Financial News

[StrangeSox]

For clarification...

 

I think CEO/executive pay is completely out of whack with reality.

 

I think corporate profits are insane despite the recession (as a matter of fact they've never been higher), etc.

 

I'm not arguing that about the graph in every regard...

 

I'm simply saying that it should be, to some degree, expected that wages slowed while productivity skyrocketed due to automation and advancements in technology that assist us with our work. What I'm not saying is that CEO's deserve to be paid 99% of the companies profits and the rest of the employees 1%.

 

Why should we expect or accept wage increases to be divorced from productivity increases? If my work is generating more revenue, why should someone else get to keep the difference?

 

I realize that we're probably coming to this from different first principles, but I hope you can see my POV.

[Y2HH]

Why should we expect or accept wage increases to be divorced from productivity increases? If my work is generating more revenue, why should someone else get to keep the difference?

 

I realize that we're probably coming to this from different first principles, but I hope you can see my POV.

 

Are you going to share your wage with the computer that's now doing 90% of your job for you?

 

I see your point...but my point is I EXPECTED my wage to grow at a much slower clip than my productivity BECAUSE I'm not the one being more productive, the technology I use is. What makes me marketable is a skill set that's not easily replicated. This is what I mean by studying something useful in college, or even in high school/trade school. This is more important than your productivity...because without a specialized skill set, anyone can be productive now. Productivity isn't the measuring stick for pay anymore...and people haven't yet accepted that.

 

There are a lot of dime a dozen jobs out there...and a computer will make anyone in that job almost as productive as the next guy/gal on the list...thus production being used as a measuring stick no longer applies.

[StrangeSox]

Somebody still captures those productivity gains, though, and it ain't "the computer." It's another human who's doing no more work than they were doing before.

 

And, really, computers are just another tool. Productivity gains in the past from tool improvements led to increased wages; why do computers get a special position from all other tools?

[Y2HH]

Somebody still captures those productivity gains, though, and it ain't "the computer." It's another human who's doing no more work than they were doing before.

 

And, really, computers are just another tool. Productivity gains in the past from tool improvements led to increased wages; why do computers get a special position from all other tools?

 

While I agree with you that someone gets those gains, it's not us. While we all wish the corporations would increase our pay by 100% every year since they're making so much money due to increased productivity (assisted by computers or not), I've also accepted reality and that's not going to happen.

[StrangeSox]

While I agree with you that someone gets those gains, it's not us. While we all wish the corporations would increase our pay by 100% every year since they're making so much money due to increased productivity (assisted by computers or not), I've also accepted reality and that's not going to happen.

 

You can take a cynical view of the realities of the situation while still recognizing core problems with it, though. I guess I really don't understand your objection here beyond "life isn't fair," which doesn't really address anything.

[Balta1701]

While I agree with you that someone gets those gains, it's not us. While we all wish the corporations would increase our pay by 100% every year since they're making so much money due to increased productivity (assisted by computers or not), I've also accepted reality and that's not going to happen.

But in a competitive system...a free market system, the one thing that shouldn't happen is that the owners slice of the pie always grows.

 

If the slice of the pie for ownership grows in one area, then I ought to be able to undercut that business in price by starting my own company. Or, I ought to be able to attract that company's better employees by offering better wages/benefits, weakening that company in the process.

[StrangeSox]

ie there is no warfare but class warfare, smash capital, viva la revolucion!

 

more seriously I don't know how you can look at data showing real wages being stagnant for decades and the explosion of household debt that correlates damn near perfectly and not see the connection. Advocating for universal thrift isn't the answer, either, because we see what happens when households stop spending in a consumption-based economy.

Edited September 9, 2011 by StrangeSox

[Y2HH]

ie there is no warfare but class warfare, smash capital, viva la revolucion!

 

more seriously I don't know how you can look at data showing real wages being stagnant for decades and the explosion of household debt that correlates damn near perfectly and not see the connection. Advocating for universal thrift isn't the answer, either, because we see what happens when households stop spending in a consumption-based economy.

 

I guess I can't see it because my wage has gone up slowly and steadily since I entered the work force in the late 90's.

 

I don't really base my life by comparing it to what other people have or don't have...all I can do is watch out for me/my family...reading some chart about someone elses economic woes doesn't do anything for me.

 

Sure, I wish we were all rich and money didn't need to exist...but what does this accomplish aside from nothing?

 

I guess it's hard to see the forest for the trees in my situation, since my wage never stagnated.

Edited September 9, 2011 by Y2HH

[StrangeSox]

Well you've got to adjust for inflation etc. etc. but you're right for recognizing that personal or individual comparisons aren't what matters here. It's not a chart about someone's economic "woes" but the state of our economy, our income/wealth inequalities as a whole and the sustainability of the status quo. It's not about comparing my life or my possessions to others or 'keeping up with the Jonses' type jealousy bulls***. Personally, my wife and I aren't doing too bad for a couple of people in our late 20's and both of our incomes have gone up decently since entering the workforce in 2007.

