Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew • Hacker News Board

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#241

Post by jacobr1 » Tue, Sep 19, 2023, 12:05 AM UTC

whatshisface wrote: post #196

TaylorAlexander wrote: post #124

Earlier quoted context omitted.

> As many argue, wages are only set by supply and demand. Most of the time that I see people invoke "Econ 101" concepts, they are wrong. Supply and demand does not account for the power imbalance between workers and leadership, which unions specifically attempt to address. It does not account for the class differences between workers trying to make ends meet and the board of directors who believe they deserve much hi…

My econ 101 talked about the difference between commodity and illiquid markets which explains the difference between worker and CEO pay. The CEOs are coming from a restricted group of insiders and can't be replaced because of their relationships which make them unique. Workers in the sectors most often unionized have few distinguishing characteristics from the perspective of the company and are thrown around by the s…

Or for this audience, the tech industry, where in-demand skills are often bid up in the form of higher salaries.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#242

Post by massysett » Tue, Sep 19, 2023, 12:05 AM UTC

MuffinFlavored wrote: post #148

The only person losing out is going to be the consumer. What's to stop executives at Ford, GM and Stellantis from saying "sure, 40% pay increases, no problem" and then just passing it along to consumers one way or another? There isn't enough margin in the R&D + logistics of producing cars as is. Ford's stock is up 25% in 5 years, vastly underperforming the index GM stock is -5.6% over 5 years Stellantis stock is +3.5…

“and then just passing it along to consumers one way or another?”

The consumer will buy a car from a non-union automaker that charges less.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#243

Post by Alupis » Tue, Sep 19, 2023, 12:05 AM UTC

Aeolun wrote: post #187

Alupis wrote: post #140

Earlier quoted context omitted.

Flipped on it's head - 2 thoughts: 1) You cite cost of replacement - yet these companies are unable to replace their C-Suite with anyone costing less. Therefore, they can command the compensation levels they do (not to mention compensation != in pocket pay). 2) UAW employees are indeed readily replicable with little or no training on average. Offshoring is very realistic, and there is no shortage of high-school educa…

> these companies are unable to replace their C-Suite with anyone costing less They can replace their C-suite with me. The fact they don’t want to because I’m not some rich, well-connected, historical CEO does not mean they don’t have the option. I’d do the job for just the basic pay package.

Have you considered that you are perhaps not a very good big-org leader, and perhaps that is why they have not hired you?

Simply stating they can hire you and they don't because you're not already well-connected clearly demonstrates you haven't an idea what these people actually do.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#244

Post by hellojesus » Tue, Sep 19, 2023, 12:05 AM UTC

anigbrowl wrote: post #216

MuffinFlavored wrote: post #158

Earlier quoted context omitted.

Stellantis has 270,000+ employees across 16 brands. I'm not saying their CEO does or doesn't deserve $20m in compensation but at some point you're going to run into a problem where... nobody wants to do that job for $1m/yr and they wouldn't be qualified or very good at it.

Maybe if a company gets so big that finding people to manage it becomes disproportionately expensive, it's time to break it up.

As long as we do the same to the gov.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#245

Post by jjoonathan » Tue, Sep 19, 2023, 12:06 AM UTC

Jaygles wrote: post #160

smfjaw wrote: post #96

Earlier quoted context omitted.

[flagged]

The people who decide where money gets allocated are allocating most of it to themselves? If this was done in a government it would be called extreme corruption.

But but competition keeps them in check!!!

(Competition between the two players in the market that have a revolving door of executives, a carefully crafted moat a mile wide, and raise prices together in lock-step but definitely do not collude, no sir!)

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#246

Post by refurb » Tue, Sep 19, 2023, 12:06 AM UTC

The average CEO at a top U.S. company was paid $27.8 million in 2021, including stock awards — 399 times as much as the typical worker — according to research published by EPI. From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker.

Auto workers aside, this is always a crappy stat that is thrown about.

"Top US companies" is rife with survivorship bias. It's like saying "the CEOs of the most successful companies had their pay increase..." Well yeah, when a company is successful, compensation rises.

