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CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

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Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#71

Post by jandrese »

loandbehold wrote: post #49

Maybe Karl Marx had a point? Sure, communist revolutions of the 20th century produced suboptimal results, but only because violent psychopaths were in power. We need democratic socialism. Maybe Bernie Sanders has right ideas.

Ultimately the more centralized the power the less efficient the system is. Markets are great because they push decision making down to the fringes, closer to where the ground truth is. With highly centralized systems there is a bottleneck both in getting information to the decision makers, but also in overwhelming those decision makers with too much detail and losing fidelity.

The flipside is that markets are only efficient at distributing things that can have a price on them. They're mostly blind to externalities (pollution!) and to problems that can't be solved by distributing the goods most efficiently.

This is why both pure command (Communist) and pure market (Capitalist) solutions fail. You need to decide which system is best for each problem and use the one that works. Consumer goods are absolutely best handled by markets. Healthcare is far more efficient in a command system, because the demand curve is a total mess so markets can't price it efficiently. Utilities are another example where markets are typically worse.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#72

Post by ls15 »

friedman23 wrote: post #30
adamedw wrote: post #15

Earlier quoted context omitted.

It could go to the people who produce the value in the first place: the workers.

At what point should someone's creation be confiscated and given to employees?

Most of the things that a company produces are created by the employees.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#73

Post by germinalphrase »

sanedigital wrote: post #56
germinalphrase wrote: post #42

Earlier quoted context omitted.

It’s eminently clear that identity politics is the name of the game across the political spectrum.

Sure, but if we're talking about co-opting the anger around wealth inequality, that particular fight ended with Occupy Wall Street becoming Black Lives Matter.

I actually disagree somewhat. A great of MAGA rhetoric was/is about elites abusing their positions at the expense of regular folk. Trump was viewed as an insider telling people the truth about how the sausage gets made.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#74

Post by conradfr »

sebastiansm wrote: post #59
loandbehold wrote: post #49

Maybe Karl Marx had a point? Sure, communist revolutions of the 20th century produced suboptimal results, but only because violent psychopaths were in power. We need democratic socialism. Maybe Bernie Sanders has right ideas.

Salvador Allende in Chile wasn't a violent psychopath, but also produced suboptimal results during his short period. Then came a real psycho, but that's another sad story.

Was it Salvador Allende or the CIA and the IMF?

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#76

Post by squaredot »

arcturus17 wrote: post #66

Like most people I think that this is ludicrous, but could someone give a shot at playing devil's advocate and justifying this? Are competent CEOs so much harder to get, do they really produce a 1,460% more value compared to '78, etc.?

The scale linking cost to quality of a good is not linear. People often pay twice as much for something that is only 10 percent better. Prices are a matter of allocation, not value.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#77

Post by jandrese »

sebastiansm wrote: post #59
loandbehold wrote: post #49

Maybe Karl Marx had a point? Sure, communist revolutions of the 20th century produced suboptimal results, but only because violent psychopaths were in power. We need democratic socialism. Maybe Bernie Sanders has right ideas.

Salvador Allende in Chile wasn't a violent psychopath, but also produced suboptimal results during his short period. Then came a real psycho, but that's another sad story.

One of the biggest weaknesses in highly centralized authoritarian regimes is that it creates enormous incentives for the largest assholes to lie, cheat, steal, and kill to get into power, because one they're in power they will be free of any consequences. This also means they have to be exceptionally regressive towards the population because they know the next huge asshole will be itching to do the same to them. With decentralized power you can have checks and balances to punish people like that.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#78

Post by wpasc »

I see a lot of revolution and socialism vs capitalism comments here, but isn't this a not surprising finding given corporate consolidation and increase in CEO:total worker ratio?

Sure, there's debate about pro's and con's of corporate consolidation and market failures surrounding monopolies and oligopolies. But, with the increase in connectivity between regions via telecom, internet, mobile, etc; wouldn't there be an expectation of increased economies of scale from more frictionless communication?

If we note increased economies from scale for companies, it would naturally follow a CEO's wage would rise given the weight CEO's decisions when compared to results of company and number of workers affected. The CEO of walmart vs the CEO of 5 general stores would obviously change.

All I'm noting is that perhaps this is downstream of consolidation and that's the pertinent discussion, not deciding on socialism/revolution.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#79

Post by jrm4 »

squaredot wrote: post #70

These remarks about the salary of the last percentile of the population only serve to raise controversy. If you want to see how people's well-being has evolved, you have to make somewhat more intelligent comparisons: for example by looking at what people can afford today compared to 50 years ago, or through quality of life indexes. The only thing that has changed for the worse seems to me to be the cost of real estat…

You seem to have missed that the thrust of the article could more be about overpaid CEO's than it is about underpaid workers.

Re: CEO pay skyrocketed 1,460% since 1978: CEOs paid 399 times as much vs. worker

#80

Post by robocat »

ajsnigrutin wrote: post #17
lm28469 wrote: post #12

Earlier quoted context omitted.

Damn, why did people create companies for the past 300 years ? Why did people become entrepreneur ? They didn't have anywhere close to 400 times their workers salary, must have been a miserable life What's the point of it all when you have enough money to sustain your entire genealogy tree from the birth of earth to the heat death of the universe ? These people are clinically ill

How many companies in the last 300 years were as large as amazon or walmart? A local hairdressing salon owner/director doesn't earn a lot more than the employees there. Maybe it's time to disincentivize huge companies in favour of many smaller ones.

> A local hairdressing salon owner/director doesn't earn a lot more

That is linear thinking, however income is very non-linear. In New Zealand minimum wage is ~$800 for 40 hours and you might have $100 disposable income after living expenses. Let’s say the owner gets $1200 at the end of the week. Their disposable income has increased by wayyy more than a 1:1 ratio. That is why you really care about a $0.50 pay rise if you are working near minimum wage, because it makes a huge difference to your marginal disposable income.

If you are “normal” minimum-wage then you compete for rental properties against all other normal people, so costs rise to soak up disposable income. A similar dynamic occurs for most people in middle/professional income levels - people compete against each other to pay as much as possible of their income on their mortgage and so they also don’t end up with as much disposable income as you might think. You probably know people in the 1% income bracket that are struggling to make ends meet due to that reason (they are way better off, and have far more disposable income and savings, but not as much as one might naively assume).

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