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The CEO and the workers are not in competition with each other for similar jobs. Their pay is not at all connected in any way what so ever. Each person's pay is

The CEO and the workers are not in competition with each other for similar jobs. Their pay is not at all connected in any way what so ever. Each person's pay is determined by what the market rate is. The politicians in Washington have convinced everyone that we should blame CEOs for the fact that our representatives have done a terrible job of maintaining a stable competitive market for low wage earners. The problem isn't that there are too many CEOs. There are too few. The problem with John Deere isn't it's success, but more specifically it's success at forcing others out of the market. When there are only 2 big employers in your town, guess what? You're going to make whatever they hell they want to pay you. But yeah, let's blame the CEOs.

squarefoot 5y ago
> let's blame the CEOs. I don't blame the CEOs, or their pay for that matter, I blame a system in which if a CEO goes home, s/he can spend one year golfing and the following one choosing among the offers from his/hers golfing friends, while if a worker becomes unemployed, s/he could starve within one month while having no way to find a new job.
oceanghost 5y ago
> Their pay is not at all connected in any way what so ever. This is so false that I have trouble believing you are serious. All pay comes from a fixed source, "income", and the CEO/board is largely who determines how the CEO and workers split up the money.
- sjtindell 5y ago
  When an employee is hired they get a contract. Everyone is paid based on that. Which is usually determined by a market rate. What are you talking about?
  - bestcoder69 5y ago
    ...and where does the market rate come from? Written by God on a stone tablet, never to be questioned by management?
    - blackoil 5y ago
      By the Gods of demand and supply adjusted by God of minimum wages. No matter how much mgmt question it they'll not be able to pay 10$/hr unless someone is ready to work at that rate and if allowed by the govt.
      - h0l0cube 5y ago
        > if allowed by the govt. ... and if unchallenged by organized labor
    - ultrablack 5y ago
      Google is your friend.
      - crooked-v 5y ago
        Google tells me that unskilled delivery drivers and in some places even fast food workers are getting $20/hour right now.
    - 1123581321 5y ago
      At a company that size, it’s typically based on how well they are filling their pipeline of candidates. Difficulty finding people pressures pay to rise (this is the pressure UAW is exploiting.) They also conduct salary studies and survey employees to figure out if they’re satisfied by their pay. So while there may temporarily be a pay schedule, it’s constantly revised. In a large company there are many roles and schedules so at any point, many are somewhere in the process of changing. The UAW situation is different. Unions negotiate contracts that affect all employees. These are set by the ability of the union and management to negotiate, with some pressure from market rates. These are closer to the “stone tablet” idea of yours, but only fixed until the next negotiation. There is no ‘dividing up the income’ activity, like the other user suggested. Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue. This is a simple explanation that elides a lot of detail, but hopefully helps.
  - Haga 5y ago
    There it is. Straight to the divine, external undiscusable, holy forces decided that. It's folly to ponder God's wisdom, the discussion has ended, because there never can be one.
  - deleted 5y ago
    [deleted]
  - mushbino 5y ago
    Employers and government regulations determine pay. If the market gets too high in one region, they simply move to a lower one. Right now the market has determined that pay is too low to fill job vacancies, but employers are not raising wages, not the market.
  - hnbad 5y ago
    The market rate is determined by what employees are willing to accept vs what employers can get away with offering. The employees just demonstrated that they're no longer willing to accept what they are currently getting. The market rate just went up, I'd say.
  - pydry 5y ago
    Employers threaten employees with a loss of their livelihood. Employees threaten employers with a loss of business. The decided upon rate is determined by the outcome of this struggle. That's how the market rate sausage is made. It's not an impersonal objective arbiter of truth. It's a reflection of relative levels of power and relative levels of desperation.
- whiddershins 5y ago
  [flagged]
  - oceanghost 5y ago
    How is it hard to understand that if a person was in charge of deciding how much HE made, at the expense of others, he would favor himself?
    - adam_arthur 5y ago
      There's a market rate dictated by supply and demand for labor. In some lines of business you can overpay and do ok. But imagine a restaurant paying double the wage of one next door. Likely this reflects through into pricing and makes them non-competitive/prone to failure, as restaurants are low margin businesses. The US has had a large surplus of low skilled labor for the past few decades, thus low bargaining power. There's a pretty obvious reason why, but I'll leave it for you to guess.
    - mjburgess 5y ago
      Yes, but CEOs arent in charge of how much they make. Labour is priced by the market. Prices aren't "decided" by anyone -- this is just something newspapers rant about to create outrage.
      - dragonwriter 5y ago
