Re: Twinkie for your thoughts
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Originally Posted by
maddafinga
So you think that the current ceo pay of 231 tines the average employee's salary reflects the economic value he provides?
I think it depends on the situation, but in many cases it does.
For instance: If you have a company (or are on a corporate board) and can bring in someone who will make the company more profitable by several hundred million dollars, would it be worth paying them fifty million?
The amount the employees earn is irrelevant.
That said, if a company is not performing well, executives should certainly not be getting pay increases or bonuses.
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So in the 50s, did the 60 some odd times the average worker salary then NOT reflect that value at the time?
The size of a large corporation has drastically increased since then, much more than the rate of inflation.
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Do the workers salaries, which have stagnated in that time while the ceo pay skyrocketed disproportionately, reflect that the actual workers in the last 40 years are providing less and less economic value?
No. Wages have increased faster than the rate of inflation.
Also, employee salaries should be evaluated separately from executive salaries.
Re: Twinkie for your thoughts
Executives are employees too. All the salaries should be evaluated in terms of the company as a whole, in my opinion.
Salaries have not increased for the average person though actually. They've stagnated, while the buying power of that salary has decreased.
Re: Twinkie for your thoughts
You know what is cool?
Straight razors.
And everything that goes with them.
Re: Twinkie for your thoughts
It depends on where the inputs for the finished product are made...
For the company I work for, one of the cheapest inputs is labor, no matter what country that labor is from.
We have one shop in the US and one on Mexico - the largest determining factor for what gets made where has much less to do with labor costs than it does with where products are being shipped.
Edit to elaborate:
We make parts for tractors and industrial machinery. The company that makes the machinery has assembly plants all over the world.
Working backwards through the chain: an area of the world has a large demand for brand X tractors; brand X builds an assembly plant in that area rather than shipping finished products there; suppliers like us put shops near the assembly plants; our suppliers set up operations near us; and so on...
If all of this sounds bad for American workers, it's not - there are still plenty of plants here, and these products are selling on a global market, bringing a lot of money back here.
There's also the economic concept of comparative advantage, whereby we benefit as an entire economy from focusing on the things that are most profitable and farming out the rest.
Back to the company I work for - our USA business is stronger by also having a shop in Mexico. It's not a loss of jobs for USA workers; those jobs wouldn't exist here.