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> 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,

> 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.
    - consp 5y ago
      > survey employees to figure out if they’re satisfied by their pay. If those are done they are likely ignored or used to figure out how much lower the pay can be. And a strike is a result of that. The idea that employees cannot profit from a company doing well, not profit from their own labor and simply get a fixed low pay is insulting.
      - 1123581321 5y ago
        Yes, I tried to distinguish between market research and market pressure setting prices and the more negotiation-based process of a large unionized employer.
    - jollybean 5y ago
      "There is no ‘dividing up the income" Yes, that is effectively what is happening. The value is 'divided' between customers, suppliers, employees, executives and investors and it will go to who has the most power. If the power balance means they can charge higher prices (less surplus to customers), then that money will go to the remaining parties. If suppliers are commodity, then it's a 3 way fight between execs, employees and investors. If the company sees increasing sales and is flush with cash, the execs and workers will try to negotiate for higher pay. "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." That process boils down to dividing up surpluses.
  - flyinglizard 5y ago
    The same way all commodity pricing is determined - when you don’t get enough of what you want, you pay more, or go somewhere there’s more supply. A “better” CEO would surely minimize labor expenses, by automating, moving to cheaper regions, etc. In most businesses, labor is the largest expenditure.
- 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.

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.
  - consp 5y ago
    > survey employees to figure out if they’re satisfied by their pay. If those are done they are likely ignored or used to figure out how much lower the pay can be. And a strike is a result of that. The idea that employees cannot profit from a company doing well, not profit from their own labor and simply get a fixed low pay is insulting.
    - 1123581321 5y ago
      Yes, I tried to distinguish between market research and market pressure setting prices and the more negotiation-based process of a large unionized employer.
  - jollybean 5y ago
    "There is no ‘dividing up the income" Yes, that is effectively what is happening. The value is 'divided' between customers, suppliers, employees, executives and investors and it will go to who has the most power. If the power balance means they can charge higher prices (less surplus to customers), then that money will go to the remaining parties. If suppliers are commodity, then it's a 3 way fight between execs, employees and investors. If the company sees increasing sales and is flush with cash, the execs and workers will try to negotiate for higher pay. "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." That process boils down to dividing up surpluses.
- flyinglizard 5y ago
  The same way all commodity pricing is determined - when you don’t get enough of what you want, you pay more, or go somewhere there’s more supply. A “better” CEO would surely minimize labor expenses, by automating, moving to cheaper regions, etc. In most businesses, labor is the largest expenditure.
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.