The CTA Doomsday Plan

[southsider2k5]

Here's the other point I'd add on to this and to what I said earlier...

 

What forces are there that you can name that would make the average American's wage go down? Things like a poor economy, crashes, issues at a particular company, rising production costs, competition from overseas, etc. In general, you hear more about wage and benefit cuts whenever some business or some sector of the economy struggles for whatever reason. Hell, just the movement of Walmart in an area was enough to force all the grocery stores out here to make their employees take a 1/3 pay cut or so.

 

Now, what forces can you name, or what market conditions can you name that would make salaries in upper management go down? Thus far, the arguments here have been that you have to keep paying CEO's, especially in tough times, because you have to retain top talent. But as far as I can tell, when things are going well in a company, you also want to pay CEO's well to hold onto them then because they're doing a good job. So, I ask...what force out there exists that is actually counterbalancing the drive to increase CEO wages? What market situation could exist that would push them downwards?

 

The irony is that you are forgetting to mention the biggest source of wage depression in the US today...

[NorthSideSox72]

The irony is that you are forgetting to mention the biggest source of wage depression in the US today...

Are you referring to illegal immigration? Because I'd suggest there are other, bigger players.

 

[southsider2k5]

Funny you should mention that. At United, the CEO did take a paycut of about 15% to show he was serious about turning the airline around. Symbolic really, because it was about 100K a year savings to the company - but upon emergence, the CEO received a 300K bonus - equivalent to a raise of 30% for that year and 1% of United's total stock. In fact about 150 million of the 1.8 billion dollar market cap on UAL went to 400 board members and managers. The workers, who all took paycuts of 25-40 percent? They got nothing.

 

I am curious about something. Do you have knowledge of the feduciary duties, rights, and responsibilities of a board of directors and upper management teams?

[southsider2k5]

Are you referring to illegal immigration? Because I'd suggest there are other, bigger players.

 

The total workforce in the US is only 150 million people. Adding somewhere around 10% of people to the supply who are willing to work for anything has a huge depressing effect on wages. It takes a hell of a lot more money out of workers pocket than any CEO stock option bonus, which is what most of the huge bonus numbers that you see today are. But then again, paper gains don't make for good arguements either.

[NorthSideSox72]

I am curious about something. Do you have knowledge of the feduciary duties, rights, and responsibilities of a board of directors and upper management teams?

Of course, part of the problem there is that nowadays, boards of directors are so intertwined with the companies they are supposed to oversee (sometimes even being the same people), that the check and balance they are supposed to provide no longer exists.

 

The other major check that is supposed to keep executive salaries under some degree of control is the publishing of those salaries and their effect on public entities' stock prices. That's why the push lately to show FULL compensation information. But, unfortunately, the markets are now so used to the absurdly high salaries of executives that they no longer flinch at a CEO making $25M a year at a company that is losing $50M a year.

 

[NorthSideSox72]

The total workforce in the US is only 150 million people. Adding somewhere around 10% of people to the supply who are willing to work for anything has a huge depressing effect on wages. It takes a hell of a lot more money out of workers pocket than any CEO stock option bonus, which is what most of the huge bonus numbers that you see today are. But then again, paper gains don't make for good arguements either.

I agree they have an effect - but I'd suggest there are other, stronger forces at work. These for example:

 

--An education system that is underwhelming, and getting worse, when compared to other first world countries (also includes lacking in adult training)

--The growing habituation of Americans to acquiring more "stuff" - products that are cheaply made, by cheap labor, all competing for fewer dollars

--The continued decrease in union leverage in labor (which, while necessary for the good of the economy, has a short term negative effect)

--Massively increasing costs of health care (lots of parties carry some blame here)

 

I'd suggest all of those have a greater negative effect than the presence of illegal labor, or at least on par with it.

 

[Texsox]

The total workforce in the US is only 150 million people. Adding somewhere around 10% of people to the supply who are willing to work for anything has a huge depressing effect on wages. It takes a hell of a lot more money out of workers pocket than any CEO stock option bonus, which is what most of the huge bonus numbers that you see today are. But then again, paper gains don't make for good arguements either.

 

So it is bad for America when business owners are able to pay lower wages? IIRC you taught me that owners need bigger profits so they can reinvest in the businesses and hire more people and everyone gains, we receive more tax revenues, etc. And how are we adding these people? I thought they were already here and working jobs.

[Texsox]

I agree they have an effect - but I'd suggest there are other, stronger forces at work. These for example:

 

--An education system that is underwhelming, and getting worse, when compared to other first world countries (also includes lacking in adult training)

--The growing habituation of Americans to acquiring more "stuff" - products that are cheaply made, by cheap labor, all competing for fewer dollars

--The continued decrease in union leverage in labor (which, while necessary for the good of the economy, has a short term negative effect)

--Massively increasing costs of health care (lots of parties carry some blame here)

 

I'd suggest all of those have a greater negative effect than the presence of illegal labor, or at least on par with it.

