|
Read the rules in the OP before posting, please.In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up! NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action. |
On November 14 2013 04:36 IgnE wrote:
Yes, I know what you meant.
Then I don't understand why you made your comment. I was disputing the posted gap between wages and productivity, not the well-being or purchasing power of an average worker.
On November 14 2013 04:46 Roe wrote:Show nested quote +On November 14 2013 01:36 JonnyBNoHo wrote:On November 13 2013 23:12 Roe wrote:On November 13 2013 16:39 JonnyBNoHo wrote:On November 13 2013 15:00 Roe wrote:On November 13 2013 13:22 JonnyBNoHo wrote:On November 13 2013 09:43 Roe wrote:On November 13 2013 08:51 WhiteDog wrote:On November 13 2013 08:33 Roe wrote:On November 13 2013 07:59 JonnyBNoHo wrote:
[quote]
Not following. If you mean property tax you'll still owe it. If you mean income tax, reducing profit to avoid tax is a money losing prospect and would be the opposite of increasing productivity. If you mean hire someone to boost profits to offset the tax you should be doing that regardless.
Huh? O.o You spend the money you would have spent on taxes, on hiring people for productivity. Hiring people doesn't increase productivity, and the report from taxes to production is not proved empirically. If you're a good business leader hiring people definitely increases productivity. And we were talking about whether in principle it would occur. If you are a good business leader you don't hire people as part of some half-baked tax avoidance scheme. On November 13 2013 12:46 IgnE wrote:On November 13 2013 11:41 Danglars wrote:On November 12 2013 16:33 sam!zdat wrote:On November 12 2013 14:55 Danglars wrote:
That is the first thing that enters my mind when I hear Sam talking about this or that "exacerbat[ing] social inequality" or these expansionist conceptions of the welfare state. I wish you would listen to me I read every word and haven't been convinced yet. Frankly, you fly from subject to subject and argument to argument so fast in such little time that its hard to summarize what I've found out about your position. Granted, we've covered a lot of subject in the last hundred pages or so, so maybe some of it gets muddled in my mind. Just to grab a couple that concerned me: there's no opportunity to advance, civilization is just settling back into its usual pattern of tiny elites and massive underclass, after the anomalous interlude of large american middle class which is basically just a historical oddity you don't get it. a fully private healthcare system would just exacerbate social inequality and make even more obvious the gap between the haves and have nots. there's no politically feasible way to allow that to happen without also revolutionizing the relations of production and solving the deeper contradictions in the class structure of american society. government intervention in healthcare is part of the social democratic compromise that is the only thing holding the fabric of capitalist society together. the only possible capitalist state is the welfare state - if you don't like the welfare state (i hate it) you are going to have to start thinking about alternatives to capitalism. No on both counts for the reasons I stated. I might also add at this time that there will be political cost for politicians ok for the rich to keep their earned money and spend it on expensive yachts. They will appear to be no friends to the poor, even as much as that was an argument I saw surface when Romney was angling for the presidency. I'm saddened that you don't understand my position on class structure, claiming I haven't read what you said. With good swaths of individual freedom still preserved, there is no rigid class structure ... look no farther than the shifting lists of Forbes's richest people or longitudinal studies from census data and social sciences research groups. On a side note that you already know, I advocate policies I understand to be helpful in removing obstacles to income/class mobility etc. I'm not going along with your pessimistic attitude, not because of its pessimism (and in fact I hold a few of those attitudes even in the realm of eSports) but because of how I analyze it against reality. On November 12 2013 16:32 IgnE wrote:On November 12 2013 16:15 Danglars wrote:
[quote]
Inequality at its extreme is a problem. I don't see that in America today. I do see a political party more concerned with beating the rich down into submission than the actual plight of the poor. They're fine with the entire country less prosperous, if the poor maintains their lot in life, as long as net inequality goes down. I believe the opposite ... that inequality taken alone tells very little and the poorest societies can be those with the lowest inequality. It's a misplaced focus as much as it is a disgusting political tactic. Exacerbate envy for political purposes.
I find the people having your views are exactly those intent on policies that ensure the poor person on welfare will never be able to find a job with his skills. From taxation to regulation to minimum wage, the crusade is counterproductive to poverty. I brought up the welfare trap in regards to sam's conception of the welfare state, not on the topic of inequality.
[quote]
The race card has served your cause well. In the absence of a debate on ideas, insinuate your opponents are racists. Keep creating the very same poverty you decry. Keep hounding those in society actually concerned with welfare reform. So this graph doesn't bother you: ![[image loading]](http://assets.motherjones.com/politics/2011/inequality-page25_actualdistribwithlegend.png) That's not extreme inequality or you, personally, just don't see it out in your travels? Which political party is the one beating down the poor rich people into submission? The one led by the neoliberals or the other one led by the neoliberals? So according to you, if we had less welfare and fewer taxes the people collecting welfare right now could at least be earning $4 an hour picking oranges in Florida and apples in California. Do you not see the disconnect there? Your argument is that taxation and regulation makes it prohibitive to hire people who want to work, so if we removed those socialist barriers, we could get people currently on welfare out in the fields picking cotton instead of immigrants or people in the third world. How does that not result in higher inequality than the already egregious inequality seen in the above graph? You are right that that graph does not bother me, nor do I consider it extreme income inequality (and it is wealth in your graph and not income inequality). Just because one man earns an extra dollar does not mean that another must necessarily earn a dollar less. Just because the gap looks like that on the scale of wealth owned not income earned does not make the bottom of the barrel no different than the grinding poverty you can find in areas of Africa, for instance. Does the average rich man fly in million dollar vacations and the average poor man have no food, water, shelter and languish until death? No. On November 12 2013 23:10 JonnyBNoHo wrote:On November 12 2013 16:32 IgnE wrote:[quote] So this graph doesn't bother you: + Show Spoiler +That's not extreme inequality or you, personally, just don't see it out in your travels? Which political party is the one beating down the poor rich people into submission? The one led by the neoliberals or the other one led by the neoliberals? So according to you, if we had less welfare and fewer taxes the people collecting welfare right now could at least be earning $4 an hour picking oranges in Florida and apples in California. Do you not see the disconnect there? Your argument is that taxation and regulation makes it prohibitive to hire people who want to work, so if we removed those socialist barriers, we could get people currently on welfare out in the fields picking cotton instead of immigrants or people in the third world. How does that not result in higher inequality than the already egregious inequality seen in the above graph? Wealth inequality is really hard to deal with. I don't recall any plausible ideas out of the left to deal with that (mostly they seem to be concerned with income / consumption inequality). If you can think of any, remind me, it could be a good discussion. And to both your and Danglars' concerns - yes we need to put resources into helping the poor, but we also need to be concerned about how we deploy those resources. And many options for using those resources exist. Let's not box ourselves into either blindly throwing money at the problem or not trying at all. Wholeheartedly agree. Throwing money at the problem has not helped the problem. The War on Poverty arguably increased poverty. In 2011 we spent $19k on means-tested benefits (welfare) for every lower-income person (lowest third based on income). Heck, if you just cut that in a direct check it would be enough to lift every one to 200% of federal poverty level ( see for example here). I don't really even see the point of talking about wealth inequality unless you are proposing a wealth tax similar to France. And yes, Republicans do support the EITC (in particular a real negative income tax), particularly if it was used as a replacement for existing direct aid welfare schemes. It is pretty counter productive when you observe prior to such plans that many people faced marginal tax rates in excess of 100% if they left the dole for a low-wage job. Talk about an adverse economic incentive! Do you think the income inequality graph looks much different from the wealth inequality graph? ![[image loading]](http://acivilamericandebate.files.wordpress.com/2011/04/us-income-inequality_uneven_prosperity1.gif?w=640) 90% of the population on the far left. And it's only gotten worse since 2008. The vast majority of the rebound from the crash has gone entirely to the top 1%. But at least they aren't at African poverty level status with swollen bellies, malaria, and AIDS. http://www.brookings.edu/about/projects/bpea/latest-conference/2013-spring-permanent-inequality-panousiClass mobility is a lie. The opportunities to advance are shrinking rapidly.
