4 ms·

I think we’d get further if we asked, “should employees be paid so little”. Extreme inequality isn’t healthy for a free society, but paying CEOs less isn’t goin

by moksly 7y ago

I think we’d get further if we asked, “should employees be paid so little”. Extreme inequality isn’t healthy for a free society, but paying CEOs less isn’t going to help people who are living pay check to pay check.

merpnderp 7y ago
A better question is why are they paid so little. Right now that’s mostly supply and demand.
- arbitrarylimit 7y ago
  Why doesn't supply and demand drive down executive income then? Surely we don't believe the supply of potential executives is so limited.
  - rat9988 7y ago
    There is definitely a shortage of proven executives.
    - ativzzz 7y ago
      Can we even define what a "proven" executive is? > There is almost no persistence in CEO performance [1] Meaning that a successful performance as a CEO does not indicate that future stints will be successful. [1]: https://www.institutionalinvestor.com/article/b1db3jy3201d38/The-MBA-Myth-and-the-Cult-of-the-CEO https://www.institutionalinvestor.com/article/b1db3jy3201d38...
  - AdrianB1 7y ago
    In a large company where a top executive earns over a million dollars per year you have multiple levels of managers, directors, VP's. They all earn more than the lower level, from 20-30% to double that, otherwise there is no incentive go invest all that time and effort in a career for a 5% increase. That means the top executives need to be paid more than the people below them, that makes it quite a high starting point. Yes, paying executives more than 10 million a year is probably too much, but the number of such position is quite small and there is still the benchmarking: you cannot offer a CEO of a top 25 Fortune 500 company the same package as the CEOs of the bottom 25 in the same list. Running successfully a larger company should be rewarded better, at least in theory.
- drngdds 7y ago
  The fact that supply and demand creates this kind of situation is a good reason not to rely too much on it.
  - deleted 7y ago
    [deleted]
planetzero 7y ago
"little" is relative. An employee could be a single student living alone or a parent of 5. It's really not up to the employer or society to make sure an employee is financially responsible. Just giving people an instant raise is a band-aid and will only last a few years before inflation catches up. Education is the answer. Anyone not making enough to survive should focus on learning new skills and getting a better job. We also need to teach personal responsibility. Some people are in bad situations and are responsible. But many never learned it in the first place and have multiple kids with no way to support them or just continue to make poor financial and life decisions that lead them to a situation where they have a job and are still living paycheck-to-paycheck. No government action (unless it means total control over a person's life and decisions) or pay boost will ever fix this because the amount of money needed will just continue to increase over time.
- DangitBobby 7y ago
  It's pretty difficult to start making good decisions and dedicate all of your free time to educating yourself when you've busted your ass all day, you're tired, and you still have shit to do. This bootstraps mentality just ignores reality. I personally always really want to learn new programming languages and start new projects! But after working all day I just can't bring myself to do it and all the other things I need to do most of the time. Sometimes I can do a couple hours or devote a Saturday, but it doesn't feel like much. And I love programming, and it's one of the easiest, cheapest things to extend your knowledge in. So how is someone who works bent over 40 hours a week going to have the physical and mental energy and the money to learn to be a welder on his own?
  - planetzero 7y ago
    "It's pretty difficult to start making good decisions and dedicate all of your free time to educating yourself when you've busted your ass all day, you're tired, and you still have shit to do. This bootstraps mentality just ignores reality." I'm thinking about the big picture: preventing someone from getting in that situation in the first place, rather than trying to fix every individual case that's happening now. The bootstrap reality doesn't ignore reality. You can always find some spare time to learn something new. "So how is someone who works bent over 40 hours a week going to have the physical and mental energy and the money to learn to be a welder on his own?" We all have free time, even if you are busting your ass. Most people don't work on the weekends. It takes sacrificing your free time and forcing yourself to stay motivated, to succeed.
drngdds 7y ago
It will if you accomplish it by taking the money you would have given to CEOs and giving it to workers instead.

by moksly 7y ago

merpnderp 7y ago

A better question is why are they paid so little. Right now that’s mostly supply and demand.

arbitrarylimit 7y ago
Why doesn't supply and demand drive down executive income then? Surely we don't believe the supply of potential executives is so limited.
- rat9988 7y ago
  There is definitely a shortage of proven executives.
  - ativzzz 7y ago
    Can we even define what a "proven" executive is? > There is almost no persistence in CEO performance [1] Meaning that a successful performance as a CEO does not indicate that future stints will be successful. [1]: https://www.institutionalinvestor.com/article/b1db3jy3201d38/The-MBA-Myth-and-the-Cult-of-the-CEO https://www.institutionalinvestor.com/article/b1db3jy3201d38...
- AdrianB1 7y ago
  In a large company where a top executive earns over a million dollars per year you have multiple levels of managers, directors, VP's. They all earn more than the lower level, from 20-30% to double that, otherwise there is no incentive go invest all that time and effort in a career for a 5% increase. That means the top executives need to be paid more than the people below them, that makes it quite a high starting point. Yes, paying executives more than 10 million a year is probably too much, but the number of such position is quite small and there is still the benchmarking: you cannot offer a CEO of a top 25 Fortune 500 company the same package as the CEOs of the bottom 25 in the same list. Running successfully a larger company should be rewarded better, at least in theory.
drngdds 7y ago
The fact that supply and demand creates this kind of situation is a good reason not to rely too much on it.
- deleted 7y ago
  [deleted]

planetzero 7y ago

"little" is relative. An employee could be a single student living alone or a parent of 5. It's really not up to the employer or society to make sure an employee is financially responsible. Just giving people an instant raise is a band-aid and will only last a few years before inflation catches up. Education is the answer. Anyone not making enough to survive should focus on learning new skills and getting a better job. We also need to teach personal responsibility. Some people are in bad situations and are responsible. But many never learned it in the first place and have multiple kids with no way to support them or just continue to make poor financial and life decisions that lead them to a situation where they have a job and are still living paycheck-to-paycheck. No government action (unless it means total control over a person's life and decisions) or pay boost will ever fix this because the amount of money needed will just continue to increase over time.

DangitBobby 7y ago
It's pretty difficult to start making good decisions and dedicate all of your free time to educating yourself when you've busted your ass all day, you're tired, and you still have shit to do. This bootstraps mentality just ignores reality. I personally always really want to learn new programming languages and start new projects! But after working all day I just can't bring myself to do it and all the other things I need to do most of the time. Sometimes I can do a couple hours or devote a Saturday, but it doesn't feel like much. And I love programming, and it's one of the easiest, cheapest things to extend your knowledge in. So how is someone who works bent over 40 hours a week going to have the physical and mental energy and the money to learn to be a welder on his own?
- planetzero 7y ago
  "It's pretty difficult to start making good decisions and dedicate all of your free time to educating yourself when you've busted your ass all day, you're tired, and you still have shit to do. This bootstraps mentality just ignores reality." I'm thinking about the big picture: preventing someone from getting in that situation in the first place, rather than trying to fix every individual case that's happening now. The bootstrap reality doesn't ignore reality. You can always find some spare time to learn something new. "So how is someone who works bent over 40 hours a week going to have the physical and mental energy and the money to learn to be a welder on his own?" We all have free time, even if you are busting your ass. Most people don't work on the weekends. It takes sacrificing your free time and forcing yourself to stay motivated, to succeed.

drngdds 7y ago

It will if you accomplish it by taking the money you would have given to CEOs and giving it to workers instead.