        > Labour is priced by the market. The market is an idealized abstraction, not a real thing that exists. CEO pay is decided by Boards of Directors, which CEOs tend to be on, and which are part of a narrow, highly connected class that CEOs are also members of. > Prices aren't "decided" by anyone Yes, the prices that a firm will offer for particular work are decided by particular decision-makers at the firm, not abstract outside forces. The market is a model of the the aggregate of factors influencing the decisions those people make, and the decisions employees make about accepting work.
        mjburgess 5y ago
- randomdata 5y ago
  One’s willingness to stick around determines the split. If workers in a given job will work for $x, there is no need to pay more. You know this is true as you are watching a situation where workers will no longer work for $x play out. The difficulty in keeping one job filled is not dependent on another job. The difficulty in hiring a janitor does not impact the difficulty of hiring a software developer.
bestcoder69 5y ago
No, let's not blame the CEOs. Let's negotiate better contracts so they earn less and the little guy earns more.
- nerfhammer 5y ago
  If you set the CEO pay to zero and gave it to all the workers it would amount to a microscopic raise, and presumably wouldn't make the company any better run. CEO salary / number of workers / number of working hours in a year = 14.75 million / 70k / 2080 = $0.10
  - bestcoder69 5y ago
    Yes, that would be a stupid way to raise wages. I guess I assumed I didn't need to explain that I'm not suggesting a contract that literally says to only divvy up the CEO's salary. This is the most pedantic response to anything I think I've ever read.
    - mbrameld 5y ago
      I think you'll get a better discussion (if that's what you're after) if you tell us exactly what you're suggesting instead of what you're not suggesting. The idea of negotiating better contacts for workers is not a novel one, you're not breaking any ground there. So how, exactly, does that happen?
      - bestcoder69 5y ago
        No ground is being broken in this comment section whatsoever, and I'm not in a position to break any ground either even if I sit for a while and think really hard (...fuck). But to contribute what I suggest (again, without breaking ground): capitalists take 30% of all income generated, for themselves. I haven't looked up the financials for John Deere, but I mean that's the ratio when you take the U.S. as a whole. That 30% is a wayyyy bigger piece of the pie than divying up a CEO's income, which is probably a tiny part of that (on average) 30%.
    - 5y ago
PostThisTooFast 5y ago
OK, let’s blame our representatives for allowing software patents to persist, and scumbag outfits like John Deere to coast by ripping off Americans.
mschuster91 5y ago
> Each person's pay is determined by what the market rate is. As long as people are effectively forced to work under even the most exploitative conditions, the market rate is going to be depressed by desperation. The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition! That is why the COVID relief packages were able to overturn the market - they allowed people to leave their old jobs (if they still existed, that is) and search for new, better employment without the pressure of starving as somewhat around 60-70% of Americans, under normal conditions, would not have saved enough money to cover even a single week of unemployment.
- charcircuit 5y ago
  >The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition! That safety net is called your savings account. I could live off my savings alone for years before I find another job.
wallaBBB 5y ago
>When there are only 2 big employers in your town, guess what? You're going to make whatever they hell they want to pay you. >But yeah, let's blame the CEOs. hmmm, who should we blame for destroying the job market in their town? or who should be blamed for trying to sabotage organized labor? poor CEOs getting all the blame for the stuff that is being done by this unknown force...
jollybean 5y ago
"Their pay is not at all connected " They work for the same company, with the same surpluses etc. They are very 'connected'.
imtringued 5y ago
The big difference is that the CEO has no idea what to do with his money except invest it into a stagnant economy whose consumer market is failing to grow because every CEO pays their workers poorly. In other words, giving the CEO money is a sign of an inefficient market.
mattbrewsbytes 5y ago
Some blame lies at the feet of CEO's. Some at the feet of the government. When large corporations fail, they socialize their failures by getting bailouts from the government. There are never bailouts for individuals. Whenever a corporation has extra capital, they do things like buy back stock, rarely ever give it to employees, it simply isn't profitable for them to do so. These are choices a CEO makes in running their company. The government allows for a bit much capitalism when it comes to health care, in my opinion. The added costs for health care are commonly thrust onto all employees, those at the bottom of the pay scale are impacted the most because they make the least. An out of pocket health care expense for a CEO is a rounding error but can be financially devastating to the lowest paid person that has coverage. I get that they are different jobs. For example if there were a software error in a JD tractor that caused many deaths (i.e. some safety feature fails) its more likely a CEO/CxO would have to step down for mis-managing something than a bunch of factory workers. In general, the pay differences are really out of whack though.

