Donald Trump: wages are 'too high'

[Benton]

(11-14-2015, 12:21 AM)JustWinBaby Wrote: So eliminate the CEO and pay everyone a quarter more?  Ohhhh, you said "SENSE" not "CENTS".

Wait, let me check my math...the average F500 CEO made $13.5M in 2014 while the average worker made $36k.  So if we get rid of the CEO's....carry the 2....we can give all those F500 workers an extra $250 per year.  Gee, I guess my math was wrong - that's only 12 cents an hour.

uh... I think your math is off. If the company has 600 workers, that's around $20,000 a year, not $250 a year.

[JustWinBaby]

(11-14-2015, 06:08 PM)Benton Wrote: uh... I think your math is off. If the company has 600 workers, that's around $20,000 a year, not $250 a year.

uh, no, 500 CEO's at an average of $13.5M per CEO divided by 27 MILLION workers employed by the F500 = $250 a year per employee.

This is my problem with this debate - people don't understand math and just swallow the meme without question.

[Benton]

(11-14-2015, 06:24 PM)JustWinBaby Wrote: uh, no, 500 CEO's at an average of $13.5M per CEO divided by 27 MILLION workers employed by the F500 = $250 a year per employee.

This is my problem with this debate - people don't understand math and just swallow the meme without question.

ok.

[*Nately120*]

(11-14-2015, 06:24 PM)JustWinBaby Wrote: uh, no, 500 CEO's at an average of $13.5M per CEO divided by 27 MILLION workers employed by the F500 = $250 a year per employee.

This is my problem with this debate - people don't understand math and just swallow the meme without question.

My problem with this debate is that people are always comparing wages to each other when the real comparison (in my mind) is the wage vs. inflation.  Saying CEO's should make X number what average schmos make and that fast food workers should make a paramedic's wage minus X doesn't really address the economic issue.

But with anything people are more inclined to just start attacking each other rather than look at the underlying issues.

[JustWinBaby]

(11-14-2015, 06:38 PM)Benton Wrote: ok. You're going in two directions. One is one CEO but then you're dividing up that salary between all the employees from all 500 lumped together. None of the companies in the 500 has 24 million employees.

if you're talking all 500, then that's more than one CEO.

your math is off.

No.  I'm not going in two directions, this is EXACTLY how to quantify this bullshit issue you guys think is such a big part of the problem.  I mean, I assume you guys aren't actually trying to argue 1 CEO's salary is why tens of millions of people's wages have stagnated.

500 Fortune 500 CEO's making an AVERAGE of $13.5M....
  so divide $6.75B = the TOTAL comp paid to those 500 CEO's
  by 27M = the TOTAL number of people employed by those 500 companies

Now tell me what number your "math" gives you. 

[JustWinBaby]

(11-14-2015, 06:43 PM)Nately120 Wrote: My problem with this debate is that people are always comparing wages to each other when the real comparison (in my mind) is the wage vs. inflation.  Saying CEO's should make X number what average schmos make and that fast food workers should make a paramedic's wage minus X doesn't really address the economic issue.

But with anything people are more inclined to just start attacking each other rather than look at the underlying issues.

You're exactly right.  There's competition to pay CEO's, that's why they (and other mid/top managers) are getting increases.  Whether they deserve that or it's shareholders are getting what they pay for is another debate, but all it really illustrates is the too many global workers for too few global jobs (i.e. the lack of superior competitiveness of the American worker).  CEO pay really has nothing to do with wages of the average worker stagnating.

The main factors behind stagnant wages, in no particular order, as I see it are:
1) rising healthcare costs
2) globalization
3) lack of job creation (good jobs) in the US, and really all developed economies...significantly related to both #2 & #4
4) slowing population growth combined with aging demographics
5) mechanization/internet/disruptive technology

#2, #4 and #5 are the real culprits.   And you won't hear anyone talk about those much because no one has solutions.  I'm obviously a staunch supporter of free trade, but I think the reality is globalization has been a  much greater shock and transition than anticipated.  We really need to look at doing more to manage globalization, and that's likely beneficial to developing countries, as well.

