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It will definitely be meaningful specially for those huge multinational with CEO's earning extreme amount. Given that the article said something like 300:1 rati

by tmd83 12y ago

It will definitely be meaningful specially for those huge multinational with CEO's earning extreme amount. Given that the article said something like 300:1 ratio of salaries in some companies even if your median wage salary is off by 2 i will still give you an idea that the CEO gets over 100 times the pay of a median worker. It might need some work to process and I am fairly certain the protest didn't start for that reason. Companies decided that they don't want to expose to massive gulp in payscale and then found the reason to protest.

LLWM 12y ago
It's definitely much _less_ meaningful for a multinational company than for one where all its workers live in the same city.
- ptaipale 12y ago
  Certainly. Just to illustrate this, assume a small and simple multinational company that has headquarters and marketing (100 staff) in the US and manufacturing workforce (150 staff) in Vietnam. That's all the workforce. The median salary in the company will be about $200 per month (because a majority of workforce is in a low-pay country). If the CEO makes $250,000 per year (which is not particularly much for a company of this size), she'll earn an outrageous 100 times as much as the median in the company. Now let's assume that activists are unhappy with this 100 times difference and there's a boycott in order to reduce the CEO pay in proportion to workers. Guess what will happen? Half of the workforce in Vietnam is kicked out and the gap in production is bought from a manufacturing partner in Pakistan (where the workers will earn $150 per month). CEO pay is unchanged, but the median pay is now $2500 (pay of a not-high-status sales assistant in US). The CEO now earns only 10 times as much as the median worker! Did things improve for the poor workers? Well, you could say so, because some people in Pakistan got a job, but the actual outcome still is that the people who work on the product now get less than before. Road to hell is paved with good intentions, and naive activists are hit by the law of unintended consequences. Yes, the CEO-to-median figures are not very meaningful for a multinational company.

by tmd83 12y ago

LLWM 12y ago

It's definitely much _less_ meaningful for a multinational company than for one where all its workers live in the same city.

ptaipale 12y ago
Certainly. Just to illustrate this, assume a small and simple multinational company that has headquarters and marketing (100 staff) in the US and manufacturing workforce (150 staff) in Vietnam. That's all the workforce. The median salary in the company will be about $200 per month (because a majority of workforce is in a low-pay country). If the CEO makes $250,000 per year (which is not particularly much for a company of this size), she'll earn an outrageous 100 times as much as the median in the company. Now let's assume that activists are unhappy with this 100 times difference and there's a boycott in order to reduce the CEO pay in proportion to workers. Guess what will happen? Half of the workforce in Vietnam is kicked out and the gap in production is bought from a manufacturing partner in Pakistan (where the workers will earn $150 per month). CEO pay is unchanged, but the median pay is now $2500 (pay of a not-high-status sales assistant in US). The CEO now earns only 10 times as much as the median worker! Did things improve for the poor workers? Well, you could say so, because some people in Pakistan got a job, but the actual outcome still is that the people who work on the product now get less than before. Road to hell is paved with good intentions, and naive activists are hit by the law of unintended consequences. Yes, the CEO-to-median figures are not very meaningful for a multinational company.