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Your analysis misses a fundamental point: workers add value to an organization. The basic argument I have is that they are not sharing adequately (i.e., sustain

Your analysis misses a fundamental point: workers add value to an organization. The basic argument I have is that they are not sharing adequately (i.e., sustainably) in the rewards for their labor. Rather than dividing up the finite resources of a few ultra-rich, lets try to estimate how the rich have fared in comparison to...basically everyone else. I'm going to look at 2003-2013 for the somewhat arbitrary reasons that (a) full records are available for all years in question, and (b) a decade is a reasonable and convenient length of time. The effects we'll see are somewhat emphasized from the last 3-5 years, so the effects would be diminished if you looked at, say, the last 30 or 50 years, but the trends would still exist. (That is to say, this isn't a new problem.) I'm also going to use an inflation factor of 1.27 so the analysis can be done in constant calendar year 2013 dollars. (Numbers may not add or work out exactly because of significant figures and rounding error.) - According to the world bank, US GDP grew 14.7% from 2003 to 2013 from $14.62T to $16.77T. [1] - The total net worth of the Forbes 400 grew 89% from $1.21T to $2.29T. [2] - Total payroll tax receipts (which is a good proxy for total wages paid by average folks, since they phase out at higher earning levels) grew 4.6% from $0.905T to $0.947T. [3] - Meanwhile the total workforce grew 6.1% from 146.5M to 155.4M. [4] Based on this data, it seems fair to conclude that nearly all of the growth -- i.e., the new value created in the US economy from 2003-2013 -- went to very rich people, and very little (in fact, a negative fraction when adjusted for the growth in the workforce) went to the people actually doing the work of creating that value. Now, there isn't anything inherently wrong about that...but it a) probably isn't sustainable, and b) has created a social burden because delaying the effects requires public assistance to take up the slack -- the number of food stamp recipients rose 214% between 2003-2013. [1] http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG [2] http://www.forbes.com/2003/09/17/rich400land.html http://www.forbes.com/2003/09/17/rich400land.html [3] http://taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=46&Topic2id=50 http://taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=4... [4] http://www.dlt.ri.gov/lmi/laus/us/usadj.htm http://www.dlt.ri.gov/lmi/laus/us/usadj.htm [5] http://www.fns.usda.gov/sites/default/files/pd/SNAPsummary.pdf http://www.fns.usda.gov/sites/default/files/pd/SNAPsummary.p...

graycat 11y ago
You are saying that all or even a little more than all of the growth went to the rich people. Okay. But you also wrote: > The basic argument I have is that they are not sharing adequately (i.e., sustainably) in the rewards for their labor. Let's see: Suppose a company has 100,000 near minimum wage employees and the CEO got $50 million last year. So, for some arithmetic 50 * 10**6 / 100,000 = 500 So, distributing the CEO's salary among all the low level workers would give each worker only about $500 more a year, that is, about the same as working one week. Wouldn't even start to put the worker in the middle class. Might argue that if the CEO does his/her job well, then the company will grow, hire another 50,000, currently nearly unemployed, low wage workers and promote some of the present 100,000 workers to management positions where they start to get into the middle class. Net, to get the poor people into the middle class will take more money than the CEOs get, and one of the best approaches is to have more and better CEOs who create more and better jobs. One example may be the large company (?) that recently announced that all its employees, many at the low level, can go to college for free. Again, it appears that the key to getting the poor people into the middle class is not rich people but powerful people, yes, maybe powerful because they are rich; but to be successful they need to use their power, and smarts, and not just their money -- because even the rich people do not have even 1% of the needed money. Power? Maybe. Money? No.
- cgearhart 11y ago
  You're looking at the wrong pot of money. Dividing up executive wages among the lowest paid workers has never been considered a reasonable proposal for solving inadequate wages for workers; a more reasonable proposal involves including worker compensation in the distribution of profits from the business. While the CEO might "only" make 50 million, the organization would be expected to make much more. Let's take Bed Bath & Beyond (BBBY) as an example because, conveniently, their CEO made ~$50M in 2013. [1] Their annual earnings report indicates that they had a net income of $1.04B that year, and their corporate profile suggests they have ~60,000 employees. [2][3] If they spent 100% of their current profits on employee salaries it would yield ~$17k/employee. (For reference, the full-time minimum wage salary in 2013 was $15,080. [4]) Even under much more reasonable conditions -- let's say that we allocate 1/4 of net income to worker salaries -- then each of their 60,000 workers would earn an additional $3800, which is just about equal to the max EITC for a family with one child in 2013. [5] It's really not about CEOs getting paid huge amounts, it's that workers are neither represented nor included in sharing the prosperity of their labor -- and taxpayers are subsidizing the difference. [1] http://www.usatoday.com/story/money/business/2014/06/04/bed-bath--beyond-ceos-2013-comp-worth-50-million/9977663/ http://www.usatoday.com/story/money/business/2014/06/04/bed-... [2] http://www.marketwatch.com/investing/stock/bbby/financials http://www.marketwatch.com/investing/stock/bbby/financials [3] https://finance.yahoo.com/q/pr?s=BBBY+Profile https://finance.yahoo.com/q/pr?s=BBBY+Profile [4] http://www.epi.org/publication/minimum-wage-workers-poverty-anymore-raising/ http://www.epi.org/publication/minimum-wage-workers-poverty-... [5] http://www.irs.gov/Individuals/2013-EITC-Income-Limits,-Maximum-Credit--Amounts-and-Tax-Law-Changes http://www.irs.gov/Individuals/2013-EITC-Income-Limits,-Maxi...

