Stumbled across this article over on Politicalforum.com and was staggered by some of the figures.
Just wanted peoples thoughts on this, especially americans. Is it really as bad as this article makes it seem? That people are drowning in debt and basically working slave labor.
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
Is there social mobility left in the US for the poor and lower middle class?
[quote]whatever2k wrote:
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
[/quote]
I want to comment on more than just this, but I want to touch on this right off the bat.
This is, by far one of the most abused talking points. Let’s ignore the fact no one ever talk about how bad it is baseball players, actors and Oprah make that kind of money, just CEO’s.
Secondly, think about the situation. Most of those people work for public companies. What are people always complaining that public compainies are “too focused on”? Short term profits. Therefore, wouldn’t it be reasonable to conclude that these people are, in fact, very much worth this amount of pay and that everyone is actually benefitting from them making this much? Yes, it is reasonable to conclude that.
Makes for a good talking point, but when you boil it down, you are talking about institutions that are going to pay the least amount they can for a CEO, paying these people what they are paying them… With that being the case, let basic logic follow you though the rest.
I’m not even going to click the link. The bottom line is, many Americans are in debt because they CHOOSE to be in debt. No one makes us buy 73" TV’s on credit, we’re just dumb enough to do it.
As far as a CEO making 11K an hour, well they are responsible for the entire company where as the guy making $7.25 an hour has to empty the trash at night or flip a burger. I’d say one takes a bit more experience, skill, education, etc…than the other.
Yes it is that bad, but it is not attributed to pay. It is the debt that is the problem. People do not postpone gratification. I talk to people everyday that have $100k paying jobs, but have a 550 credit score. You have to work really hard to get a 550 credit score. They then have a $600k house and two car payments that cost them $1000-2000 a month.
Debt controls your ability to pay for the necessities. This is something the American People need to understand. It is not the investment debt, but the consumer debt that is killing people. If 40-80% of your pay is going to pay for debt service then how are you able to buy food. Why do you need an Iphone? If all you can afford is an old flip phone then get that.
I just paid off my truck last week. I now have $378 a month that I can do whatever I want with. I am going to save that $378 and buy another car cash in the future. People only look at the monthly payments. They do not calculate in the opportunity costs. If I use this $378 a month to buy a car then I can not go out with my buddies every weekend, or move from an apartment to a house.
[quote]countingbeans wrote:
[quote]whatever2k wrote:
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
[/quote]
I want to comment on more than just this, but I want to touch on this right off the bat.
This is, by far one of the most abused talking points. Let’s ignore the fact no one ever talk about how bad it is baseball players, actors and Oprah make that kind of money, just CEO’s.
Secondly, think about the situation. Most of those people work for public companies. What are people always complaining that public compainies are “too focused on”? Short term profits. Therefore, wouldn’t it be reasonable to conclude that these people are, in fact, very much worth this amount of pay and that everyone is actually benefitting from them making this much? Yes, it is reasonable to conclude that.
Makes for a good talking point, but when you boil it down, you are talking about institutions that are going to pay the least amount they can for a CEO, paying these people what they are paying them… With that being the case, let basic logic follow you though the rest.[/quote]
Fair enough and I agree that consolidation of wealth is natural as the economy grows. However the US has an extreme disparity between CEO and worker pay also when compared to other countries. Will A CEO really do a better job if he’s paid 80 million a year as opposed to 50?
I guess you could say the US has the largest and most successful international corporations so something is working in that regard.
[quote]dmaddox wrote:
Yes it is that bad, but it is not attributed to pay. It is the debt that is the problem. People do not postpone gratification. I talk to people everyday that have $100k paying jobs, but have a 550 credit score. You have to work really hard to get a 550 credit score. They then have a $600k house and two car payments that cost them $1000-2000 a month.
Debt controls your ability to pay for the necessities. This is something the American People need to understand. It is not the investment debt, but the consumer debt that is killing people. If 40-80% of your pay is going to pay for debt service then how are you able to buy food. Why do you need an Iphone? If all you can afford is an old flip phone then get that.
I just paid off my truck last week. I now have $378 a month that I can do whatever I want with. I am going to save that $378 and buy another car cash in the future. People only look at the monthly payments. They do not calculate in the opportunity costs. If I use this $378 a month to buy a car then I can not go out with my buddies every weekend, or move from an apartment to a house. [/quote]
Good point. People need to learn austerity for sure. However isnt it a fact that there are alot of people in the US who work very hard, maybe even severeal jobs, and still struggle to make ends meet? Would not an increased minimum wage help alleviate these people and make them less dependent on borrowing?