 

But that's not really the point. At least for me, its a much more philosophical question at play here than "he's got cooler stuff than me!"

[southsider2k5]

Why should we expect or accept wage increases to be divorced from productivity increases? If my work is generating more revenue, why should someone else get to keep the difference?

 

I realize that we're probably coming to this from different first principles, but I hope you can see my POV.

 

That's just it... Why should they be? Who is taking the risk here? Employees are showing up, doing their work, and getting their paychecks. Why would they be entitled to a higher and higher share of the rewards when they aren't putting up any of the risk? I don't the sense of entitlement there.

[StrangeSox]

What additional risk are employers assuming that's led to record profits and record productivity that's fundamentally different from every technological advance before 1980?

 

eta the point is that they've been entitled to an ever-decreasing share of the rewards. That's what stagnant real wages in an expanding economy means.

 

eta the common employee is arguably at more risk than the wealthy business owner* anyway, at least in an economy with less-than-full employment. If the company goes bust, well, they've likely still got millions/billions in the bank and its on to the next venture! For the typical office worker? It's the unemployment lines, dipping into the 401(k) to make the mortgage payments, etc. They're not risking an investment in hopes of an ROI, but the overall effects on their actual lives would likely be much worse.

 

*obviously an illustrative example and not applicable to all businesses, mostly just the large ones who employee a majority of the country.

Edited September 9, 2011 by StrangeSox

[Y2HH]

What additional risk are employers assuming that's led to record profits and record productivity that's fundamentally different from every technological advance before 1980?

 

What additional risk?

 

Legal battles, patent battles (we can talk about the need of patent reform but whats the point), the fact is that right now these largely profitable companies are assaulted by lawsuits all over the place. And a multitude of other fees and risks they take, such as employee safety, etc...

[Y2HH]

*obviously an illustrative example and not applicable to all businesses, mostly just the large ones who employee a majority of the country.

 

I thought small businesses were the bulk of employment?

[StrangeSox]

What additional risk?

 

Legal battles, patent battles (we can talk about the need of patent reform but whats the point), the fact is that right now these largely profitable companies are assaulted by lawsuits all over the place. And a multitude of other fees and risks they take, such as employee safety, etc...

 

But those aren't risks brought on by increased productivity. What's more risky about buying a PC that entitles upper management/ownership to all productivity gains that doesn't apply to buying a typewriter 50 years ago?

 

[Y2HH]

But those aren't risks brought on by increased productivity. What's more risky about buying a PC that entitles upper management/ownership to all productivity gains that doesn't apply to buying a typewriter 50 years ago?

 

I already said I think executive and ceo wages are out of control...but in the end, what can you do about it?

 

Nothing.

 

Thus far this discussion has accomplished nothing but highlight that rich people are rich, and they're not sharing with you.

 

I never expected them to share with me...I guess that's the difference in how I see things.

[StrangeSox]

I thought small businesses were the bulk of employment?

 

No, and the US is actually relatively low in that regard. Firms with 500+ employees account for 50%, and firms with at least 100 count for 64%.

 

eta the problem comes in defining what a "small business" is since it's a vague term. As we saw somewhat recently, Republicans were defining "small business" as all s-corps, which was nonsense since it encapsulated multi-billion dollar firms.

Edited September 9, 2011 by StrangeSox

[southsider2k5]

What additional risk are employers assuming that's led to record profits and record productivity that's fundamentally different from every technological advance before 1980?

 

eta the point is that they've been entitled to an ever-decreasing share of the rewards. That's what stagnant real wages in an expanding economy means.

 

eta the common employee is arguably at more risk than the wealthy business owner* anyway, at least in an economy with less-than-full employment. If the company goes bust, well, they've likely still got millions/billions in the bank and its on to the next venture! For the typical office worker? It's the unemployment lines, dipping into the 401(k) to make the mortgage payments, etc. They're not risking an investment in hopes of an ROI, but the overall effects on their actual lives would likely be much worse.

 

*obviously an illustrative example and not applicable to all businesses, mostly just the large ones who employee a majority of the country.

 

Who bought the new technology?

[Y2HH]

No, and the US is actually relatively low in that regard. Firms with 500+ employees account for 50%, and firms with at least 100 count for 64%.

 

eta the problem comes in defining what a "small business" is since it's a vague term. As we saw somewhat recently, Republicans were defining "small business" as all s-corps, which was nonsense since it encapsulated multi-billion dollar firms.

 

I'm not sure how to read that confusing website -- but it looks to me like small employers employ more people than large ones.

 

Edit: Never mind I see it now.

 

But still...so? I guess my question is this, why are you surprised that businesses want to keep their profits?

 

I went into the work force expecting that...it's business...it's not nice, it's not pretty...it's business.

Edited September 9, 2011 by Y2HH

[StrangeSox]

I already said I think executive and ceo wages are out of control...but in the end, what can you do about it?

 

Nothing.

 

Thus far this discussion has accomplished nothing but highlight that rich people are rich, and they're not sharing with you.