squarefoot 5y ago

> let's blame the CEOs. I don't blame the CEOs, or their pay for that matter, I blame a system in which if a CEO goes home, s/he can spend one year golfing and the following one choosing among the offers from his/hers golfing friends, while if a worker becomes unemployed, s/he could starve within one month while having no way to find a new job.

oceanghost 5y ago

> Their pay is not at all connected in any way what so ever. This is so false that I have trouble believing you are serious. All pay comes from a fixed source, "income", and the CEO/board is largely who determines how the CEO and workers split up the money.

sjtindell 5y ago
When an employee is hired they get a contract. Everyone is paid based on that. Which is usually determined by a market rate. What are you talking about?
- bestcoder69 5y ago
  ...and where does the market rate come from? Written by God on a stone tablet, never to be questioned by management?
  - blackoil 5y ago
    By the Gods of demand and supply adjusted by God of minimum wages. No matter how much mgmt question it they'll not be able to pay 10$/hr unless someone is ready to work at that rate and if allowed by the govt.
    - h0l0cube 5y ago
      > if allowed by the govt. ... and if unchallenged by organized labor
  - ultrablack 5y ago
    Google is your friend.
    - crooked-v 5y ago
      Google tells me that unskilled delivery drivers and in some places even fast food workers are getting $20/hour right now.
  - 1123581321 5y ago
    At a company that size, it’s typically based on how well they are filling their pipeline of candidates. Difficulty finding people pressures pay to rise (this is the pressure UAW is exploiting.) They also conduct salary studies and survey employees to figure out if they’re satisfied by their pay. So while there may temporarily be a pay schedule, it’s constantly revised. In a large company there are many roles and schedules so at any point, many are somewhere in the process of changing. The UAW situation is different. Unions negotiate contracts that affect all employees. These are set by the ability of the union and management to negotiate, with some pressure from market rates. These are closer to the “stone tablet” idea of yours, but only fixed until the next negotiation. There is no ‘dividing up the income’ activity, like the other user suggested. Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue. This is a simple explanation that elides a lot of detail, but hopefully helps.
- Haga 5y ago
  There it is. Straight to the divine, external undiscusable, holy forces decided that. It's folly to ponder God's wisdom, the discussion has ended, because there never can be one.
- deleted 5y ago
  [deleted]
- mushbino 5y ago
  Employers and government regulations determine pay. If the market gets too high in one region, they simply move to a lower one. Right now the market has determined that pay is too low to fill job vacancies, but employers are not raising wages, not the market.
- hnbad 5y ago
  The market rate is determined by what employees are willing to accept vs what employers can get away with offering. The employees just demonstrated that they're no longer willing to accept what they are currently getting. The market rate just went up, I'd say.
- pydry 5y ago
  Employers threaten employees with a loss of their livelihood. Employees threaten employers with a loss of business. The decided upon rate is determined by the outcome of this struggle. That's how the market rate sausage is made. It's not an impersonal objective arbiter of truth. It's a reflection of relative levels of power and relative levels of desperation.
whiddershins 5y ago
[flagged]
- oceanghost 5y ago
  How is it hard to understand that if a person was in charge of deciding how much HE made, at the expense of others, he would favor himself?
  - adam_arthur 5y ago
    There's a market rate dictated by supply and demand for labor. In some lines of business you can overpay and do ok. But imagine a restaurant paying double the wage of one next door. Likely this reflects through into pricing and makes them non-competitive/prone to failure, as restaurants are low margin businesses. The US has had a large surplus of low skilled labor for the past few decades, thus low bargaining power. There's a pretty obvious reason why, but I'll leave it for you to guess.
  - mjburgess 5y ago
    Yes, but CEOs arent in charge of how much they make. Labour is priced by the market. Prices aren't "decided" by anyone -- this is just something newspapers rant about to create outrage.
    - dragonwriter 5y ago
      > Labour is priced by the market. The market is an idealized abstraction, not a real thing that exists. CEO pay is decided by Boards of Directors, which CEOs tend to be on, and which are part of a narrow, highly connected class that CEOs are also members of. > Prices aren't "decided" by anyone Yes, the prices that a firm will offer for particular work are decided by particular decision-makers at the firm, not abstract outside forces. The market is a model of the the aggregate of factors influencing the decisions those people make, and the decisions employees make about accepting work.
      - mjburgess 5y ago
randomdata 5y ago
One’s willingness to stick around determines the split. If workers in a given job will work for $x, there is no need to pay more. You know this is true as you are watching a situation where workers will no longer work for $x play out. The difficulty in keeping one job filled is not dependent on another job. The difficulty in hiring a janitor does not impact the difficulty of hiring a software developer.