[quote]whatever2k wrote:
[quote]dmaddox wrote:
Yes it is that bad, but it is not attributed to pay. It is the debt that is the problem. People do not postpone gratification. I talk to people everyday that have $100k paying jobs, but have a 550 credit score. You have to work really hard to get a 550 credit score. They then have a $600k house and two car payments that cost them $1000-2000 a month.
Debt controls your ability to pay for the necessities. This is something the American People need to understand. It is not the investment debt, but the consumer debt that is killing people. If 40-80% of your pay is going to pay for debt service then how are you able to buy food. Why do you need an Iphone? If all you can afford is an old flip phone then get that.
I just paid off my truck last week. I now have $378 a month that I can do whatever I want with. I am going to save that $378 and buy another car cash in the future. People only look at the monthly payments. They do not calculate in the opportunity costs. If I use this $378 a month to buy a car then I can not go out with my buddies every weekend, or move from an apartment to a house. [/quote]
Good point. People need to learn austerity for sure. However isnt it a fact that there are alot of people in the US who work very hard, maybe even severeal jobs, and still struggle to make ends meet? Would not an increased minimum wage help alleviate these people and make them less dependent on borrowing?[/quote]
We have covered this in another thread. The minimum wage issue.
The poor people do not know how to manage money. When me and my wife only made $20k a year we saved money. Even if it was $100 a month. Poor people when they get $100 they buy expensive shoes, or $100 pair of jeans, something like that. When middle class people get $100 they put it in a savings account that pays them $0.50 a month. When rich people get $100 they invest it in something that pays them $10-$20 a month. This is really the biggest difference between the 3 classes. The rich do not get rich over night. There are some exceptions, but on the whole real wealth takes 3 generations to make, and only takes 1 generation to spend it all and make them poor again. It is a mindset that needs to be changed. We want everything now when it took our parents and grandparents an entire lifetime to acquire.
Why on average does a lottery winner takes 2-5 years to file bankruptcy. It is the mentality not the money.
[quote]whatever2k wrote:
Will A CEO really do a better job if he’s paid 80 million a year as opposed to 50?
[/quote]
I would imagine yes, they do, seeing as that is what they get paid.
You have to look at the formula to see the whole picture. These companies need to make profits, you don’t make profits by just willy-nilly paying people more than they are worth. Or even better, if you have two CEO prospects, one demands 100 million but projects to get you X in value, and one that demands 80 million but projects to give you 2X in return, everyone and their mother will hire the 80mil person.
People get paid as a function of the value they add. In the grand scheme of things, the guy digging the ditch is just as valuable as the CEO in that he performs a needed function. The difference becomes that hundreds of millions of people can dig a great ditch, but only a couple hundred thousand will be a great CEO.
[quote]whatever2k wrote:
Would not an increased minimum wage help alleviate these people and make them less dependent on borrowing?[/quote]
No, because without an increase in value somewhere along the line this just “puts the finger in the dyke” of a larger issue at play.
The larger issue being: “what is keeping these people in min wage positions for this long” and/or “why are people trying to make min wage a ‘livingwage’?”
[quote]countingbeans wrote:
[quote]whatever2k wrote:
Would not an increased minimum wage help alleviate these people and make them less dependent on borrowing?[/quote]
No, because without an increase in value somewhere along the line this just “puts the finger in the dyke” of a larger issue at play.
The larger issue being: “what is keeping these people in min wage positions for this long” and/or “why are people trying to make min wage a ‘livingwage’?”[/quote]
Exactly!! This bugs the hell out of me, I’m a skilled tradesman, my skill is what demands my pay. The guys making 7.50 or whatever have not tried to learn a trade, or go to school, or to have a resume worth a half a shit. I am 22 and get journeyman wages just by sticking with my work… A lot of my buddies took shit jobs after school and still owe student loans while making significantly less than me (I don’t have a degree).
I think it was Dmaddox who said we (Americans) suck at delaying gratification, so true. My buddies gave me hell for riding my mule or my bike to work to save on gas, but it saved me a fuckton of money. There are countless little examples like that, but in the long run they really add up.
[quote]whatever2k wrote:
Fair enough and I agree that consolidation of wealth is natural as the economy grows. However the US has an extreme disparity between CEO and worker pay also when compared to other countries. Will A CEO really do a better job if he’s paid 80 million a year as opposed to 50?
[/quote]
Typically, a CEO who made $80MM will have done so by increasing the stock price of the company thereby benefiting every shareholder. They may have a base salary of $3MM - $5MM but with options and grants, be able to make much more. If the stock price doesn’t go up, their options and grants may be worthless and any existing stock they own, worth less than they paid.
