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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

#461

Post by digdugdirk »

gretch wrote: post #55
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…

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…

That's assuming that the CEO has anything to do with the growth in profits. Average US GDP looks to have grown by ~66% in the past decade. Do some spreadsheet shenanigans and it wouldn't take much to drastically outperform that number.

Who's to say that the various attempts to "chart a new course" and change business strategy for the shareholder's benefit during that time didn't actually make these corporations underperform vs locking the executives in the boardroom and cutting off all their decision making ability for the same time period?

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

#462

Post by throw0101b »

elcritch wrote: post #458
throw0101b wrote: post #437

Earlier quoted context omitted.

> Though this argument falls apart with evidence that CEOs of big firms do need to deeply understand their companies domain. Counter-example: the last few CEOs of Boeing who have completely messed up the company. They came from the Jack Welch of GE school of management, and it turns out that Welch et al were cooking the books. See also Enron and WorldCom.

How is that a counter example? Seems like another example of “professional managers” coming in and screwing up a company. The first Boeing CEOs were from Boeing and were steeped in Boeings engineering culture and valued that expertise. Later CEOs like you mentioned didn’t. Boeing also acquired McDonnell Douglas, and many thought it was great that Boeing got to keep all McDD’s “experienced” managers.

> How is that a counter example? Seems like another example of “professional managers” coming in and screwing up a company.

The screwing up started at the top by changing metrics and priorities post-McDD. See Flying Blind:

* https://www.penguinrandomhouse.com/books/646497/flying-blind...

And the screwing up was richly rewarded.

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

#463

Post by astrange »

sib wrote: post #360
TaylorAlexander wrote: post #347

Earlier quoted context omitted.

Clearly a competitive company counts as "another company".

Yes - but not every other company - so they have not prevented you from working at another company...

Most people with skills are only really capable of working at competing companies.

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

#464

Post by tbrownaw »

ftxbro wrote: post #264
Exoristos wrote: post #258

Earlier quoted context omitted.

The word you're looking for is "uppity." "Arrogant" is the CEO assuming he's worth hundreds of times more than a different man.

at least in usa the word uppity has some other connotations. also i was quoting that guy as saying arrogant so i guess he was the one looking for the other word not me

Yes, those other connotations would be what the other poster is accusing you of secretly thinking.

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

#465

Post by astrange »

ipaddr wrote: post #359
WalterBright wrote: post #227

Earlier quoted context omitted.

> but in general the CEO doesn’t really do much to the stock price Steve Jobs, Bill Gates, Elon Musk, Satya Nadella, etc. > ceo pay is based on the economic cycle rather than how the company does You can always start your own corporation, name yourself CEO (all you gotta do is file some paperwork and pay an annual fee) and rake in the dough for doing nothing!!

Those are founders but this is an external hire at a later stage not really the same.

The story I linked is actually a cofounder.

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

#466

Post by jmye »

MuffinFlavored wrote: post #330
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.)?

I mean, it involves leading. Making strategic decisions and then gaining support for them. Leadership is not just a synonym for project management.

I don’t understand your comment at all.

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

#467

Post by ElevenLathe »

JKCalhoun wrote: post #13

> “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. I thought I read that at Japanese companies the CEO doesn't make 300 times what the workers make. Maybe the CEO made 10 times at most?

I'm not sure why it's obvious that the CEO should be the highest paid? Why should everybody's boss make more than them? I know that isn't the case for many line managers of highly-paid programmers, for example, and I assume the same is true of other similar professions, at least sometimes.

Wages are theoretically a market, and probably it's often easier to replace a skilled manager/business bro than it is a skilled engineer/artist/salesman, and often it's more important to your business.

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

#468

Post by jmye »

grecy wrote: post #448
burnerburnson wrote: post #389

Earlier quoted context omitted.

That's not an interesting thought experiment at all. The workers in aggregate are clearly more valuable than the CEO alone. That's why their cumulative salary is way higher than the CEO's.

But why did the CEO's salary increase more than the workers? To keep the equation in check, surely they need to increase at the same rate

Why? No individual assembly line worker has any particular value - so if the aggregate increases then the equation, in your example, is “in check”, whatever that means.

Alternatively, if assembly workers were difficult to effectively replace, they would get paid more. Simply doing some unit of work neither makes that unit of work valuable, nor does it make the person doing it valuable.

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

#469

Post by whatshisface »

enragedcacti wrote: post #318
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…

> There is no indication anywhere that supply and demand is wrong about the job market. If supply and demand worked as theorized in the labor market then there would necessarily be a loss of employment when the minimum wage is raised, but that is not always the case [1]. Some studies find effects and some don't, which is a good indication that the labor market is more complicated than Econ 101 principles. [1] https:/…

I think that's called an "inflexible demand curve," and is part of the complete theory. I do remember drawing flat lines in econ 101. :)

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

#470

Post by mullingitover »

mr_toad wrote: post #451
mullingitover wrote: post #329

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 po…

If they could afford that they wouldn’t need jobs. They’d need to hire a bunch of new workers. It would be interesting to see what happened when the shoe was on the other foot.

I'm surprised, I did a little digging and there are actually quite a few companies that are at least 50% employee owned[1]. The biggest company in the list is Publix Supermarkets, but there are also quite a few manufacturing and engineering firms.

[1] https://www.nceo.org/articles/employee-ownership-100

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