Although the increase in inequality over the last two decades has been extensively documented in the economics and policy literature, the authors find that this inequality largely constituted an increase in permanent inequality. Using a large panel of income data from U.S. federal tax returns for the period 1987-2009, the authors show that for men’s labor earnings, the increase in inequality was entirely permanent (100 percent), while for total household income, roughly three-quarters of the increase in inequality was permanent. They estimate that the permanent variance for men’s earnings roughly doubled in the 20 years between 1987 and 2009, while the permanent variance of total household income increased by about 50 percent over the same period.
And it's only going to get worse as the lost earnings for the generation of 20-somethings who graduated during and after the crash are going to continue long into the future, resulting in significant losses in total lifetime earnings. I'm not sure the graph should be showing a negative income increase for the bottom 90% for 2000 - 2006. Do you know what definition of income they're using? Pre-tax, pre-transfer taxable income? As for your comment about the 1% benefiting more during the recovery, they also lost more during the recession. Their income is more volatile. Why not? pay 50 bucks, or pay 50 bucks and get more out of your company. easy choice. Because that's not how the math works. If you are discussing something like a property tax, hiring another employee will not reduce your tax burden. If you mean an income tax, then hiring the employee to be productive will result in more taxes owed. Meh, maybe it's just another thing that works everywhere else in the world. When you make less in profit you also pay less taxes. Maybe I'm thinking of corporate taxes. It doesn't work that way anywhere in the world. Paying $50 in extra labor doesn't save you $50 in corporate taxes. If you have the employee sit around and do nothing your costs will go up by $50 and you'll owe $50*.35=$17.5 less in taxes. So paid $50 to save $17.5 If you have the employee work and increase EBT (after the cost of the new employee is incurred) by $0, it's a wash. You have an extra employee and you still owe $50 in taxes. If you have the employee work and increase EBT (after the cost of the new employee is incurred) by >$0 you are better off, but you owe more than $50 in taxes. Hence why taxes should be at 100% 
How would you finance a company? 100% debt?
|
On November 14 2013 05:22 JonnyBNoHo wrote:Then I don't understand why you made your comment. I was disputing the posted gap between wages and productivity, not the well-being or purchasing power of an average worker. Show nested quote +On November 14 2013 04:46 Roe wrote:On November 14 2013 01:36 JonnyBNoHo wrote:On November 13 2013 23:12 Roe wrote:On November 13 2013 16:39 JonnyBNoHo wrote:On November 13 2013 15:00 Roe wrote:On November 13 2013 13:22 JonnyBNoHo wrote:On November 13 2013 09:43 Roe wrote:On November 13 2013 08:51 WhiteDog wrote:On November 13 2013 08:33 Roe wrote:
[quote]
Huh? O.o You spend the money you would have spent on taxes, on hiring people for productivity. Hiring people doesn't increase productivity, and the report from taxes to production is not proved empirically. If you're a good business leader hiring people definitely increases productivity. And we were talking about whether in principle it would occur. If you are a good business leader you don't hire people as part of some half-baked tax avoidance scheme. On November 13 2013 12:46 IgnE wrote:On November 13 2013 11:41 Danglars wrote:On November 12 2013 16:33 sam!zdat wrote:
[quote]
I wish you would listen to me I read every word and haven't been convinced yet. Frankly, you fly from subject to subject and argument to argument so fast in such little time that its hard to summarize what I've found out about your position. Granted, we've covered a lot of subject in the last hundred pages or so, so maybe some of it gets muddled in my mind. Just to grab a couple that concerned me: there's no opportunity to advance, civilization is just settling back into its usual pattern of tiny elites and massive underclass, after the anomalous interlude of large american middle class which is basically just a historical oddity you don't get it. a fully private healthcare system would just exacerbate social inequality and make even more obvious the gap between the haves and have nots. there's no politically feasible way to allow that to happen without also revolutionizing the relations of production and solving the deeper contradictions in the class structure of american society. government intervention in healthcare is part of the social democratic compromise that is the only thing holding the fabric of capitalist society together. the only possible capitalist state is the welfare state - if you don't like the welfare state (i hate it) you are going to have to start thinking about alternatives to capitalism. No on both counts for the reasons I stated. I might also add at this time that there will be political cost for politicians ok for the rich to keep their earned money and spend it on expensive yachts. They will appear to be no friends to the poor, even as much as that was an argument I saw surface when Romney was angling for the presidency. I'm saddened that you don't understand my position on class structure, claiming I haven't read what you said. With good swaths of individual freedom still preserved, there is no rigid class structure ... look no farther than the shifting lists of Forbes's richest people or longitudinal studies from census data and social sciences research groups. On a side note that you already know, I advocate policies I understand to be helpful in removing obstacles to income/class mobility etc. I'm not going along with your pessimistic attitude, not because of its pessimism (and in fact I hold a few of those attitudes even in the realm of eSports) but because of how I analyze it against reality. On November 12 2013 16:32 IgnE wrote:[quote] So this graph doesn't bother you: That's not extreme inequality or you, personally, just don't see it out in your travels? Which political party is the one beating down the poor rich people into submission? The one led by the neoliberals or the other one led by the neoliberals? So according to you, if we had less welfare and fewer taxes the people collecting welfare right now could at least be earning $4 an hour picking oranges in Florida and apples in California. Do you not see the disconnect there? Your argument is that taxation and regulation makes it prohibitive to hire people who want to work, so if we removed those socialist barriers, we could get people currently on welfare out in the fields picking cotton instead of immigrants or people in the third world. How does that not result in higher inequality than the already egregious inequality seen in the above graph? You are right that that graph does not bother me, nor do I consider it extreme income inequality (and it is wealth in your graph and not income inequality). Just because one man earns an extra dollar does not mean that another must necessarily earn a dollar less. Just because the gap looks like that on the scale of wealth owned not income earned does not make the bottom of the barrel no different than the grinding poverty you can find in areas of Africa, for instance. Does the average rich man fly in million dollar vacations and the average poor man have no food, water, shelter and languish until death? No. On November 12 2013 23:10 JonnyBNoHo wrote:
[quote]
Wealth inequality is really hard to deal with. I don't recall any plausible ideas out of the left to deal with that (mostly they seem to be concerned with income / consumption inequality). If you can think of any, remind me, it could be a good discussion.