[quote]USMCpoolee wrote:
I think it was Dmaddox who said we (Americans) suck at delaying gratification, so true. My buddies gave me hell for riding my mule or my bike to work to save on gas, but it saved me a fuckton of money. There are countless little examples like that, but in the long run they really add up.[/quote]
Did you really ride a mule to work? That might be the coolest think I’ve read today.
How many miles do you get to a bale of hay?
[quote]Dr. Pangloss wrote:
[quote]USMCpoolee wrote:
I think it was Dmaddox who said we (Americans) suck at delaying gratification, so true. My buddies gave me hell for riding my mule or my bike to work to save on gas, but it saved me a fuckton of money. There are countless little examples like that, but in the long run they really add up.[/quote]
Did you really ride a mule to work? That might be the coolest think I’ve read today.
How many miles do you get to a bale of hay?
[/quote]
I rode my mule to work, ground tied her outside the grocery store, took her through the drive in at the bank… She was my wheels. I kept some hay around the job and I’ve got year around pastureland, so I didn’t go too far for hay.
[quote]countingbeans wrote:
[quote]whatever2k wrote:
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
[/quote]
I want to comment on more than just this, but I want to touch on this right off the bat.
This is, by far one of the most abused talking points. Let’s ignore the fact no one ever talk about how bad it is baseball players, actors and Oprah make that kind of money, just CEO’s.
Secondly, think about the situation. Most of those people work for public companies. What are people always complaining that public compainies are “too focused on”? Short term profits. Therefore, wouldn’t it be reasonable to conclude that these people are, in fact, very much worth this amount of pay and that everyone is actually benefitting from them making this much? Yes, it is reasonable to conclude that.
Makes for a good talking point, but when you boil it down, you are talking about institutions that are going to pay the least amount they can for a CEO, paying these people what they are paying them… With that being the case, let basic logic follow you though the rest.[/quote]
Think about the statement as it is? “Conclude that these people are, in fact, very much worth this amount of pay and that everyone is actually benefitting from them making this much? Yes, it is reasonable to conclude that.”
I don’t know that the statement makes sense in itself. I don’t see how you can ever say that anyone is overpaid or underpaid given this is just sort of a conclusion without any premises backing up the statement.
All I read is, “IF, people benefit from a person getting paid a certain amount, they deserve it.” I don’t see how slave wages are bad, so long as ‘people’ benefit in your analogy.
It fits perfectly with what happens, people at the bottom stay at the bottom and have little to no social mobility, so long as people at the top are raking in record profits (benefit) things are all good. So from the wealthy perspective it’s win win, laborer gets paid less so I get more, and I benefit. Typical psychopathic, but that’s how I just interpreted your post buddy.
I don’t agree. Maybe I painted it completely wrong, but that’s how it looks to me.
Also, a lot of the time when we talk about owners or powers, we are talking about corporate CEO’s not small business owners. And it goes right back to my analogy that we seem to agree with about parasitic enterprises, the sort that bring poverty to storefront locations and the comparison of Costco to Walmart.
If Costco is an indicator of how corporations can be non parasitic, then the whole argument is awash because they demonstrate there is room in CEO’s pockets and stock value to make room for the employee at the bottom, this way EVERYONE can walk away without feeling ripped off. Well, maybe except for the self important CEO. When he gets shorted, he might not be able to afford another summer home. When the middle class gets shorted, they may not be able to afford tuition for their children, when the poor get shorted, the kids go to work.
When kids go to work early without education, they trap themselves (most do) in the lower class.
This is the way I see the big picture. You as a business owner, small or medium are caught in the middle, and you are the most important type of puzzle piece in the game.
Not only do people need social mobility within corporations, but small businesses need financial mobility and stability amongst corporations (they are who you are competing with, and threatened of being eaten by). Right now the country isn’t as focuses on the latter, but it needs to be, because you are in competition with both corporate models (Walmart and Costco).
What still gets me is how you are so pro corporation. But I’m always interested to hear your point of view and where our fork in the road is, we usually see eye to eye on quite a few things.
[quote]countingbeans wrote:
[quote]whatever2k wrote:
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
[/quote]
This is, by far one of the most abused talking points. Let’s ignore the fact no one ever talk about how bad it is baseball players, actors and Oprah make that kind of money, just CEO’s.
[/quote]
Because these people do not play a significant role in setting employees wages and conditions. CEO’s do.
[quote]countingbeans wrote:
You have to look at the formula to see the whole picture. These companies need to make profits, you don’t make profits by just willy-nilly paying people more than they are worth.
[/quote]
Except of course pricing is incredibly complicated. I’ve had plenty of jobs over my career where I have been paid twice as much as others in my team for half the amount of work.