Average CEO pay across all companies in the US is like $250,000.

Honestly, if the union wants similar compensation as the CEO, they should have the same pay structure as the CEO - 10% in cash salary and 90% in options or stock. When the car company does really well, they make a ton of money, when it does poorly, they make almost nothing.

But I would guess they wouldn't go for that.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#247

Post by turnsout » Tue, Sep 19, 2023, 12:06 AM UTC

throw0101b wrote: post #41

kortilla wrote: post #12

Earlier quoted context omitted.

There is no academic training to be a good CEO. They are not easily replaceable. If they were, board members wouldn’t bother offering such high pay. Shareholders don’t appreciate wasting money.

> There is no training to be a good CEO. They are not easily replaceable. If Steve Jobs—who first created and then basically rescued Apple and started it on the path to where it is today—can be 'replaced' then any other leader can be replaced. Similarly there are plenty of CEOs that are paid oodles of money that were or are absolute garbage: see Boeing for the last 15+ years as Exhibit A.

Steve was replaced with one of the greatest minds in Operations that history has ever known, and much of Apple's success under Steve was thanks to Tim. So Apple is not the best example if you're trying to show "CEOs don't matter."

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#248

Post by whatshisface » Tue, Sep 19, 2023, 12:06 AM UTC

noizejoy wrote: post #240

whatshisface wrote: post #196

Earlier quoted context omitted.

My econ 101 talked about the difference between commodity and illiquid markets which explains the difference between worker and CEO pay. The CEOs are coming from a restricted group of insiders and can't be replaced because of their relationships which make them unique. Workers in the sectors most often unionized have few distinguishing characteristics from the perspective of the company and are thrown around by the s…

> The CEOs are coming from a restricted group of insiders and can't be replaced because of their relationships which make them unique. Wouldn’t that be simply favouritism/cronyism rather than a free market?

Favoritism, cronyism or more like it would actually be described by the people who do it, a preference for trusted associates you've worked with in the past over strangers to run your stuff for you isn't a violation of your "market freedom" but rather an expression of a set of preferences that make all your choices incommensurable. P.S. it is not in the interest of investors for one employee to make way more money than normal it's just that nobody knows how to avoid it when that employee is the center of decision-making. The kids of yesterday's owner-operators have an entirely different set of preferences from their parents due to being real, "classical" capitalists... Which makes the focus on CEOs kind of ironic! Technically they're workers who escaped the cruelty of a liquid market.

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#249

Post by jcranmer » Tue, Sep 19, 2023, 12:07 AM UTC

econperplexed wrote: post #8

> From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Why has the supply of CEOs not kept up with the demand for them? Surely, with the improvement in education and in increase in MBA programs, there must be far more CEOs today than in 1978. Why has the ratio of CEOs to Companies fallen by 14x for their wages to rise this much? /s As many argue, wages are only…

CEOs are an illiquid market, and demand for CEOs is pretty inelastic (companies need but one CEO after all). It's not a market which can reach price equilibrium.

If you expand your horizon somewhat to C-suite in general, it seems that demand for C-suite has tended to increase over time. If you also consider that C-suite is to some degree a Veblen good (demand increases as price goes up) [1], that makes sense under economic laws. Worker pay, unlike executive pay, is going to be considered a significant cost center, and business will higher fewer workers if individual pay is growing too quickly, making worker pay act like regular goods and not Veblen goods.

[1] The framework for setting CEO salaries tends to be "take the median CEO pay, add a little extra because our CEO's clearly better than average..."

Re: Striking auto workers want a 40% pay increase–the same rate their CEOs’ pay grew

#250

Post by lostlogin » Tue, Sep 19, 2023, 12:07 AM UTC

> “Obviously, CEOs should be the highest-paid person in an enterprise, but then the question is exactly just how much higher than everyone else,” Josh Bivens, chief economist at EPI, told NPR.

Are there any examples where this isn’t true?

I know someone who works as an engineer cleaning up nuclear waste. The workers who do the job he engineers are paid more than him. He is ok with that but did pass the comment that it’s an unusual situation.