Those unions watching out for their workers...

[SharonL]

The unions have made it hard on them for years - the truck carrying the products could not carry the twinkies (or any of the products) with the bread - they had to have seperate trucks - again more unions trying to show their power.

 

[TeddyReceptus]

The unions have made it hard on them for years - the truck carrying the products could not carry the twinkies (or any of the products) with the bread - they had to have seperate trucks - again more unions trying to show their power.

I don't know what you are talking about here but let's ask ourselves:

Why does it take a few examples of "union excess" to make us desire to dismantle the entire union system but billions of dollars can flow to a few people in executive positions and some people don't see ANYTHING excessive of that or worth "fixing"?

 

[mathetes123]

Gosh! That's such a great idea!

In America of the Future all people will be CEO's. If you can't become a CEO then you are a loser who deserves to live in squalor!

What a great idea!

That worked really, really well for France pre-1787! Those poor people should just have become French royalty! Why were they so weak and pathetic?

And it really worked out well for French Royalty.

I guess this whole "20th Century Experiment in Fairness" that we call America is just a blip on the radar screen. I'm so glad it's over.

The point is that the wages and benefits of the CEO's compared to those of labor is a function of supply and demand, just like everything else in a free market economy. Qualified Ceo's are in high demand and short supply, thus the greater increase in wages. There is a large supply of labor, especially unskilled labor, which is going to tend to drive labor rates down. Labor can close the gap by investing in education and skills that are In high demand and putting in the hours diligently working up the corporate ladder.

 

[TeddyReceptus]

The point is that the wages and benefits of the CEO's compared to those of labor is a function of supply and demand, just like everything else in a free market economy.

No, they are not.

CEO salaries are set by Boards of Directors (often CEO's themselves from different companies) and "Compensation Committees" (often people who will report to the CEO).

There is no rational market force that would wind up with a CEO making >300 times what the average worker gets, unless that CEO can do 300 times the work of a given worker, or can fit 300 times the amount of effort into an hour.

FURTHER, if CEO compensation were merely a "market" value then why do they:

1. Often have contractually obligated golden parachutes?
2. Often get bonuses even when the stock price of the company goes down?

Qualified Ceo's are in high demand and short supply, thus the greater increase in wages.

It is reasonable to pay someone at the top a good salary. But 300 times the salary of an average worker doesn't even make common sense.

There is a large supply of labor, especially unskilled labor

But we aren't just talking "unskilled labor". For instance it is highly unlikely the CEO of the company I work for could do even the simplest things I do in my job. Not that they should have to, but if the CEO is going to make 150-200 times my salary then the assessment must mean that my job is 200 times less valuable to the company.

if one extrapolates that to all the jobs the CEO cannot themselves do then the company collapses.

, which is going to tend to drive labor rates down. Labor can close the gap by investing in education and skills that are In high demand and putting in the hours diligently working up the corporate ladder.

What about those of us who have no interest in being a CEO? Do I HAVE to work up to the CEO level to be paid a fair wage? Do I have to want to be the CEO of my corporation to want to see rational pay rates for CEO's?

I probably have far more education than the CEO of the company I work for. I can do something my CEO can't, in fact I may be able to a couple things in my job that my CEO can't. Why do I make about 150 times less than the CEO does?

Because their skill set is different from mine does not make theirs technically more important than mine. If my CEO can easily replace me, a PhD scientist (knowing that my CEO probably himself doesn't have a PhD nor could probably even get one) then why can't we equally claim that I could replace the CEO instead? There are far more MBA's out there than PhD's.

This isn't a "free market" topic. It ceased to become one long ago.

 

[[serious]]

The unions have made it hard on them for years - the truck carrying the products could not carry the twinkies (or any of the products) with the bread - they had to have seperate trucks - again more unions trying to show their power.

I'm seeing twitter and and tea party sites which appear to be all based off of 2 sentences in a WSJ article from january:

Hostess has a trove of complex labor rules that the company deems inefficient, the people said. In some instances, work rules mandate that separate trucks must deliver bread and cake products, these people said. Sometimes separate workers must load the trucks and additional workers must make final deliveries once a truck arrives at a supermarket, they said.

Now, from those two sentences, it's clear that not all routes or drivers are held to that (key word: "some"). Now, if you're talking moving product from factory to distribution site, it seems like a reasonable streamlining procedure to load separate trucks for separate products provided you can fill both trucks. If you are talking about deliveries to local stores, yeah, that would get crazy. As far as the loading and unloading, when you have a busy loading dock, it isn't uncommon to have designated loaders/unloaders separate from drivers. From these two sentences, we don't have enough information to criticize the teamsters. If you have a source that provides further details on the exact cases in which these rules applied, please let me know though.

 

[CRAZY_CAT_WOMAN]

I couldn't tell really from the article but it appeared as though the major unions represented about 5,000 workers. Maybe there were smaller unions??

18,500 people out of work.

I'm hoping something can be done here to prevent this.

The workers made their choice. Now all the company needs to do is, sell their business, to a none union company and change their name, or just change there name and not allow unions in their business. They're back in business, with different employees. I see this all the time, where I live.