And to both your and Danglars' concerns - yes we need to put resources into helping the poor, but we also need to be concerned about how we deploy those resources. And many options for using those resources exist. Let's not box ourselves into either blindly throwing money at the problem or not trying at all. Wholeheartedly agree. Throwing money at the problem has not helped the problem. The War on Poverty arguably increased poverty. In 2011 we spent $19k on means-tested benefits (welfare) for every lower-income person (lowest third based on income). Heck, if you just cut that in a direct check it would be enough to lift every one to 200% of federal poverty level ( see for example here). I don't really even see the point of talking about wealth inequality unless you are proposing a wealth tax similar to France. And yes, Republicans do support the EITC (in particular a real negative income tax), particularly if it was used as a replacement for existing direct aid welfare schemes. It is pretty counter productive when you observe prior to such plans that many people faced marginal tax rates in excess of 100% if they left the dole for a low-wage job. Talk about an adverse economic incentive! Do you think the income inequality graph looks much different from the wealth inequality graph? 90% of the population on the far left. And it's only gotten worse since 2008. The vast majority of the rebound from the crash has gone entirely to the top 1%. But at least they aren't at African poverty level status with swollen bellies, malaria, and AIDS. http://www.brookings.edu/about/projects/bpea/latest-conference/2013-spring-permanent-inequality-panousiClass mobility is a lie. The opportunities to advance are shrinking rapidly.
Although the increase in inequality over the last two decades has been extensively documented in the economics and policy literature, the authors find that this inequality largely constituted an increase in permanent inequality. Using a large panel of income data from U.S. federal tax returns for the period 1987-2009, the authors show that for men’s labor earnings, the increase in inequality was entirely permanent (100 percent), while for total household income, roughly three-quarters of the increase in inequality was permanent. They estimate that the permanent variance for men’s earnings roughly doubled in the 20 years between 1987 and 2009, while the permanent variance of total household income increased by about 50 percent over the same period.
And it's only going to get worse as the lost earnings for the generation of 20-somethings who graduated during and after the crash are going to continue long into the future, resulting in significant losses in total lifetime earnings. I'm not sure the graph should be showing a negative income increase for the bottom 90% for 2000 - 2006. Do you know what definition of income they're using? Pre-tax, pre-transfer taxable income? As for your comment about the 1% benefiting more during the recovery, they also lost more during the recession. Their income is more volatile. Why not? pay 50 bucks, or pay 50 bucks and get more out of your company. easy choice. Because that's not how the math works. If you are discussing something like a property tax, hiring another employee will not reduce your tax burden. If you mean an income tax, then hiring the employee to be productive will result in more taxes owed. Meh, maybe it's just another thing that works everywhere else in the world. When you make less in profit you also pay less taxes. Maybe I'm thinking of corporate taxes. It doesn't work that way anywhere in the world. Paying $50 in extra labor doesn't save you $50 in corporate taxes. If you have the employee sit around and do nothing your costs will go up by $50 and you'll owe $50*.35=$17.5 less in taxes. So paid $50 to save $17.5 If you have the employee work and increase EBT (after the cost of the new employee is incurred) by $0, it's a wash. You have an extra employee and you still owe $50 in taxes. If you have the employee work and increase EBT (after the cost of the new employee is incurred) by >$0 you are better off, but you owe more than $50 in taxes. Hence why taxes should be at 100% How would you finance a company? 100% debt?
In such a system the government would obviously be funding new start ups. They take 100% of the profits after all.
|
WASHINGTON -- House Speaker John Boehner (R-Ohio) insisted on Wednesday that even though House Republicans have moved slowly on immigration reform, they're still planning to work on it -- but not by combining their efforts with the already-passed Senate bill.
"The idea that we're going to take up a 1,300-page bill that no one had ever read, which is what the Senate did, is not going to happen in the House," Boehner said at a press conference. "And frankly, I'll make clear: We have no intention of ever going to conference on the Senate bill."
The bipartisan Senate bill passed in June in a 68-32 vote, but was immediately shot down by Boehner, who said he would not hold a vote on anything without majority GOP support. But that was months ago, and long after House Republicans leaders committed to working on immigration reform this year. Bills approved by the House Judiciary Committee, which deals with immigration issues, haven't gone for votes, either.
Democrats and advocates argue that the Senate bill could pass if it went for a vote -- most Democratic members and three GOP members support a bill based on the legislation -- but so far, it doesn't seem likely that the measure will get the chance.
GOP Majority Whip Kevin McCarthy (R-Calif.) told reform advocates last week that there is no time to hold votes on immigration this year. Boehner said Judiciary Committee Chairman Bob Goodlatte (R-Va.) is working with Republicans and Democrats "on a set of principles that will help guide us as we deal with this issue." Boehner did not, however, give a straight answer when asked whether there would be votes this year.