[quote]countingbeans wrote:
People get paid as a function of the value they add. In the grand scheme of things, the guy digging the ditch is just as valuable as the CEO in that he performs a needed function. The difference becomes that hundreds of millions of people can dig a great ditch, but only a couple hundred thousand will be a great CEO. [/quote]
It is a much worse situation than the one you describe. There are likely many millions of people who would make great CEOs. The problem is information asymmetry and the incredible risk that comes along with picking the wrong CEO.
Imagine if there were only 1,000 well known ditch diggers in the US. And that if you hired the wrong ditch digger tens of thousands of people would be out of work. These 1,000 ditch diggers might not be the best at digging ditches. Some might be downright lazy. But digging ditches is a necessary task. Somebody has to do it. Well these ditch diggers would be highly compensated. And it would be very difficult for someone to get the right kind of experience to become a ditch digger. But the amount of compensation would really be much more of a cultural issue than an issue of personal hard work and value personally being added (and this is typically what we see if we look at CEO compensation).
My take on this is that if you don’t like what your job pays - get a better one that pays more. People are in debt because of stupid decisions. You can’t make bad life decisions and expect a bail out over and over. America has lost its way. It used to be about working hard. Now its about free handouts, phones, food stamps, welfare, etc.
[quote]Severiano wrote:
Maybe I painted it completely wrong, but that’s how it looks to me. [/quote]
You did, but only because of your persepctive.
My point is: the people being paid this type of money have a certian skill very few people have. This makes them rare. Like certian presious metals or gems, they are worth more than people who don’t have these skills, in terms of wages. This doesn’t make them a good or bad person, just that they offer a skill to the market place that not many can, so they demand more pay.
Now these people are hired by companies who’s mission is to make profit by providing a product or service. This means they have to offer something consumers find valuable at a price they are willing to pay. This product or service cost money, expenses. The CEO’s pay is one of thos expenses. IN order to make profits, you will want to keep your expenses as low as possible. So it stands to reason these companies will pay the least amount they can get away with to get the talents the company needs, at all levels of the company. If someone at “the bottom” is getting “slave wages” then it onus is on them to learn a more marketable skill. It isn’t the companies responcibility to wipe every employees’ ass at the expense of the company, shareholders, customers and society at large.
Benefit happens when a company provides the product or service to consumers at a price that is worht the value added. Yes this benefits society as a whole. If WalMart doesn’t provide a benefit on the whole, people need to shop somewhere else. But until people stop spending money, in droves, at WalMart, it is reasonable to conclude WalMart, does in fact, provide a benefit to consumers at the very least.
I wouldn’t imagine we are all that far apart. I just hold the consumer and employee more responcible than you do.
Look at it this way:
Producers sit around and want to make Saving Private Ryan. They can hire Tom Hanks at 12 million, or Billy Joe Blanski at 200k to star in the film. Why do they chosse Hanks even though he is significantly more expensive (keep in mind, many people ‘on set’ are paid your same slave wages)? Talent and name reconition. Hanks gets a couple more asses in the seats than Blanksi does. No one ever has a problem with this, or paying $25 to go see a movie. But when the same basic model is applied to a CEO, that company becomes evil.
[quote]phaethon wrote:
[quote]countingbeans wrote:
[quote]whatever2k wrote:
A minimum wage of 7.25 while certain CEOs rakes in 11k an hour seems extreme.
[/quote]
This is, by far one of the most abused talking points. Let’s ignore the fact no one ever talk about how bad it is baseball players, actors and Oprah make that kind of money, just CEO’s.
[/quote]
Because these people do not play a significant role in setting employees wages and conditions. CEO’s do.[/quote]
Utter nonsense.
A baseball team has the same pool of resources HP does. Every dollar A-Rod gets is a dollar that can’t be paid to a grounds crew. Every dollar that Tom Cruise demands in a movie is a dollar a grip can’t be paid. Shit, ever dollar Joe Flaco demands is a dollar that can’t be spent on a rookie 3rd round role player that helps the team win. Of course they play a significant role, you just happen to be okay with their greed because they don’t wear a business suit to work.
[quote]phaethon wrote:
[quote]countingbeans wrote:
You have to look at the formula to see the whole picture. These companies need to make profits, you don’t make profits by just willy-nilly paying people more than they are worth.
[/quote]
Except of course pricing is incredibly complicated. I’ve had plenty of jobs over my career where I have been paid twice as much as others in my team for half the amount of work.[/quote]
Okay? Give money to charity then. Did you walk in an offer money back to your employer?
I don’t see how this is relevant to my statement.
This is basically the same arguement as:
I knew this one guy in highschool that could have been a Hall of Fame Hockey player, too bad he got that chick pregnant and didn’t go to college…
Fun to think about, but I doubt that if there is a talent pool of 1000, that any of them got there by mistake and happen stance.