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That basically fixes the CEO's wages at whatever that multiplier is * minimum wage because the lowest paid worker's wages probably won't increase over time. A

That basically fixes the CEO's wages at whatever that multiplier is * minimum wage because the lowest paid worker's wages probably won't increase over time. A large-enough company is always going to have entry-level employees and even if each individual's wages increase, the lowest paid worker is always going to be an employee who is brand new to the company in the lowest-paid position. Hiring CEOs is a competitive marketplace like anything else and boards need to attract the best individuals in whatever way works best -- maybe the most fair way to compensate CEOs is through one-time, slow-vesting stock grants so that the CEO's "salary" they make each year is closely correlated to the value of the company (and therefore, to their success).

pmorici 11y ago
I said _instead_ of minimum wage laws. This article seems to be saying that a portion of CEO pay can't be attributed to free market competition for talent alone.
Someone 11y ago
"A large-enough company is always going to have entry-level employees" I bet they would outsource all such jobs, even more so than they do now. The typical big company doesn't employ cleaners or restaurant staff, they hire companies who do it for them. I also bet that 'schools' would be created where what used to be new employees get trained for years, partly on the job, and get some compensation for it (a bit like the partner system in legal firms, but one where the not-yet partners technically work for a different corporal entity) At the companies providing those low-paid services, there would be pressure to automate away the lowest paid jobs not because they can be done cheaper, but because they would allow management a pay rise. It would be interesting to see what people would come up with, but I'm not sure I would find it an improvement over what we have now. And that competitive market place may only exist because those in the set of CEOs artificially keep that set small by only shopping within their group.

pmorici 11y ago

I said _instead_ of minimum wage laws. This article seems to be saying that a portion of CEO pay can't be attributed to free market competition for talent alone.

Someone 11y ago

"A large-enough company is always going to have entry-level employees" I bet they would outsource all such jobs, even more so than they do now. The typical big company doesn't employ cleaners or restaurant staff, they hire companies who do it for them. I also bet that 'schools' would be created where what used to be new employees get trained for years, partly on the job, and get some compensation for it (a bit like the partner system in legal firms, but one where the not-yet partners technically work for a different corporal entity) At the companies providing those low-paid services, there would be pressure to automate away the lowest paid jobs not because they can be done cheaper, but because they would allow management a pay rise. It would be interesting to see what people would come up with, but I'm not sure I would find it an improvement over what we have now. And that competitive market place may only exist because those in the set of CEOs artificially keep that set small by only shopping within their group.