Source
|
2nd Worst City in CA8938 Posts
It's your job to read it, asswipe. What a horrid excuse.
|
"Were going to pretend the Senate didn't do there job so that we don't have to do our job, Oh and if it comes up for a vote it go's through so were going to not let that happen to make us not look bad except it makes us look bad to immigrants which is a demography we are losing anyway"
|
yeah, that's why they deserve to lose their jobs, and be jailed.
More amendments to the constitution to fix these things.
|
On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich.
But you're aware that pay is set by the owners and managers of the company, not by the employees, yes? So if Mark Zuckerberg wants to pay himself $2 billion and pay an entry level customer service rep at Facebook $25k, that's his prerogative, not the rep's. You don't get to round up the other employees and decide how much your boss gets paid, particularly if he owns the business.
But it's a double edged sword. CEOs don't last forever at their high pay, in fact they tend to get fired quite quickly if they don't deliver excellent results. Large companies pay those amounts to find people with the Midas touch but they're under tremendous pressure, far more than you at a more "reasonable" rate in a lower job.
Since I live in Japan now, I will tell you that what I see is the opposite problem here. CEOs aren't paid exorbitantly here but as a consequence, they take no risks and are incentivized to leave companies drifting along on stability rather than growth. A CEO can only be fired if he royally screws up, if the company loses a lot of money or he gets caught committing a crime. That's part of the reason that large Japanese companies have shrunk, particularly in electronics and technology. To put it in perspective, Samsung is 3x bigger than all the Japanese electronics companies put together.
I'm not defending US inequality or gross CEO pay. Just pointing out who gets to decide CEO pay (not employees) and the downsides to a world where CEOs have no benefit in pay to take risks.
|
On November 14 2013 06:12 Souma wrote:
It's your job to read it, asswipe. What a horrid excuse.
Yeah, in the Obama presidency, the "nobody has read this bill so we won't vote for it" excuse is bizarre. I wonder how true it is. Democrats don't seem particularly quick to deny it and insist they've read it...
|
On November 14 2013 08:44 coverpunch wrote:Show nested quote +On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. But you're aware that pay is set by the owners and managers of the company, not by the employees, yes? So if Mark Zuckerberg wants to pay himself $2 billion and pay an entry level customer service rep at Facebook $25k, that's his prerogative, not the rep's. You don't get to round up the other employees and decide how much your boss gets paid, particularly if he owns the business. But it's a double edged sword. CEOs don't last forever at their high pay, in fact they tend to get fired quite quickly if they don't deliver excellent results. Large companies pay those amounts to find people with the Midas touch but they're under tremendous pressure, far more than you at a more "reasonable" rate in a lower job. Since I live in Japan now, I will tell you that what I see is the opposite problem here. CEOs aren't paid exorbitantly here but as a consequence, they take no risks and are incentivized to leave companies drifting along on stability rather than growth. A CEO can only be fired if he royally screws up, if the company loses a lot of money or he gets caught committing a crime. That's part of the reason that large Japanese companies have shrunk, particularly in electronics and technology. To put it in perspective, Samsung is 3x bigger than all the Japanese electronics companies put together. I'm not defending US inequality or gross CEO pay. Just pointing out who gets to decide CEO pay (not employees) and the downsides to a world where CEOs have no benefit in pay to take risks.
but the CEOs that built up those Japanese companies werent paid high salaries either. Seems like the relationship between CEO salary and performance is at best speculative. But I do agree, the fact that board of directors and the shareholders that elect them seem to be incapable of policing their CEOs says something as well, especially in this day and age when large blocks of shares are controlled by institutional investors that actually have the willpower and financial strength to say no to CEOs.
|
On November 14 2013 03:10 JonnyBNoHo wrote:Show nested quote +On November 14 2013 03:00 WhiteDog wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. And to add to your point, this idea of incentive is also empirically wrong because when the average workers becomes more productive, more efficient in their work, they are not paid more anymore in the US (and in many developped countries). Proof ![[image loading]](http://www.washingtonpost.com/blogs/wonkblog/files/2013/07/SherkImage1.gif) http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/ The graph is incorrect in terms of the economic theory. It should be productivity vs labor compensation (not wages) and compensation should use the same deflator as productivity (not CPI). There's still a bit of a breakdown, but not as dramatic.
You're spouting nonsense, read the graph you are talking about is below in the article I linked, and it is not more "true" than the first graph.
Everything you say just shows how fragile your knowledge of economy is. All indicators are imperfect, and thus imperfectly reflect reality. For exemple, I could say that average wage or average compensation also is wrong as it is indirectly diminishing the fact that "people are not paid more when they work more efficiently" because one could think high income workers might hide part of this process (something median wage or compensation would be able to see).
You can question indicator all you want, but even with a different indicator (labor compensation) the fact still remain : there is a gap between productivity gain and disposable income in most developped countries and this gap is specifically touching middle class worker.
Also the fact that inequality has "positive effect on the economy" doesn't mean shit too. It is just an ideological justification, but it says nothing about the degree of inequality nor about the type of inequalities. Some are acceptable, others are not, some might have positive impact on the economy, some certainly not.
We're reaching the same point, were you cannot justify your arguments and your ideology just shows up, just like that time when you argued that market are efficient because market are efficient, without - I'm pretty sure of it - actually understanding what economists means when they say that market are "efficient".
|
On November 14 2013 08:45 coverpunch wrote:Show nested quote +On November 14 2013 06:12 Souma wrote:
It's your job to read it, asswipe. What a horrid excuse. Yeah, in the Obama presidency, the "nobody has read this bill so we won't vote for it" excuse is bizarre. I wonder how true it is. Democrats don't seem particularly quick to deny it and insist they've read it...
Why should they? Do they need to defend themselves feverishly every time the Republicans mention something?
Heck its not even relevant to the bill coming up for a vote or not.
Because someone is bound to bring it up.
This go's both ways ofc.
|
On November 14 2013 09:15 Gorsameth wrote:Show nested quote +On November 14 2013 08:45 coverpunch wrote:On November 14 2013 06:12 Souma wrote:
It's your job to read it, asswipe. What a horrid excuse. Yeah, in the Obama presidency, the "nobody has read this bill so we won't vote for it" excuse is bizarre. I wonder how true it is. Democrats don't seem particularly quick to deny it and insist they've read it... Why should they? Do they need to defend themselves feverishly every time the Republicans mention something? Heck its not even relevant to the bill coming up for a vote or not. Because someone is bound to bring it up. This go's both ways ofc.