And I think another area worth exploring is equity for the average worker.  The bulk of productivity gains are going to the shareholder because wages are competitive.  But that doesn't get us where we want.  I'm not sure what you do about #4, but the issue with #2 is we are importing a lot of goods (exporting our jobs and dollars in the process) and those developing countries simply don't have the buying power (yet) to balance that out with imported US goods and services.

#5 is the 800lb gorilla in the room. I don't see any way for good job creation to keep pace with the efficiencies being created - one accountant today with Excel and database software is doing the work 20 did in the 70's. Or look at payroll - used to be very large departments to check all those timecards and cut all those checks, and it's now almost completely automated for many companies.

I'm sorry if that reality is depressing.  It is.  But progress would be to stop falling for the bullshit and start demanding real solutions to the real problems.

[Benton]

(11-14-2015, 06:48 PM)JustWinBaby Wrote: No.  I'm not going in two directions, this is EXACTLY how to quantify this bullshit issue you guys think is such a big part of the problem.  I mean, I assume you guys aren't actually trying to argue 1 CEO's salary is why tens of millions of people's wages have stagnated.

500 Fortune 500 CEO's making an AVERAGE of $13.5M....
  so divide $6.75B = the TOTAL comp paid to those 500 CEO's
  by 27M = the TOTAL number of people employed by those 500 companies

Now tell me what number your "math" gives you. 

Man you get testy. You are correct on the math. Which is why two seconds after I hit post, I went back and edited it. I misread your post, thinking you were comparing one CEO salary to that of 24 million employees. 

I'm not sure who you mean by "you guys" but, personally, my issue with CEO salary isn't so much what the workers in the company make. It's the tax issue. Namely, companies that pay out millions to CEOs and upper management, but don't pay taxes the same way as smaller businesses.

[JustWinBaby]

(11-14-2015, 08:29 PM)Benton Wrote: It's the tax issue. Namely, companies that pay out millions to CEOs and upper management, but don't pay taxes the same way as smaller businesses.

That's fair, but it's a very mixed bag. 

I'd like to see more done with the tax code to incentivize higher line wages.  But nothing can really offset the forces I mentioned.

The top 1% earned like an average of $1.2M.  Even if we confiscate their top 2/3 = $800,000 on average or about $1.1T (not quite sure how that works out if you look at the individuals, probably a little less).

But we have to be revenue neutral, so shave 22% off that....call it $900B.  That's pretty healthy, about $5000 for everyone with a job.  A healthy 14% raise or so (on average), but it's well short of where we'd want to be and barely covers the deficit, much less eliminate many welfare benefits.  Keep in mind that $900B includes cap gains (which is why their effective rate averages only 22%), so that's where the money from your tax issues filters into.

Where should the average median household income be?  It's more or less stalled the past 30 years (although it looks much better when including benefits and wealth transfers)....BUT you're talking primarily two-income households vs. one.  So my $5000 above is a only fraction of what we've lost.

The last time we had real excess demand to drive up wages was 2004-2006 or so, but that was largely built on the financial house of cards.  There are real structural issues with the US and global economy driving all this.  And Japan was probably the first developed economy to start feeling it 25 years ago and they still haven't figured it out.

[Benton]

(11-14-2015, 09:07 PM)JustWinBaby Wrote: That's fair, but it's a very mixed bag. 

I'd like to see more done with the tax code to incentivize higher line wages.  But nothing can really offset the forces I mentioned.

The top 1% earned like an average of $1.2M.  Even if we confiscate their top 2/3 = $800,000 on average or about $1.1T (not quite sure how that works out if you look at the individuals, probably a little less).

But we have to be revenue neutral, so shave 22% off that....call it $900B.  That's pretty healthy, about $5000 for everyone with a job.  A healthy 14% raise or so (on average), but it's well short of where we'd want to be and barely covers the deficit, much less eliminate many welfare benefits.  Keep in mind that $900B includes cap gains (which is why their effective rate averages only 22%), so that's where the money from your tax issues filters into.

Where should the average median household income be?  It's more or less stalled the past 30 years (although it looks much better when including benefits and wealth transfers)....BUT you're talking primarily two-income households vs. one.  So my $5000 above is a only fraction of what we've lost.