 

I never expected them to share with me...I guess that's the difference in how I see things.

 

If you find discussion of ideas and concepts to be pointless then...stop posting?

 

eta there's a difference between diagnosis and prescription, and you can have a discussion of the former without the later!

Edited September 9, 2011 by StrangeSox

[StrangeSox]

I'm not sure how to read that confusing website -- but it looks to me like small employers employ more people than large ones.

 

"all firms" have ~121M paid employees. Firms with 500+ employees have a total of ~61M employees, or roughly half. Firms with 100-499 employees have ~17M.

[Y2HH]

If you find discussion of ideas and concepts to be pointless then...stop posting?

 

I have to bring sanity to your insane utopian thought process...which is why I post.

 

If there is no risk, as you say, then start a f***ing business, grow it into a corporation and then you can pay yourself all the profits...oh no, wait...better yet, you can SHARE all of your profits equally with your employees.

 

What I see here is b****ing and tantrum throwing...and if you were in their position, you'd be no different.

[StrangeSox]

Utopia? Throwing a tantrum? Saying there's no risk? huh?

 

I thought we might be able to have a discussion on why wages have become separated from productivity, the fairness or justification for it, what implications expanding inequality might have etc. You've decided that I have some "insane utopian thought process" because I raise the question of "why are things different from the 60's and 70's?"

[Y2HH]

Utopia? Throwing a tantrum? Saying there's no risk? huh?

 

I thought we might be able to have a discussion on why wages have become separated from productivity, the fairness or justification for it, what implications expanding inequality might have etc. You've decided that I have some "insane utopian thought process" because I raise the question of "why are things different from the 60's and 70's?"

 

I've pretty much made it clear that I don't believe it's fair, but a lot of things aren't fair...I just don't get why you (or others) have expectations or per-conceived notions that your productivity should match profits. Productivity is through the roof in large part to computers and automation that the corporations own, that you use, which make your modern day productivity possible. This also means you are easily replaceable by someone that will be almost as productive (or slightly moreso) in many areas of work.

 

If you believe you are being treated unfairly where you work, then quit...find a job and/or go into politics and change things. I'm not sure what you want to discuss here...other than what amounts to a utopian business environment where businesses share their profits on a nearly equal scale with every employee.

 

Yes, corporate profits are through the roof and for many people wages have stagnated in comparison to productivity. And so has the effort people put into their jobs. It's of my opinion that it's no longer valid to relate job productivity to wages.

[StrangeSox]

I've pretty much made it clear that I don't believe it's fair, but a lot of things aren't fair...I just don't get why you (or others) have expectations or per-conceived notions that your productivity should match profits. Productivity is through the roof in large part to computers and automation that the corporations own, that you use, which make your modern day productivity possible.

 

But this is no different from every other workplace technological advance of the previous eight or nine decades, which makes no sense.

 

This also means you are easily replaceable by someone that will be almost as productive (or slightly moreso) in many areas of work.

 

That doesn't recognize the existence of skilled labor or, again, differentiate from previous technological advances. Why didn't the same apply to a typewriter? Surely secretaries and clerks could process and publish much faster with these new machines which require minimal training than before, much in the same manner that computers allowed productivity gains for typists.

 

If you believe you are being treated unfairly where you work, then quit...find a job and/or go into politics and change things. I'm not sure what you want to discuss here...

 

Well, if internet forums pontificating is so damn meaningless (and it pretty much is!), then, well, stop posting? I mean what is it that you want here?

 

eta: you keep viewing these things from a personal angle. This isn't about me, personally, being treated fairly or unfairly. I think I'm reasonably well-compensated for my work. But the idea of "just up and quit" isn't a real objection in an economy with 9% unemployment and when we're talking about a decades-long trend across the entire economy. Some might say that such a concept of a labor market is...a utopia!

 

other than what amounts to a utopian business environment where businesses share their profits on a nearly equal scale with every employee.

 

Ideally, yeah, that'd be great. And employee-owned businesses that are highly successful and have generous profit-sharing plans do exist, so it isn't some sort of dumb, unachievable utopia.

 

But more to the point, I haven't actually advocated for sharing profits on a nearly equal level here. I've questioned why productivity gains and wage gains have split since the 80's. The answers I've gotten back are "because technology made jobs easier," but that's nonsense because that's always been true for productivity gains.

 

Yes, corporate profits are through the roof and for many people wages have stagnated in comparison to productivity.

 

Great! I'd like to talk about why that is, if its fair or desirable and, if not, what might be done to change that.

 

And so has the effort people put into their jobs.

 

This would only make sense if work hours had decreased while overall productivity remained the same. The efforts for any individual task may be less, but now you simply perform more tasks or, stated another way, are more productive.

Edited September 9, 2011 by StrangeSox

[StrangeSox]

Who bought the new technology?

the same people that bought the new technology in the previous decades when productivity gains by labor resulted in increased wages for labor and increased profits for owners. What fundamentally changed in the late 70's or early 80's that changed this dynamic to owners keeping all of the productivity gains?