I also think this is pretty obviously an attempt to damage credibility. If any democrat says they have read it a reporter will grill them about the law on the spot. I consider myself pretty smart and I enjoy reading but if you put me in a room and had me read thousands of pages of legislation my ability to recall specific details on command would be limited. In a world where the story "Democrat A didn't know the third word on page 145, clearly incompetent" has resonance with the public, why take the risk.
|
On November 14 2013 09:14 WhiteDog wrote:Show nested quote +On November 14 2013 03:10 JonnyBNoHo wrote:On November 14 2013 03:00 WhiteDog wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. And to add to your point, this idea of incentive is also empirically wrong because when the average workers becomes more productive, more efficient in their work, they are not paid more anymore in the US (and in many developped countries). Proof http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/ The graph is incorrect in terms of the economic theory. It should be productivity vs labor compensation (not wages) and compensation should use the same deflator as productivity (not CPI). There's still a bit of a breakdown, but not as dramatic. You're spouting nonsense, read the graph you are talking about is below in the article I linked, and it is not more "true" than the first graph. Everything you say just shows how fragile your knowledge of economy is. All indicators are imperfect, and thus imperfectly reflect reality. For exemple, I could say that average wage or average compensation also is wrong as it is indirectly diminishing the fact that "people are not paid more when they work more efficiently" because one could think high income workers might hide part of this process (something median wage or compensation would be able to see). You can question indicator all you want, but even with a different indicator (labor compensation) the fact still remain : there is a gap between productivity gain and disposable income in most developped countries and this gap is specifically touching middle class worker. Also the fact that inequality has "positive effect on the economy" doesn't mean shit too. It is just an ideological justification, but it says nothing about the degree of inequality nor about the type of inequalities. Some are acceptable, others are not, some might have positive impact on the economy, some certainly not. We're reaching the same point, were you cannot justify your arguments and your ideology just shows up, just like that time when you argued that market are efficient because market are efficient, without - I'm pretty sure of it - actually understanding what economists means when they say that market are "efficient".
There is supposed to be a link between productivity and compensation, not productivity and wages. The link should be expressed in apples to apples terms. That is, they should both be deflated using the same index.
Moreover, as I already stated if you use the correct terms, there is still a gap. Refuting me on the grounds that there is still a gap is not refuting me at all since I already pointed out that a gap remains!
As for my comment on the positive effects of inequality, I wrote that it has both positive and negative effects. Refuting me on the grounds that "some [types and degrees] are acceptable, others are not" is, again, not refuting me at all!
Really, is something lost in translation here? Read what I write.
|
On November 14 2013 10:08 JonnyBNoHo wrote:Show nested quote +On November 14 2013 09:14 WhiteDog wrote:On November 14 2013 03:10 JonnyBNoHo wrote:On November 14 2013 03:00 WhiteDog wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. And to add to your point, this idea of incentive is also empirically wrong because when the average workers becomes more productive, more efficient in their work, they are not paid more anymore in the US (and in many developped countries). Proof http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/ The graph is incorrect in terms of the economic theory. It should be productivity vs labor compensation (not wages) and compensation should use the same deflator as productivity (not CPI). There's still a bit of a breakdown, but not as dramatic. You're spouting nonsense, read the graph you are talking about is below in the article I linked, and it is not more "true" than the first graph. Everything you say just shows how fragile your knowledge of economy is. All indicators are imperfect, and thus imperfectly reflect reality. For exemple, I could say that average wage or average compensation also is wrong as it is indirectly diminishing the fact that "people are not paid more when they work more efficiently" because one could think high income workers might hide part of this process (something median wage or compensation would be able to see). You can question indicator all you want, but even with a different indicator (labor compensation) the fact still remain : there is a gap between productivity gain and disposable income in most developped countries and this gap is specifically touching middle class worker. Also the fact that inequality has "positive effect on the economy" doesn't mean shit too. It is just an ideological justification, but it says nothing about the degree of inequality nor about the type of inequalities. Some are acceptable, others are not, some might have positive impact on the economy, some certainly not. We're reaching the same point, were you cannot justify your arguments and your ideology just shows up, just like that time when you argued that market are efficient because market are efficient, without - I'm pretty sure of it - actually understanding what economists means when they say that market are "efficient". There is supposed to be a link between productivity and compensation, not productivity and wages. The link should be expressed in apples to apples terms. That is, they should both be deflated using the same index. Moreover, as I already stated if you use the correct terms, there is still a gap. Refuting me on the grounds that there is still a gap is not refuting me at all since I already pointed out that a gap remains! As for my comment on the positive effects of inequality, I wrote that it has both positive and negative effects. Refuting me on the grounds that "some [types and degrees] are acceptable, others are not" is, again, not refuting me at all! Really, is something lost in translation here? Read what I write.
Then what's the point of the discussion if you're only pointing out small things that doesn't contribute at all to the main point ? When you asses that there are "positive effect" to inequality, you stay vague and don't explain your point, while you go into the detail of the indicator when something does not go along with your own vision of "the economy". That's why I'm bothered by your answers, nothing is lost in translation.
To clarify, I'll just quote Krugman :
Larry Mishel has a systematic breakdown of the reasons for worker income stagnation since 1973. He starts with the familiar divergence: productivity up 80 percent, the compensation (including benefits) of the median worker up only 11 percent. Where did the productivity go?
The answer is, it’s two-thirds the inequality, stupid. [...]
What this says is that widening inequality makes a huge difference. Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared.
http://krugman.blogs.nytimes.com/2012/04/28/where-the-productivity-went/?_r=0
|
Norway28674 Posts
On November 14 2013 08:44 coverpunch wrote:Show nested quote +On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. But you're aware that pay is set by the owners and managers of the company, not by the employees, yes? So if Mark Zuckerberg wants to pay himself $2 billion and pay an entry level customer service rep at Facebook $25k, that's his prerogative, not the rep's. You don't get to round up the other employees and decide how much your boss gets paid, particularly if he owns the business. But it's a double edged sword. CEOs don't last forever at their high pay, in fact they tend to get fired quite quickly if they don't deliver excellent results. Large companies pay those amounts to find people with the Midas touch but they're under tremendous pressure, far more than you at a more "reasonable" rate in a lower job. Since I live in Japan now, I will tell you that what I see is the opposite problem here. CEOs aren't paid exorbitantly here but as a consequence, they take no risks and are incentivized to leave companies drifting along on stability rather than growth. A CEO can only be fired if he royally screws up, if the company loses a lot of money or he gets caught committing a crime. That's part of the reason that large Japanese companies have shrunk, particularly in electronics and technology. To put it in perspective, Samsung is 3x bigger than all the Japanese electronics companies put together. I'm not defending US inequality or gross CEO pay. Just pointing out who gets to decide CEO pay (not employees) and the downsides to a world where CEOs have no benefit in pay to take risks.