The last time we had real excess demand to drive up wages was 2004-2006 or so, but that was largely built on the financial house of cards.  There are real structural issues with the US and global economy driving all this.  And Japan was probably the first developed economy to start feeling it 25 years ago and they still haven't figured it out.

I'll defer to you and matt and others for this kind of finance/tax issue.

for me, and its just my opinion based mostly off anecdotal information, goes back to the tax issue. I see a lot of state and federal intervention in big business. From tax incentives to land grants to reduced utility costs. The idea is is creates jobs and that in turn creates taxes.

but there's no nearly that kind of support for small businesses. Self employed or guys with 10-15 employees. And I think that's part of the difference between our economy now and our economies in the past. Outside of governments, there were very few "large employers" through history. Instead, there were mostly small employers, whether it was a trade or agriculture. They helped dictate the market and in turn markets generally didn't have massive disruptions outside of natural disasters or wars.

now it's the opposite of that. We've got a significant amount (about half if I remember right) large employers and markets can be significantly effected when one of the big players has a problem.

and I realize this is a simplified view of things. But basically, I think more small businesses would make stronger economies overall, albeit harder on the individual business.

[*Nately120*]

I'm no financial whiz, but the issue being inflation far surpassing wages may have something to do with our desire to spend gazillions on defense and corporate and poor-people welfare while at the same time refusing to elect politicians who want to raise taxes. We want to spend more and pay less, so we keep printing money and having more money out there is lowering the value of each dollar. Even people who think 100% that our giant military is the only thing between us and a fiery death don't want to pay high taxes, so I don't know what to make of it.

A silver quarter from 1962 has appreciated in value some 25 or so times while 25 cents of purchasing power from a zinc quarter (or whatever is in it) from 1963 has done nothing but depreciate. Our money is fake, and the issue is that we keep creating out of thin air to solve all our problems. Meh, what do I know? There is a decent chance our next president slashes taxes while erecting a zillion dollar wall and spending trillions to round up people who picking oranges and making tacos.

[JustWinBaby]

(11-14-2015, 10:42 PM)Benton Wrote: and I realize this is a simplified view of things. But basically, I think more small businesses would make stronger economies overall, albeit harder on the individual business.

Maybe.  Haven't really thought about it that way.  I don't know the numbers for small businesses of 15-20 people, but I feel like the sweet spot is more 200-300.  I don't think it makes the economy stronger - small businesses fail more often and can really struggle with less reserves and borrowing capacity to withstand downturns.  Although there is something to be said that 10 small companies can't each eliminate 1/10th a job, but consolidated into one company they could eliminate 1 job.  Again, however, you have to be able to eliminate that job to stay competitive globally.

The problem with large employers is there really isn't much local competition for wages, and so if you're unwilling to move there's not someone across the street capable of paying you more to put some upward pressure on wages. 

On the other hand, large employers are vital to our general global economic standing - at least if Ford puts a factory in China those profits accrue to shareholders here.  Sure, we'd prefer to build and export the car, but someone is going to build that factory in China so we might as well at least get a claim on the profits.

[Rotobeast]

(11-14-2015, 10:50 PM)Nately120 Wrote: I'm no financial whiz, but the issue being inflation far surpassing wages may have something to do with our desire to spend gazillions on defense and corporate and poor-people welfare while at the same time refusing to elect politicians who want to raise taxes.  We want to spend more and pay less, so we keep printing money and having more money out there is lowering the value of each dollar.  Even people who think 100% that our giant military is the only thing between us and a fiery death don't want to pay high taxes, so I don't know what to make of it.

A silver quarter from 1962 has appreciated in value some 25 or so times while 25 cents of purchasing power from a zinc quarter (or whatever is in it) from 1963 has done nothing but depreciate.  Our money is fake, and the issue is that we keep creating out of thin air to solve all our problems.  Meh, what do I know?  There is a decent chance our next president slashes taxes while erecting a zillion dollar wall and spending trillions to round up people who picking oranges and making tacos.

Composition of the quarter changed starting in 1965.
Sorry.... coin buff here.