bestcoder69 5y ago

No, let's not blame the CEOs. Let's negotiate better contracts so they earn less and the little guy earns more.

nerfhammer 5y ago
If you set the CEO pay to zero and gave it to all the workers it would amount to a microscopic raise, and presumably wouldn't make the company any better run. CEO salary / number of workers / number of working hours in a year = 14.75 million / 70k / 2080 = $0.10
- bestcoder69 5y ago
  Yes, that would be a stupid way to raise wages. I guess I assumed I didn't need to explain that I'm not suggesting a contract that literally says to only divvy up the CEO's salary. This is the most pedantic response to anything I think I've ever read.
  - mbrameld 5y ago
    I think you'll get a better discussion (if that's what you're after) if you tell us exactly what you're suggesting instead of what you're not suggesting. The idea of negotiating better contacts for workers is not a novel one, you're not breaking any ground there. So how, exactly, does that happen?
    - bestcoder69 5y ago
      No ground is being broken in this comment section whatsoever, and I'm not in a position to break any ground either even if I sit for a while and think really hard (...fuck). But to contribute what I suggest (again, without breaking ground): capitalists take 30% of all income generated, for themselves. I haven't looked up the financials for John Deere, but I mean that's the ratio when you take the U.S. as a whole. That 30% is a wayyyy bigger piece of the pie than divying up a CEO's income, which is probably a tiny part of that (on average) 30%.
  - 5y ago

PostThisTooFast 5y ago

OK, let’s blame our representatives for allowing software patents to persist, and scumbag outfits like John Deere to coast by ripping off Americans.

mschuster91 5y ago

> Each person's pay is determined by what the market rate is. As long as people are effectively forced to work under even the most exploitative conditions, the market rate is going to be depressed by desperation. The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition! That is why the COVID relief packages were able to overturn the market - they allowed people to leave their old jobs (if they still existed, that is) and search for new, better employment without the pressure of starving as somewhat around 60-70% of Americans, under normal conditions, would not have saved enough money to cover even a single week of unemployment.

charcircuit 5y ago
>The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition! That safety net is called your savings account. I could live off my savings alone for years before I find another job.

wallaBBB 5y ago

>When there are only 2 big employers in your town, guess what? You're going to make whatever they hell they want to pay you. >But yeah, let's blame the CEOs. hmmm, who should we blame for destroying the job market in their town? or who should be blamed for trying to sabotage organized labor? poor CEOs getting all the blame for the stuff that is being done by this unknown force...

jollybean 5y ago

"Their pay is not at all connected " They work for the same company, with the same surpluses etc. They are very 'connected'.

imtringued 5y ago

The big difference is that the CEO has no idea what to do with his money except invest it into a stagnant economy whose consumer market is failing to grow because every CEO pays their workers poorly. In other words, giving the CEO money is a sign of an inefficient market.

mattbrewsbytes 5y ago

Some blame lies at the feet of CEO's. Some at the feet of the government. When large corporations fail, they socialize their failures by getting bailouts from the government. There are never bailouts for individuals. Whenever a corporation has extra capital, they do things like buy back stock, rarely ever give it to employees, it simply isn't profitable for them to do so. These are choices a CEO makes in running their company. The government allows for a bit much capitalism when it comes to health care, in my opinion. The added costs for health care are commonly thrust onto all employees, those at the bottom of the pay scale are impacted the most because they make the least. An out of pocket health care expense for a CEO is a rounding error but can be financially devastating to the lowest paid person that has coverage. I get that they are different jobs. For example if there were a software error in a JD tractor that caused many deaths (i.e. some safety feature fails) its more likely a CEO/CxO would have to step down for mis-managing something than a bunch of factory workers. In general, the pay differences are really out of whack though.