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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

#371

Post by mulmen »

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…

Ford jumpstarted the middle class by increasing compensation to a level that created more customers. This is consistent with the idea that value is created.

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

#372

Post by edgyquant »

sib wrote: post #328
astrange wrote: post #190

Earlier quoted context omitted.

> 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.

Which means they can prevent you from utilizing the skills you have, forcing you to start from the bottom. How is this not an extremely lopsided power akin to preventing you from working? In general people will keep quiet to keep making the same money to support their family, etc

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

#373

Post by [deleted] »

MuffinFlavored wrote: post #322
l33t7332273 wrote: post #111

Earlier quoted context omitted.

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

[deleted]

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

#374

Post by ajsnigrutin »

no_wizard wrote: post #294
ajsnigrutin wrote: post #269

Earlier quoted context omitted.

Doing math like this is always bad and just leads to arguments. Imagine a chocolate bar factory, making chocolate bars for 50 cents and selling them for $1... 1mio per month, 500k profits per month. Then a new ceo comes, sees that all the ingredients are vegan, there are nuts inside, making the bars "healthy", slaps on vegan logos, superfood logos, changes the ads to make the chocolate bar seem more high end and rais…

this is a superficial argument that leads to the point that you want it to, rather than determination of the factors such as: Was there an entire marketing department that was needed for this to be successful? Why aren't we quantifying that? Why aren't we quantifying the new QA processes to make sure the packaging is correct? Why aren't we factoring in workers downstream contributing to the success by being able to p…

You cannot calculate stuff like this... you just can't.

If they earn so much more, should they pay contractors more too? Does your plumber ask how much do you earn before he fixes your toilet?

What about other supplies? Should they pay more for cocoa? For sugar? Do you pay more for bread in your local store than someone who earns minimal wage?

You do none of that... you try to get the lowest price when you're paying (even if the plumber has 8 kids to feed at home) and get as much as possible when you're the one getting paid. Same with workers.. you pay enough to have them stay and they do as little as work as possible to stay employed.

I agree that some workers should be paid more, and that's why they're striking and hopefully they'll succeed... but taking out a calculator and saying that someone made X more so someone else should get paid more too by the same ratio is stupid. In my country, there's a huge shortage of contractors (electricians, plumbers, painters, tile-layers etc.) and the good ones earn as much as doctors... and due to a shortage, large companies have problems getting eg. electricians (because contracting pays more and gives more freedom), so their pay is going up... does that mean that accountants pay should go up too? (there's no shortage of accountants)

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

#375

Post by Jensson »

amarshall wrote: post #94
gretch wrote: post #55

Earlier quoted context omitted.

I support the workers' decision and negotiating on labor rates is the basis of our economic system. Get what you deserve. That said, the CEO pay is easily explainable: > Profits at the struck auto companies increased 92% from 2013 to 2022, totaling $250 billion, according to EPI > CEO pay at the Big Three has grown 40% in the last decade, according to EPI If you're the CEO of a company and you increased profits by 92…

> If you're the CEO of a company and you increased profits by 92% This assumes that the increase in profit is attributable primarily to the CEO. Well, that at least 43% (40/92) of it is. > Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that. This only really works with unions. Fortunately, these workers have one.

> This assumes that the increase in profit is attributable primarily to the CEO. Well, that at least 43% (40/92) of it is.

The CEO's didn't get 100 billion extra pay, they just got 40% more than before not 40% of all the profits.

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

#376

Post by grecy »

meindnoch wrote: post #79

"Obviously, CEOs should be the highest-paid person in an enterprise" Hold on there chap! How is this obvious?

For a fun thought experiment:

If the CEO go on strike and don't come to work for a month, how many cars will not be built, and how money will the company lose?

If the union factory workers go on strike and don't come to work for a month, how many cars will not be built, and how much money will the company lose?

Therefore, who is actually more important to the earnings and success of the company?

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

#377

Post by akoboldfrying »

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…

From a purely laissez-faire perspective, so long as the union does not call for government interference -- and there is no indication in the article that they have done so -- their strike action (or threat of such) is merely a way to influence the supply side in the question of supply and demand.

Do you feel this to be illegitimate? If so, why?

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

#378

Post by vkou »

HDThoreaun wrote: post #325
somebodythere wrote: post #271

Earlier quoted context omitted.

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.

Or, alternatively, one massive company has a bad year, and everyone else comes out smelling like roses.

On average, 50/50 is a pretty decent benchmark here.

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

#379

Post by burnerburnson »

meindnoch wrote: post #79

"Obviously, CEOs should be the highest-paid person in an enterprise" Hold on there chap! How is this obvious?

It's obviously wrong. NBA teams are a good counter-example. Nobody talks about the team's president/CEO/etc when prognosticating which team will be the best.

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

#380

Post by nemo44x »

ken47 wrote: post #252
nemo44x wrote: post #145

Why does LeBron James make so much more than the ball boy and concession stand workers and ushers? A CEO that delivers alpha deserves a big cut of that. The board exists to hire leaders that can deliver alpha. A good deal fail to. But the ones that do are more than worth their compensation. And btw you have 0 chance of attracting the kind of CEO that can deliver alpha by offering peanuts. It doesn’t always work out a…

My understanding is that the CEO's in question are not even remotely comparable to Lebron James's stature in basketball.

Then your understanding is misinformed I’m sorry to report. CEOs are generally top level business people and most business people can’t play at their level. There are exceptions but the system cycles poor performers out much like the NBA does to high draft picks that have lower than replacement value.

Businesses compete against each other and the CEO orchestrates the strategy and is accountable for the the execution across a broad spectrum of functions. There is a power law distribution where the very best CEOs are vastly superior to the good who are to the replacement level ones. So like in the NBA you may overpay for a guy in the hopes they are great or you pay handsomely for a good player that is above replacement level or you pay the highest for the best to run your company. Sometimes it pays off and sometimes not.

But the value that great CEOs produce is astronomical. Well more than a basketball player could ever hope to produce.

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