1: Obviously gross CEO pay is a consequence of workers having no say in the matter. If they did, the inequality would be more in line with how people actually want the inequality to be. I mean, what you're saying here explains why there's such gross pay inequality, but it doesn't justify it or even attempt to showcase that it is in any way societally beneficial.
2: I don't think you can state that lack of exorbidant pay is the sole, or even main reason why japanese CEOs are more risk-averse. I think this also correlates strongly with general societal mentality; japanese CEOs, from my understanding, feel an incredible responsibility for their worker's safety. While I'm not gonna challenge your knowledge of japanese society as you live there and I've never been there, I certainly need some more convincing that the relatively low pay of CEOs is the sole/main reason why they take no risks before I accept that as truth.
3: I don't think what the western world actually needs is continued economic growth. From my perspective, stability should be prioritized over growth. Not that growth is necessarily bad (although I would argue that increased consumption absolutely is - and economic growth is normally followed by increased consumption) - but this is more of an ecological point than an economical one and if somehow increased economic growth caused more ecologically-minded consumption rather than more consumption period then I'd be willing to accept it as a good. But like, all western countries have more than enough resources to supply every inhabitant with their actual needs.
4: From my quick google search, which according to this page (frankly I don't know its credibility but it seems fair enough), the top 327 american companies on average have CEOs earning 350 times entry level pay. In Japan, the number is 67. From my norwegian perspective, 67 times entry level pay is absolutely exorbidant. In Japan, one year of labor for a CEO pays more than a lifetime for a regular employee. It doesn't make sense to me. In USA, three months as a CEO in a large company means you're set for life. I mean, I can see how this type of pay makes people more willing to take risks - because they're already so wealthy that it hardly even matters if they fail. But I don't understand how that is good. Obviously CEOs are people and they want to succeed even without money being a factor, because feeling of accomplishment/mastery is an incredible motivator for humans everywhere, but I fail to see how this incredible income/wealth is in any way beneficial. Like, I've had a part time job in a factory for some years now. I have one boss, who is the boss of like 40 people, and he has one boss, who basically is the boss of like 160 people. My boss makes like twice as much as I do, and the boss above him makes like three times as much as I do. From my perspective, THIS is an actual incentive for them to do an as good job as possible, on a long term basis, because they cannot quickly accumulate so much wealth that the prosperity of the company becomes financially irrelevant to them. At the same time, the difference between around $70k and $140k and $210k is so significant that they themselves feel that the added responsibility and working hours is actually worth it.
5: I don't think there's any quick fix to this problem, but it's definitely not gonna improve if people just accept this degree of income inequality as an inevitability. I actually used to think that there was a huge difference in mentality between the east and west side of the atlantic - but when I see charts where americans state how they ideally think wealth/income should be distributed, they're actually largely in agreement with my point of view. Americans don't want the inequality to be this gross, but somehow they're even more averse towards political changes that could alleviate the problem. The true tragedy is that your politicians have showcased such gross malpractice that people are more willing to entrust the future of your country to absolutely greedy CEOs than politicians whom ideally should want nothing more than to improve your standard of living. 
|
On November 14 2013 05:22 JonnyBNoHo wrote:Then I don't understand why you made your comment. I was disputing the posted gap between wages and productivity, not the well-being or purchasing power of an average worker.
What is the basis of your disputation? You must mean that while wages have not gone up, compensation for labor has. Explain how that is so.
|
On November 14 2013 10:15 WhiteDog wrote:Show nested quote +On November 14 2013 10:08 JonnyBNoHo wrote:On November 14 2013 09:14 WhiteDog wrote:On November 14 2013 03:10 JonnyBNoHo wrote:On November 14 2013 03:00 WhiteDog wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. And to add to your point, this idea of incentive is also empirically wrong because when the average workers becomes more productive, more efficient in their work, they are not paid more anymore in the US (and in many developped countries). Proof http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/ The graph is incorrect in terms of the economic theory. It should be productivity vs labor compensation (not wages) and compensation should use the same deflator as productivity (not CPI). There's still a bit of a breakdown, but not as dramatic. You're spouting nonsense, read the graph you are talking about is below in the article I linked, and it is not more "true" than the first graph. Everything you say just shows how fragile your knowledge of economy is. All indicators are imperfect, and thus imperfectly reflect reality. For exemple, I could say that average wage or average compensation also is wrong as it is indirectly diminishing the fact that "people are not paid more when they work more efficiently" because one could think high income workers might hide part of this process (something median wage or compensation would be able to see). You can question indicator all you want, but even with a different indicator (labor compensation) the fact still remain : there is a gap between productivity gain and disposable income in most developped countries and this gap is specifically touching middle class worker. Also the fact that inequality has "positive effect on the economy" doesn't mean shit too. It is just an ideological justification, but it says nothing about the degree of inequality nor about the type of inequalities. Some are acceptable, others are not, some might have positive impact on the economy, some certainly not. We're reaching the same point, were you cannot justify your arguments and your ideology just shows up, just like that time when you argued that market are efficient because market are efficient, without - I'm pretty sure of it - actually understanding what economists means when they say that market are "efficient". There is supposed to be a link between productivity and compensation, not productivity and wages. The link should be expressed in apples to apples terms. That is, they should both be deflated using the same index. Moreover, as I already stated if you use the correct terms, there is still a gap. Refuting me on the grounds that there is still a gap is not refuting me at all since I already pointed out that a gap remains! As for my comment on the positive effects of inequality, I wrote that it has both positive and negative effects. Refuting me on the grounds that "some [types and degrees] are acceptable, others are not" is, again, not refuting me at all! Really, is something lost in translation here? Read what I write. Then what's the point of the discussion if you're only pointing out small things that doesn't contribute at all to the main point ? When you asses that there are "positive effect" to inequality, you stay vague and don't explain your point, while you go into the detail of the indicator when something does not go along with your own vision of "the economy". That's why I'm bothered by your answers, nothing is lost in translation. To clarify, I'll just quote Krugman : Show nested quote +Larry Mishel has a systematic breakdown of the reasons for worker income stagnation since 1973. He starts with the familiar divergence: productivity up 80 percent, the compensation (including benefits) of the median worker up only 11 percent. Where did the productivity go?