graycat 11y ago

You are saying that all or even a little more than all of the growth went to the rich people. Okay. But you also wrote: > The basic argument I have is that they are not sharing adequately (i.e., sustainably) in the rewards for their labor. Let's see: Suppose a company has 100,000 near minimum wage employees and the CEO got $50 million last year. So, for some arithmetic 50 * 10**6 / 100,000 = 500 So, distributing the CEO's salary among all the low level workers would give each worker only about $500 more a year, that is, about the same as working one week. Wouldn't even start to put the worker in the middle class. Might argue that if the CEO does his/her job well, then the company will grow, hire another 50,000, currently nearly unemployed, low wage workers and promote some of the present 100,000 workers to management positions where they start to get into the middle class. Net, to get the poor people into the middle class will take more money than the CEOs get, and one of the best approaches is to have more and better CEOs who create more and better jobs. One example may be the large company (?) that recently announced that all its employees, many at the low level, can go to college for free. Again, it appears that the key to getting the poor people into the middle class is not rich people but powerful people, yes, maybe powerful because they are rich; but to be successful they need to use their power, and smarts, and not just their money -- because even the rich people do not have even 1% of the needed money. Power? Maybe. Money? No.

cgearhart 11y ago
You're looking at the wrong pot of money. Dividing up executive wages among the lowest paid workers has never been considered a reasonable proposal for solving inadequate wages for workers; a more reasonable proposal involves including worker compensation in the distribution of profits from the business. While the CEO might "only" make 50 million, the organization would be expected to make much more. Let's take Bed Bath & Beyond (BBBY) as an example because, conveniently, their CEO made ~$50M in 2013. [1] Their annual earnings report indicates that they had a net income of $1.04B that year, and their corporate profile suggests they have ~60,000 employees. [2][3] If they spent 100% of their current profits on employee salaries it would yield ~$17k/employee. (For reference, the full-time minimum wage salary in 2013 was $15,080. [4]) Even under much more reasonable conditions -- let's say that we allocate 1/4 of net income to worker salaries -- then each of their 60,000 workers would earn an additional $3800, which is just about equal to the max EITC for a family with one child in 2013. [5] It's really not about CEOs getting paid huge amounts, it's that workers are neither represented nor included in sharing the prosperity of their labor -- and taxpayers are subsidizing the difference. [1] http://www.usatoday.com/story/money/business/2014/06/04/bed-bath--beyond-ceos-2013-comp-worth-50-million/9977663/ http://www.usatoday.com/story/money/business/2014/06/04/bed-... [2] http://www.marketwatch.com/investing/stock/bbby/financials http://www.marketwatch.com/investing/stock/bbby/financials [3] https://finance.yahoo.com/q/pr?s=BBBY+Profile https://finance.yahoo.com/q/pr?s=BBBY+Profile [4] http://www.epi.org/publication/minimum-wage-workers-poverty-anymore-raising/ http://www.epi.org/publication/minimum-wage-workers-poverty-... [5] http://www.irs.gov/Individuals/2013-EITC-Income-Limits,-Maximum-Credit--Amounts-and-Tax-Law-Changes http://www.irs.gov/Individuals/2013-EITC-Income-Limits,-Maxi...