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

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

#321

Post by pests »

bagels wrote: post #279

People get really fixated on CEO pay. Its only of symbolic importance. Google says: 167,000 GM employees Mary Barra salary: $29M Distribute that salary across the whole workforce: $174 per employee They should really be talking about it in terms of inflation or profit margin. GM profit for 2022 was $21B

I always see people show this equation and it never made sense to me.

No one is saying the CEO is taking money the employees would have otherwise earned. When you divide it out like that of course its a pittance per employee.

The statement is about the relative scale of the CEO pay to one employee. I don't care about the difference applied to all employees.

An absurd parody I always imagine: John is 7ft tall. His group of 6 other other friends are only 6ft tall. Wow John is really tall! Nah, if you distribute his tallness between his friends they would only gain 2 inches! That has nothing to do with John being 12inches taller than any one of them.

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

#322

Post by MuffinFlavored »

l33t7332273 wrote: post #111
dmitrygr wrote: post #16

Earlier quoted context omitted.

> they're likely looking for anywhere between 20-30% over 4 years when it's all said and done. TFA conveniently points out to you that 20% has been offered to them and was rejected.

Good. As it should be. Record profits deserve record contracts.

which automaker had record profits, when? all of their stocks are underperforming the index poorly on a 5 year timeframe

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

#323

Post by d0liver »

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…

You are looking at it a different way, but the conclusion should be the same. You are saying there is more demand for specific CEOs because they are the ones who control the industry (this is actually why they "can't be replaced"); yes, of course, they value themselves highly. They already have control of all of the money that can be used for hiring and therefore determine what is desirable even when it is not valuable. This makes the situation that much worse because: 1. Supply and demand can be used to model it and 2. It doesn't do anything helpful to resolve the very real problems that exist.

Demand isn't the same thing as value. When we create an economy where a few people have all of the disposable income then we also create one where the only business interests represented are theirs. We should let value dictate demand, which only happens when we spread the money around.

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

#324

Post by TaylorAlexander »

listless wrote: post #222
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…

This is so obviously the right answer, I can’t believe its not upvoted more. To be clear, I stand with the union on the principal of their argument. However, the principals of economics itself, much like gravity, do not care about the nobility of your cause. It seems to me that what the union is asking for is that the corporation act more like a benevolent force than one that is restricted by market pressures. Of cou…

> It seems to me that what the union is asking for is that the corporation act more like a benevolent force than one that is restricted by market pressures.

I disagree. The union is simply changing the market pressures that the corporation experiences. There is no benevolence required when you are faced with a strike. You either negotiate acceptable terms, or you have to deal with the consequences.

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

#325

Post by HDThoreaun »

somebodythere wrote: post #271
borisjabes wrote: post #142

Earlier quoted context omitted.

Some public CEOs comp packages are defined by them exceeding $SPY so boards do expect more than just the economic cycle.

50% of SPY constituents are going to beat SPY. That in itself doesn't imply the CEO is a meaningful factor in company performance.

This isn’t true because of the weighting. If apple doubles in value SPY will be up 8% from that alone. It’s easy to see a scenario where one massive company has an incredible year and every other company returns below the average.

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

#326

Post by mr_toad »

highwaylights wrote: post #57
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…

To paint the above in starker terms: Worker pay is set by the leadership, leadership pay is set by the leadership.

The board, elected by the shareholders, sets the compensation of executives.

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

#327

Post by carlosjobim »

r3trohack3r wrote: post #47
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…

Not all jobs have quantitative measures for impact. The more a job is decoupled from a measurable value, the more likely that job is to be bid up to "as much as the company can afford." I've seen this in my career, the closer I get to "SRE" or "platform engineer" the more decoupled my salary has become from my actual measurable value. I'd articulate the thinking as, roughly: We know this role is important. We know th…

> We know this role is important. We know that having a bad SRE team (or CEO or platform team) is expensive, it could cost us the 100% of the business. And we don't know how to measure the value a good one provides. Therefore we are willing to spend as much as we can afford to make sure we get a good one.

And who are "we" in this train-of-thought? If it's shareholders, that's where the root of any problem lies. If shareholders are real businessmen and entrepreneurs who built up the company or similar companies, they will have a clue as to what is a good CEO. If the shareholders are real workers who believe in the company they're working for, they will have a clue as to what is a good CEO.

Today, shareholders are no longer real businessmen or real workers, but retirees represented by bureaucratic investors. That's why they have no clue as to what is a good CEO.

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

#328

Post by sib »

astrange wrote: post #190
WalterBright wrote: post #189

Earlier quoted context omitted.

> Supply and demand does not account for ... Yes, it does, in each scenario you presented. > We are free to change the perceived value of workers through the power of worker solidarity It's more like using the power of government to ensure the company has no alternative to the union. Company leaders have no actual power over the workers. They cannot force anyone to come to work. They cannot have you arrested. They ca…

> They cannot prevent you from accepting a job at another company. They can totally do that with a non-compete clause. Just not in California.

I'm pretty sure that there is no US state where a company can "prevent you from accepting a job at another company."

In some states, and in some circumstances, they may be able to prevent you from accepting a job at a competitive company.

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

#329

Post by mullingitover »

I'm surprised unions don't throw their weight around more via equity ownership in the company. Controlling the company directly is really the endgame move, once they control a majority stake, they're literally just negotiating with themselves for their labor contracts.

Even better, if they're managing their pensions via investment houses, why not just build their own investment house and leverage their negotiating position that way?

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

#330

Post by MuffinFlavored »

SeanAnderson wrote: post #31

I've heard a counter-argument to this before and I'm curious to get other's take on it. Basically, the story goes that when an individual rises into a significant leadership position at a large enough company that the economic calculations become different. There's still an element of domain expertise, but, for the most part, leadership is leadership wherever you go. This implies that a leader could (potentially) mov…

> leadership is leadership

what is leadership other than being stern, following up, driving projects to completion or up/down the org chart as needed (escalation, etc.)?

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