 

Manufacturing jobs being moved overseas

Customer Service jobs being moved overseas

[NorthSideSox72]

Manufacturing jobs being moved overseas

Customer Service jobs being moved overseas

These do not have a depressing effect on wages - in fact, they have an increasing effect. Its negative effect in the short run is more people WITHOUT wages. In the long run, it ships lower paying jobs overseas, decreases corporate costs, and allows them to invest more in higher level folks here in the states. So long run, those have an increasing effect on wages.

 

[southsider2k5]

Of course, part of the problem there is that nowadays, boards of directors are so intertwined with the companies they are supposed to oversee (sometimes even being the same people), that the check and balance they are supposed to provide no longer exists.

 

The other major check that is supposed to keep executive salaries under some degree of control is the publishing of those salaries and their effect on public entities' stock prices. That's why the push lately to show FULL compensation information. But, unfortunately, the markets are now so used to the absurdly high salaries of executives that they no longer flinch at a CEO making $25M a year at a company that is losing $50M a year.

 

The trainwreck that is Sarbines Oxley was supposed to fix that mess. Ha. Ah usual, more government regulation had the opposite of the intended effects.

 

It added more costs to doing business, has led to a flight of companies willing to have their stock traded in the US because of regulatory costs, and it led to an explosion of CEO and executive salaries. Now with all of that stuff being public disclosed knowledge all it led to is things becoming like baseball free agency and everyone wanting to out do each other. The idea was that stockholders and the public were supposed to be outraged at the high numbers, instead now that they know what their competitors are paying, they know that they have to outdo those numbers or they could lose their valued executives.

 

Now back to feduciary duties, I don't think most people also realize that management and the board of directors can be sued for their business decesions that they make and held liable to the creditors for those moves. Its another yet another risk that Joe Lineworker doesn't have. Its not like people are going to take on all of this out of the goodness of their hearts. If that were the case, public companies would be fighting not for profits for people to run their organizations, and not the opposite. And I know it is cute to dabble in "what ifs" and all of that stuff, but the reality is that things don't happen that way. For some strange reason, people don't want to work 100 weeks, risk their professional careers, give up control of the companies, put their personal fortunes on the line, and do it for nothing. Its just like anything, where if people take a risk, they want at least the promise of reward comisserate with the risk they are taking. That is the reality of the situation.

[Texsox]

These do not have a depressing effect on wages - in fact, they have an increasing effect. Its negative effect in the short run is more people WITHOUT wages. In the long run, it ships lower paying jobs overseas, decreases corporate costs, and allows them to invest more in higher level folks here in the states. So long run, those have an increasing effect on wages.

 

We are losing higher paying jobs and replacing them with lower paying jobs. The demand for these jobs go up, the qualified and willing pool goes up. Wages remain low.

 

 

Manufacturing jobs paid very well. Tool and Die makers well over $50,000 per year. Industrial Maintenance equal to that. All the way down to line assembly work. Same formerly with customer service.

[Texsox]

Now back to feduciary duties, I don't think most people also realize that management and the board of directors can be sued for their business decesions that they make and held liable to the creditors for those moves.

 

Insurance. The companies buy policies to protect their board members. http://www.insurecast.com/html/directors_and_officers.asp in case you are not familiar.

 

I understand what you are saying, why work some of these jobs for only $2,000,000 a year and *not* expect a bonus. Because there are so many companies lining up to offer you $3,000,000? You make it seem as soon as a CEO of a company in bankruptcy is available, everyone is clamoring for their services. The truth is somewhere in between. I'd like to see some examples of them leaving and finding better paying jobs.

[NorthSideSox72]

We are losing higher paying jobs and replacing them with lower paying jobs. The demand for these jobs go up, the qualified and willing pool goes up. Wages remain low.

 

Manufacturing jobs paid very well. Tool and Die makers well over $50,000 per year. Industrial Maintenance equal to that. All the way down to line assembly work. Same formerly with customer service.

Your first sentence, again, isn't really accurate. Manufacturing jobs (and customer service jobs), in most industries, had been going down in relative wage for some time. By sending them overseas, if a person loses (or cannot get) a manufacturing job, they will get a different one eventually. Yes, I suppose some will end up flipping burgers (which, sadly, doesn't pay a lot less than many of those industrial jobs do). But many will also find other jobs with wages that are not decreasing like the manufacturing ones were. In the long run, wages go up due to the effect. IN short, you have fewer, higher paying jobs.

 

Now, they would go up MORE, and for more people, if we had a better education system, which is something I mentioned earlier.

 

[southsider2k5]

So it is bad for America when business owners are able to pay lower wages? IIRC you taught me that owners need bigger profits so they can reinvest in the businesses and hire more people and everyone gains, we receive more tax revenues, etc. And how are we adding these people? I thought they were already here and working jobs.

 

That's funny, because I keep getting told that all of these illegals are vital to me keeping my lifestyle. I am so confused. :

[Texsox]

Your first sentence, again, isn't really accurate. Manufacturing jobs (and customer service jobs), in most industries, had been going down in relative wage for some time. By sending them overseas, if a person loses (or cannot get) a manufacturing job, they will get a different one eventually. Yes, I suppose some will end up flipping burgers (which, sadly, doesn't pay a lot less than many of those industrial jobs do). But many will also find other jobs with wages that are not decreasing like the manufacturing ones were. In the long run, wages go up due to the effect. IN short, you have fewer, higher paying jobs.