The answer is, it’s two-thirds the inequality, stupid. [...]
What this says is that widening inequality makes a huge difference. Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared. http://krugman.blogs.nytimes.com/2012/04/28/where-the-productivity-went/?_r=0
WhiteDog, you made specific comments that I disagreed with on the grounds that I believed them to be factually inaccurate. The article you drew your graph from agrees with me, not you, on that point. If that's problematic to the "main point" you are trying to make - too fucking bad. Put on your big kid pants, admit the error, and stress that the main point is still valid.
I'm not sure where you are going with the Krugman quote. Average productivity increases for the entire economy aren't supposed to translate to compensation increases for every job or every industry or every income class. If your main point is that inequality has increased, you don't need to draw odd references to productivity to make that point - just point to the inequality itself.
|
On November 14 2013 10:39 JonnyBNoHo wrote:Show nested quote +On November 14 2013 10:15 WhiteDog wrote:On November 14 2013 10:08 JonnyBNoHo wrote:On November 14 2013 09:14 WhiteDog wrote:On November 14 2013 03:10 JonnyBNoHo wrote:On November 14 2013 03:00 WhiteDog wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. And to add to your point, this idea of incentive is also empirically wrong because when the average workers becomes more productive, more efficient in their work, they are not paid more anymore in the US (and in many developped countries). Proof http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/ The graph is incorrect in terms of the economic theory. It should be productivity vs labor compensation (not wages) and compensation should use the same deflator as productivity (not CPI). There's still a bit of a breakdown, but not as dramatic. You're spouting nonsense, read the graph you are talking about is below in the article I linked, and it is not more "true" than the first graph. Everything you say just shows how fragile your knowledge of economy is. All indicators are imperfect, and thus imperfectly reflect reality. For exemple, I could say that average wage or average compensation also is wrong as it is indirectly diminishing the fact that "people are not paid more when they work more efficiently" because one could think high income workers might hide part of this process (something median wage or compensation would be able to see). You can question indicator all you want, but even with a different indicator (labor compensation) the fact still remain : there is a gap between productivity gain and disposable income in most developped countries and this gap is specifically touching middle class worker. Also the fact that inequality has "positive effect on the economy" doesn't mean shit too. It is just an ideological justification, but it says nothing about the degree of inequality nor about the type of inequalities. Some are acceptable, others are not, some might have positive impact on the economy, some certainly not. We're reaching the same point, were you cannot justify your arguments and your ideology just shows up, just like that time when you argued that market are efficient because market are efficient, without - I'm pretty sure of it - actually understanding what economists means when they say that market are "efficient". There is supposed to be a link between productivity and compensation, not productivity and wages. The link should be expressed in apples to apples terms. That is, they should both be deflated using the same index. Moreover, as I already stated if you use the correct terms, there is still a gap. Refuting me on the grounds that there is still a gap is not refuting me at all since I already pointed out that a gap remains! As for my comment on the positive effects of inequality, I wrote that it has both positive and negative effects. Refuting me on the grounds that "some [types and degrees] are acceptable, others are not" is, again, not refuting me at all! Really, is something lost in translation here? Read what I write. Then what's the point of the discussion if you're only pointing out small things that doesn't contribute at all to the main point ? When you asses that there are "positive effect" to inequality, you stay vague and don't explain your point, while you go into the detail of the indicator when something does not go along with your own vision of "the economy". That's why I'm bothered by your answers, nothing is lost in translation. To clarify, I'll just quote Krugman : Larry Mishel has a systematic breakdown of the reasons for worker income stagnation since 1973. He starts with the familiar divergence: productivity up 80 percent, the compensation (including benefits) of the median worker up only 11 percent. Where did the productivity go?
The answer is, it’s two-thirds the inequality, stupid. [...]
What this says is that widening inequality makes a huge difference. Income stagnation does not reflect overall economic stagnation; the incomes of typical workers would be 30 or 40 percent higher than they are if inequality hadn’t soared. http://krugman.blogs.nytimes.com/2012/04/28/where-the-productivity-went/?_r=0 WhiteDog, you made specific comments that I disagreed with on the grounds that I believed them to be factually inaccurate. The article you drew your graph from agrees with me, not you, on that point. If that's problematic to the "main point" you are trying to make - too fucking bad. Put on your big kid pants, admit the error, and stress that the main point is still valid. I'm not sure where you are going with the Krugman quote. Average productivity increases for the entire economy aren't supposed to translate to compensation increases for every job or every industry or every income class. If your main point is that inequality has increased, you don't need to draw odd references to productivity to make that point - just point to the inequality itself.
What ? I'm sorry, but I showed post after post, that there is an income problem, that there are rising inequalities, and that there is indeed a correlation between low marginal taxation rate and inequalities. All you did was saying some nonsense about savings, argue indicators - I only quickly copy/paste a curve because, guess what, I'm french and my own curve are in french (and "compensation" doesn't mean anything to me as we use the term "revenue").
So all in all, you argued over nothing and now you're waving a flag like you've conquered the nothing we've been arguing.
Can we at least agree marginal taxation rate could lower inequality ? Can we at least agree that middle ground income are suffering ? That working more, when you are a middle class worker, doesn't equal in higher wage ? That mobility in the US is weaker than in most other more equal countries ?
Because all those are the facts I have been talking about.
|
On November 14 2013 10:21 IgnE wrote:Show nested quote +On November 14 2013 05:22 JonnyBNoHo wrote:On November 14 2013 04:36 IgnE wrote:
Yes, I know what you meant. Then I don't understand why you made your comment. I was disputing the posted gap between wages and productivity, not the well-being or purchasing power of an average worker. What is the basis of your disputation? You must mean that while wages have not gone up, compensation for labor has. Explain how that is so.
Employers pay employees with wages and benefits. Benefits have risen as a share of total compensation. Some of the loss of wages have been gains in benefits.
There's also an issue with how productivity and real compensation are calculated. Productivity is typically calculated using the price deflator, while real wages are calculated using CPI. One isn't necessarily better than the other, but both measures should be converted to real terms the same way, otherwise you aren't comparing apples to apples.