 

[MachZer0]

Income inequality is a problem only for people who think that wealth is gained at someone else's expense, that there is a static amount of money out there.

Income inequality is a code word for envy

 

[Steve Petersen]

Income inequality is a code word for envy

Behind it is the presumption that wealth is obtained illegitimately; this gives them the moral justification to take someone else's and dole it out to themselves.

 

[MachZer0]

Behind it is the presumption that wealth is obtained illegitimately; this gives them the moral justification to take someone else's and dole it out to themselves.

The law of supply and demand is overlooked regarding CEO's and salary. Nearly any CEO can drive a truck, but few truck drivers can run a company. Thus the disparity in salaries. Gold is more valuable than aluminum because it is more rare, even though Aluminum is more versatile than gold.

 

[Thekla]

Income inequality is a code word for envy

Could be, no doubt in some cases it is.

And the overvaluing of some could be a form of idolatry, and/or vanity.

 

[variant]

The law of supply and demand is overlooked regarding CEO's and salary. Nearly any CEO can drive a truck, but few truck drivers can run a company. Thus the disparity in salaries. Gold is more valuable than aluminum because it is more rare, even though Aluminum is more versatile than gold.

A difference in salary is definitely called for.

However there is no amount of inequity that some people will not defend.

 

[MachZer0]

Could be, no doubt in some cases it is.

And the overvaluing of some could be a form of idolatry, and/or vanity.

Define overvaluing

 

[variant]

Define overvaluing

I think a CEO's value has been overestimated when they are paid more than 300 times the average worker to run the business into the ground.

 

[TeddyReceptus]

The law of supply and demand is overlooked regarding CEO's and salary. Nearly any CEO can drive a truck, but few truck drivers can run a company

Couple points: not every job is "truck driving" (and even then a CEO is not guaranteed to be able to drive a truck, that actually is a skill), but as I gave the example earlier: I'm a PhD scientist. I work in a chemical lab. There are only a tiny fraction of Americans who have a PhD. The CEO of the company I work for only has an MBA. There are many, many more MBA's than PhD's. It requires many more years of work to get a PhD.

Why do I not make 150 times what the CEO of my company does? The CEO of the company I work for would actually probably hurt themselves in my work place before they'd be able to do any good, such is the nature of our different jobs.

AND, without the research scientists in the company the company would have a very tough time competing.

The CEO, without benefit of all the work we do, would be just another suit sitting in a big empty conference room.

. Thus the disparity in salaries. Gold is more valuable than aluminum because it is more rare, even though Aluminum is more versatile than gold.

So why would a PhD make much less than an MBA?

Seems your argument fails.

 

[Steve Petersen]

I think a CEO's value has been overestimated when they are paid more than 300 times the average worker to run the business into the ground.

Apparently the board of directors and shareholders don't share that concern.

 

[TeddyReceptus]

A difference in salary is definitely called for.

However there is no amount of inequity that some people will not defend.

This is the crux of the debate. You nailed it quite nicely. Just because there is a "value" in leadership that CEO's take upon themselves, it does not mean that value is "infinite".

Yes, a CEO has an important job, and they don't usually spend more than a few years at the top. So it would be nice if they got compensation in accord with some of the stress they undertake to do the job. But that compensation has actual limits.

Anyone who will simultaneously defend the concept of market economy and exhorbitant CEO salaries has lost touch with rational market forces.

There is no conception of the CEO job in which they "earn" several lifetimes worth of pay in one single year. (If anything an infantryman in the military on active duty "earns" a lifetime of pay in a year, but we don't pay them that, do we?)

 

[TeddyReceptus]

Apparently the board of directors and shareholders don't share that concern.

The salary of a CEO is set but the BOD (who are often CEO's themselves) and a Compensation Committee (usually people in the organization some of whom will ultimately report to the CEO).

As I understand it, the BOD doesn't always have to listen to the shareholders on this matter.

This so-called "Say on Pay" which gives Shareholders more input on executive compensation is relatively new and was given new life with Dodd-Frank only recently.

 

[Steve Petersen]

Floyd Mayweather made $85 million last year. Wanna do anything about his pay?

Tom Cruise: $26.5 million

 

[variant]

Apparently the board of directors and shareholders don't share that concern.

Right, it's their job to fill their pockets by leaning more and more on the people that work for them.

Since that was all they had they went out of business.

Don't worry about them though, since they couldn't reduce the pay of people that work for them to 25,000 a year they'll have to take solace in the massive pay raises and severance packages they voted for themselves.

I'll leave you to defend just how wonderful this system is, because I don't see it.

 

[variant]

Floyd Mayweather made $85 million last year. Wanna do anything about his pay?

Tom Cruise: $26.5 million

Behind it is the presumption that wealth is obtained illegitimately; this gives them the moral justification to take someone else's and dole it out to themselves.

Apparently the board of directors and shareholders don't share that concern.

The important thing here is that we never ask anything more in terms of taxation of people drawing so much compensation.

These people clearly have the best interests of the little guy in mind when they cut their wages in half over a period of ten years.