 

Now, they would go up MORE, and for more people, if we had a better education system, which is something I mentioned earlier.

 

They have been going down because companies have been willing to relocate here (Mexico) and the Pacific rim.

[southsider2k5]

We are losing higher paying jobs and replacing them with lower paying jobs. The demand for these jobs go up, the qualified and willing pool goes up. Wages remain low.

Manufacturing jobs paid very well. Tool and Die makers well over $50,000 per year. Industrial Maintenance equal to that. All the way down to line assembly work. Same formerly with customer service.

 

Show me one official statistic that shows a declining wage in the US. Even in the manufacturing sector this is not true.

[Texsox]

That's funny, because I keep getting told that all of these illegals are vital to me keeping my lifestyle. I am so confused. :

 

Well which is it? You seem to be offering two different scenarios, I'm confused.

[Texsox]

Show me one official statistic that shows a declining wage in the US. Even in the manufacturing sector this is not true.

 

When I was Executive Director of the South Texas Manufacturers Association I received numerous "state of industry" reports from the DoL. All pointed to a decline in "real wages". And it isn't only declining wages, or wages that are not keeping up with gains in other sectors, but we are losing those jobs. From textiles to food production. Autos to computers. We actually manufactured computers, from the component level up in this country. Find one now.

[Texsox]

That's funny, because I keep getting told that all of these illegals are vital to me keeping my lifestyle. I am so confused. :

To paraphrase you:

 

They are vital to what you've said before when raising the minimum wage came up. Owners need the profits, they deserve them for risking everything to start a business. They hire more people and everyone pays more taxes.

 

 

Sucks when people listen to you and remember.

 

"After consulting the leading economists of his day about where the economy was going and getting a constant stream of forecasts of 'On the one hand this and on the other hand that,' Harry Truman allegedly said, 'Hell, what I need is a one-armed economist.' "

[NorthSideSox72]

They have been going down because companies have been willing to relocate here (Mexico) and the Pacific rim.

Then those are no longer American wages. Look, here is a common scenario...

 

Company A makes techno widgets

Company A employs all the usual executives, managers, engineers, designers, administrative staff, and manufacturing staff

Company A can get labor cheaper in Mexico

Company A moves their techno widget factory to Mexico

Company A lays off most of their manufacturing staff, and maybe a couple administrative staff

Company A saves X amount of dollars

Company A retains the services of all the non-factory staff in the U.S. (instead of potentially losing them), and can even pay increases*

Company A also retains a greater profit, and plows some of the money into expansion, and more hiring on both sides of the border*

*Note here that the last 2 both result in more money and more jobs in the U.S. economy

The laid off factory staff in the U.S. split into multiple groups:

--those who find work in the same field that is still in the U.S. (would be wage-static or wage-decreased)

--those who find work in another field (most likely.. in the short, run, wage-decreasing in temp jobs... in the long run, wage-increased in new jobs)

 

Now, look at that result. Many of the factory workers will make less money at first, but get into other jobs, which are NOT as subject to the wage decreases of their previous employment. Others though will stay in field or go into another field and make less money. Those two groups, positive and negative in result, should be somewhere close to evening out. But, meanwhile, that Company A can now hire more, higher waged people in the U.S., and inject more money into the economy, AND decrease the cost of goods, all of which are positive effects on income. So you see, those layoffs suck, but in the long run they are better for the health of the economy than a lingering, propped up, wage-decreasing job base that makes American companies go out of business.

 

And as I've said before, you can make this transition better for everyone if this country had a better education system - both traditional and adult-level.

 

[southsider2k5]

Well which is it? You seem to be offering two different scenarios, I'm confused.

 

You tell me. I have offered the same arguement all along when it comes to growth. The reality on the ground is that people who want better benefits and higher wages are shooting themselves in the foot by allowing a 10% expansion of the labor pool. You don't have to agree with the position of an arguement to be able to understand the fundementals that go with an arguement.

 

Think about it. If you are a part of a group with a certian skill set, do you want more or less people around who also can do your job. Now what if part of that group was willing to work for way less than you could afford to do? What effect do you think that would have on wages? Now why do you think big business is in favor of letting the illegals stay? Its not a big leap to understand it.

[southsider2k5]

When I was Executive Director of the South Texas Manufacturers Association I received numerous "state of industry" reports from the DoL. All pointed to a decline in "real wages". And it isn't only declining wages, or wages that are not keeping up with gains in other sectors, but we are losing those jobs. From textiles to food production. Autos to computers. We actually manufactured computers, from the component level up in this country. Find one now.

 

So I take you don't have any statistics?

[RockRaines]

so......the cta huh?

[NorthSideSox72]

so......the cta huh?

Yeah, we kinda wandered off track a bit. Happens in here.

 

Latest CTA: They got temporary funding until November, from G-Rod.

 

[BigSqwert]

Yeah, we kinda wandered off track a bit. Happens in here.

 

Latest CTA: They got temporary funding until November, from G-Rod.

According to the Sun Times that deal hasn't been exactly finalized.