[Benton]

(11-14-2015, 11:18 PM)JustWinBaby Wrote:
Maybe.  Haven't really thought about it that way.  I don't know the numbers for small businesses of 15-20 people, but I feel like the sweet spot is more 200-300.  I don't think it makes the economy stronger - small businesses fail more often and can really struggle with less reserves and borrowing capacity to withstand downturns.  Although there is something to be said that 10 small companies can't each eliminate 1/10th a job, but consolidated into one company they could eliminate 1 job.  Again, however, you have to be able to eliminate that job to stay competitive globally.
 

To the bold, I think the lower number would have a greater impact on the difference in wages from a basic human nature stand point. Someone who operates a business with 15-20 people knows his people better. He's more likely to know what they need (in terms of cost of living), what obstacles they face, if they're overskilled for the position he has them in, if they're underskilled and costing him money. If you'vr got 200-300, you aren't spending much time knowing what you have and don't have in each employee.

Management should take care of that, but that's hit or miss. You've got to have managers willing to run the business as if it were there own, but I think the number who actually do isn't that great. 

To the rest of the first graf, most industries can diversify to weather a downturn.

[*Wyche'sWarrior*]

(11-15-2015, 02:14 PM)Benton Wrote: To the bold, I think the lower number would have a greater impact on the difference in wages from a basic human nature stand point. Someone who operates a business with 15-20 people knows his people better. He's more likely to know what they need (in terms of cost of living), what obstacles they face, if they're overskilled for the position he has them in, if they're underskilled and costing him money. If you'vr got 200-300, you aren't spending much time knowing what you have and don't have in each employee.

Management should take care of that, but that's hit or miss. You've got to have managers willing to run the business as if it were there own, but I think the number who actually do isn't that great. 

To the rest of the first graf, most industries can diversify to weather a downturn.

I think what you've been hinting at is a pretty big part of it.  A friend and I were discussing this issue a year or so ago.  Look back at "the hey dey".....the 1950s.  One company built widget x , another built y , and another built z.  Then , a larger company with a big , recognizable name brand assembled xyz into a finished product and slapped their label on it.  Somewhere along the line , the larger companies bought out x y and z.  Some jobs were shaved off , but we were still ok overall.  Then, we began to "unlevel" the playing field by repealing the tariffs and taxes against products produced by sweat shop labor.  Soon ,  big multinational conglomerates were gobbling up those companies , outsourcing their workforces, and using tax shelters and loopholes to avoid reinvesting here and in our infrastructure.  Look no further than GE.  

Also , there was some sense of symblance of civic pride amongst those smaller entities than a profit at all costs menlity.  Just an opinion.....

[fredtoast]

Theoretically huge corporations should be more efficient. One payroll department per 100K emlpoyees instead of 100 payroll departments doing 1000 employees each. Same amount of market research for $1B in sales as $1M.

[JustWinBaby]

(11-15-2015, 02:14 PM)Benton Wrote: To the rest of the first graf, most industries can diversify to weather a downturn.

How are you going to be diversified with 15-20 people?  Some of your points have merit, but those are not strong, globally competitive companies.  They may find a local niche, but they're not likely to be particularly good at efficiency or quality or economies of scale, because those things actually require people, skilled people.  And I don't see any reason to think this is going to lead higher wages - I think the data shows pay is actually lower at such companies.

Essentially you're advocating to break up all the little departments/groups of a supervisor and his crew into separate businesses.  And you said the problem is they don't run those groups like a business, but it's also true they probably aren't skilled enough to run it as a standalone business or they'd be higher up in the food chain. And there's nothing stopping them from going on their own and starting that business. That is how many entrepreneurs get their start, but plenty of others either don't have the ability or the appetite for risk or simply can't earn as good of a living doing that.

The F500 employs about 20% of our workforce.  17% of employment is "very small" businesses (less than 20 people), and another 17% is "small" (20-100 people).  Another 14% is "medium" (100-500).  So there are plenty of small businesses.

[Benton]

(11-15-2015, 08:34 PM)JustWinBaby Wrote:  Essentially you're advocating to break up all the little departments/groups of a supervisor and his crew into separate businesses.  

Isn't that, by and large, the theory behind the benefit of outsourcing? That your company isn't efficient/proficient in an area, so you pay a company that does it better (cheaper) than you?