of the value, then smaller competitors should be able to gain market share by taking the best workers, paying them slightly more than the incumbent companies, and still reap significant profits.
philipov 8y ago
The cause of the issue of stagnant wages is inequality in pay. "We took all the increased profits, so there's none left for you."
aerotwelve 8y ago
> It seems as though the assumption is that higher pay for bosses comes solely at the expense of line workers. This assumption comes from evidence in our not-so-distant past. In the 1940s-60s, income was taxed at a much higher rate in the higher brackets (50-80%+ depending on the time); this served a similar function of the executive pay cap in your hypothetical. After the highest earners in a company reached the top brackets, it didn't make much sense for the company to further increase their pay (much of it would be lost to taxes so the ROI wasn't great). So now you have all this leftover profit that, in 2018, would have went to CEO pay or bonuses. What is there to do with it? Invest in the company of course: give the best performing line-level employees raises, start internal training programs, kickstart moonshot R&D ideas, and so on. (Unions also helped in ensuring that the rank and file got pay increases commensurate with management's raises) Don't get me wrong, the highest earners were still very wealthy (and had plenty of yachts/summer homes/other symbols we associate with the 0.1%) and it was common to give them raises every year, but the higher marginal rates really did help in "forcing" profits downward.
deleted 8y ago
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by sgslo 8y ago

s73v3r_ 8y ago

"It seems as though the assumption is that higher pay for bosses comes solely at the expense of line workers." Yeah, it does. Money given to bosses and shareholders is money not available to pay workers.

sgslo 8y ago
As an example, McDonald's has a net income of of $4.686 billion. The CEO gets paid 21.7 million of that, or 0.4%. That's net income, not revenue, which was $24.6 billion. Let's be honest, the money is there to pay workers more money, and the CEO's pay does not redirect any meaningful amount of that available cash away from employees. To be clear, my issue is not that workers shouldn't be paid more, it is that justification for higher worker pay shouldn't be "my boss gets paid more than me."
- s73v3r_ 8y ago
  I think it absolutely should be. They're benefitting from the company doing better (in fact, in many cases, they're benefitting despite the company doing shitty), why should the actual workers doing the actual work not benefit as well?

orf 8y ago

I think it's representative of a disregard for the workers, rather than the absolute value amount

annabellish 8y ago

Nobody is suggesting there's anything magical here. We're seeing increasing profits, increasing wages for high level management, and static wages for most employees. The second isn't an intrinsic issue itself, but we don't have just the second, we have all three, and _that_ is the problem. If profits and wages were both stagnant, then we would be having a different problem, but that isn't the world we live in. We live in the world where profits are going up, and all of it is going to people other than the workers.

aeternus 8y ago
This implies a significant arbitrage opportunity for competitors. If workers really are producing the lion-share of the value, then smaller competitors should be able to gain market share by taking the best workers, paying them slightly more than the incumbent companies, and still reap significant profits.

philipov 8y ago

The cause of the issue of stagnant wages is inequality in pay. "We took all the increased profits, so there's none left for you."

aerotwelve 8y ago

> It seems as though the assumption is that higher pay for bosses comes solely at the expense of line workers. This assumption comes from evidence in our not-so-distant past. In the 1940s-60s, income was taxed at a much higher rate in the higher brackets (50-80%+ depending on the time); this served a similar function of the executive pay cap in your hypothetical. After the highest earners in a company reached the top brackets, it didn't make much sense for the company to further increase their pay (much of it would be lost to taxes so the ROI wasn't great). So now you have all this leftover profit that, in 2018, would have went to CEO pay or bonuses. What is there to do with it? Invest in the company of course: give the best performing line-level employees raises, start internal training programs, kickstart moonshot R&D ideas, and so on. (Unions also helped in ensuring that the rank and file got pay increases commensurate with management's raises) Don't get me wrong, the highest earners were still very wealthy (and had plenty of yachts/summer homes/other symbols we associate with the 0.1%) and it was common to give them raises every year, but the higher marginal rates really did help in "forcing" profits downward.

deleted 8y ago

[deleted]