There's an explanation of this in the article WhiteDog linked to here. Or a NEBR working paper explanation here.
|
On November 14 2013 10:18 Liquid`Drone wrote:Show nested quote +On November 14 2013 08:44 coverpunch wrote:On November 14 2013 02:56 Liquid`Drone wrote:
yes. the notion that a CEO needs 600 times entry level salary to be motivated to do a good job is absolutely ridiculous. Some inequality is not bad though, and hardly anyone claims that some inequality is bad. That's why the chart with "this is how americans want wealth to be distributed - this is how they think it is - this is how it really is" chart is so powerful, because how americans want wealth to be distributed is actually very sensible, whereas the reality is so incredibly different from that. (and yes I know wealth distribution is very different from income distribution and the income distribution chart wouldn't be equally as top heavy, but whatever, wealth one was linked and debated recently. )
I don't mind my boss making twice as much as I do. He has more responsibility, he occasionally needs to have some really emotionally taxing meetings, he's not done with his job when he goes home. But would he want to trade jobs and salary with me? No way. He likes his wealth, and twice my pay actually makes him wealthy. Would he prefer 300 times as much as he's getting now? sure, but he does a great job even with just twice my salary, and if he was getting 300 times more, then that would either mean taking 10% of the paycheck from 6000 people, or it would mean that 599 people are out of a job, or somewhere in between those numbers. In the US, and well, many other parts of the world (but I only ever see non-wealthy americans actually defend this system), the salaries of the most wealthy are completely blown out of proportion, there's no reason why your top earners need to make so much, and it greatly hurts your society. CEO's of big companies could literally slice away 99% of their income and they would STILL be rich. But you're aware that pay is set by the owners and managers of the company, not by the employees, yes? So if Mark Zuckerberg wants to pay himself $2 billion and pay an entry level customer service rep at Facebook $25k, that's his prerogative, not the rep's. You don't get to round up the other employees and decide how much your boss gets paid, particularly if he owns the business. But it's a double edged sword. CEOs don't last forever at their high pay, in fact they tend to get fired quite quickly if they don't deliver excellent results. Large companies pay those amounts to find people with the Midas touch but they're under tremendous pressure, far more than you at a more "reasonable" rate in a lower job. Since I live in Japan now, I will tell you that what I see is the opposite problem here. CEOs aren't paid exorbitantly here but as a consequence, they take no risks and are incentivized to leave companies drifting along on stability rather than growth. A CEO can only be fired if he royally screws up, if the company loses a lot of money or he gets caught committing a crime. That's part of the reason that large Japanese companies have shrunk, particularly in electronics and technology. To put it in perspective, Samsung is 3x bigger than all the Japanese electronics companies put together. I'm not defending US inequality or gross CEO pay. Just pointing out who gets to decide CEO pay (not employees) and the downsides to a world where CEOs have no benefit in pay to take risks. 1: Obviously gross CEO pay is a consequence of workers having no say in the matter. If they did, the inequality would be more in line with how people actually want the inequality to be. I mean, what you're saying here explains why there's such gross pay inequality, but it doesn't justify it or even attempt to showcase that it is in any way societally beneficial. 2: I don't think you can state that lack of exorbidant pay is the sole, or even main reason why japanese CEOs are more risk-averse. I think this also correlates strongly with general societal mentality; japanese CEOs, from my understanding, feel an incredible responsibility for their worker's safety. While I'm not gonna challenge your knowledge of japanese society as you live there and I've never been there, I certainly need some more convincing that the relatively low pay of CEOs is the sole/main reason why they take no risks before I accept that as truth. 3: I don't think what the western world actually needs is continued economic growth. From my perspective, stability should be prioritized over growth. Not that growth is necessarily bad (although I would argue that increased consumption absolutely is - and economic growth is normally followed by increased consumption) - but this is more of an ecological point than an economical one and if somehow increased economic growth caused more ecologically-minded consumption rather than more consumption period then I'd be willing to accept it as a good. But like, all western countries have more than enough resources to supply every inhabitant with their actual needs. 4: From my quick google search, which according to this page (frankly I don't know its credibility but it seems fair enough), the top 327 american companies on average have CEOs earning 350 times entry level pay. In Japan, the number is 67. From my norwegian perspective, 67 times entry level pay is absolutely exorbidant. In Japan, one year of labor for a CEO pays more than a lifetime for a regular employee. It doesn't make sense to me. In USA, three months as a CEO in a large company means you're set for life. I mean, I can see how this type of pay makes people more willing to take risks - because they're already so wealthy that it hardly even matters if they fail. But I don't understand how that is good. Obviously CEOs are people and they want to succeed even without money being a factor, because feeling of accomplishment/mastery is an incredible motivator for humans everywhere, but I fail to see how this incredible income/wealth is in any way beneficial. Like, I've had a part time job in a factory for some years now. I have one boss, who is the boss of like 40 people, and he has one boss, who basically is the boss of like 160 people. My boss makes like twice as much as I do, and the boss above him makes like three times as much as I do. From my perspective, THIS is an actual incentive for them to do an as good job as possible, on a long term basis, because they cannot quickly accumulate so much wealth that the prosperity of the company becomes financially irrelevant to them. At the same time, the difference between around $70k and $140k and $210k is so significant that they themselves feel that the added responsibility and working hours is actually worth it. 5: I don't think there's any quick fix to this problem, but it's definitely not gonna improve if people just accept this degree of income inequality as an inevitability. I actually used to think that there was a huge difference in mentality between the east and west side of the atlantic - but when I see charts where americans state how they ideally think wealth/income should be distributed, they're actually largely in agreement with my point of view. Americans don't want the inequality to be this gross, but somehow they're even more averse towards political changes that could alleviate the problem. The true tragedy is that your politicians have showcased such gross malpractice that people are more willing to entrust the future of your country to absolutely greedy CEOs than politicians whom ideally should want nothing more than to improve your standard of living.
I totally agree. High ranking executives are payed so much today that their own financial success becomes effectively decoupled from the long term welfare of the company. In addition to that, the friction that arises in a society when wealth inequalities become so gross that large sections of society simply cannot relate to each other anymore is not to be underestimated.
The old Swedish Prime minister Olof Palme once held a great speech talking about the horrible structure of power in the Soviet Union. He raged against how top Executives there made as much as 50x the average worker and how the extreme wealth disparity effectively made the lower classes into slaves. The Swedish workers would never accept such injustice!
At the time a Swedish executive made on average 12x the average industry salary.
Today it's 200x more.
Has the relative performance of executives versus workers really increased that much over 40 years? Of course not, if anything the average job today requires far more skill and education relative to the average job 40 years ago. But the way we have setup our society makes it so that the people who have money also have the power to decide who gets money. And go figure, they decided to give themselves, their children and their friends a larger share of societies' output, at the expense of everyone else.
|
|
|
|
|
|
EPT
