Let's look at the Green New Deal being presented in Congress

whatbogsends · Feb 13, 2019

Hammster said:
Then it’s safe to say that companies pay employees wages that they think are in line with the tasks being performed.

No, companies pay employees wages the lowest amount they can get away with. The value of the task being performed has little bearing on the wage paid for executing that task.

Also, you didn't even try to answer my question.

Aldebaran · Feb 13, 2019

whatbogsends said:
No, companies pay employees wages the lowest amount they can get away with. The value of the task being performed has little bearing on the wage paid for executing that task.

What prevents those employees from seeking a job elsewhere where the pay is better?

Hammster · Feb 13, 2019

whatbogsends said:
No, companies pay employees wages the lowest amount they can get away with. The value of the task being performed has little bearing on the wage paid for executing that task.

Also, you didn't even try to answer my question.

What is the benefit to a company to overpay someone?

RocksInMyHead · Feb 13, 2019

Aldebaran said:
What prevents those employees from seeking a job elsewhere where the pay is better?

Nothing, assuming that they can find a place paying more. And get an interview. And get hired. Job mobility is actually pretty high these days though, and yet income inequality continues to increase. That's because while you personally might be making more at your new position, it's not any more than the person you're replacing made, and the person who replaces you isn't making any more than you did before.

RocksInMyHead · Feb 13, 2019

Hammster said:
What is the benefit to a company to overpay someone?

The benefits of paying your employees more mainly come from employee loyalty. If you pay your workers well, they are less likely to leave. That means you don't have to spend time and money training replacements every two years. It means that you can afford to get rid of bad employees because most of your employees are highly skilled and can take up the slack for the short period of time required to find a replacement (short because you pay well, so you will have many applicants). Skilled employees who like their jobs are better workers and more efficient, so they increase production without having to hire more people or expand facilities. They're more likely to innovate and try to add value to the company on their own initiative.

Whether or not that counts as "overpaying" depends on your views of business. If you as the employer get added value out of paying your workers more, then that's not necessarily overpaying, right?

Speedwell · Feb 13, 2019

Aldebaran said:
What prevents those employees from seeking a job elsewhere where the pay is better?

If it is always relatively easy for the employee to find an equal or better job elsewhere then this discussion is moot.

Hammster · Feb 13, 2019

RocksInMyHead said:
The benefits of paying your employees more mainly come from employee loyalty. If you pay your workers well, they are less likely to leave. That means you don't have to spend time and money training replacements every two years. It means that you can afford to get rid of bad employees because most of your employees are highly skilled and can take up the slack for the short period of time required to find a replacement (short because you pay well, so you will have many applicants). Skilled employees who like their jobs are better workers and more efficient, so they increase production without having to hire more people or expand facilities. They're more likely to innovate and try to add value to the company on their own initiative.

Whether or not that counts as "overpaying" depends on your views of business. If you as the employer get added value out of paying your workers more, then that's not necessarily overpaying, right?

That’s not overpaying, in my opinion. You stated a benefit to the company.

RocksInMyHead · Feb 13, 2019

Hammster said:
That’s not overpaying, in my opinion. You stated a benefit to the company.

If you're going to define overpaying as the point at which no benefit is derived for the company, why ask what the benefit to the company of overpaying is? And how do you know when you've reached that point?

Also, what was the point of your question? No one said that we should overpay employees.

Hammster · Feb 13, 2019

RocksInMyHead said:
If you're going to define overpaying as the point at which no benefit is derived for the company, why ask what the benefit to the company of overpaying is? And how do you know when you've reached that point?

Also, what was the point of your question? No one said that we should overpay employees.

It was based in this post.

whatbogsends said:
No, companies pay employees wages the lowest amount they can get away with. The value of the task being performed has little bearing on the wage paid for executing that task.

Also, you didn't even try to answer my question.

If companies pay people the lowest amount they can get away with, anything over that would be overpaying them.

Speedwell · Feb 13, 2019

Hammster said:
It was based in this post.

If companies pay people the lowest amount they can get away with, anything over that would be overpaying them.

And employees want the highest amount they can get. If there is a free market in labor, then the wage which results will generally be considered fair.

whatbogsends · Feb 13, 2019

Hammster said:
What is the benefit to a company to overpay someone?

And you still haven't even tried to answer my question.

RocksInMyHead · Feb 13, 2019

Hammster said:
If companies pay people the lowest amount they can get away with, anything over that would be overpaying them.

Why? You get what you pay for (to a point). Lets say you have two potential employees - one has asked for $40,000/year and one for $50,000/year. Under your logic, assuming both are qualified, only the one asking for $40,000/year would be the right choice - they can all do the job, after all. But the employee asking for $50,000 is more likely to stay longer, will probably be happier, and may have some additional skills that aren't necessary to the job, but still provide value. Paying him $50,000 would not necessarily be overpaying, even though you could get someone to do the job for $10,000 less.

There's also the issue of employees undervaluing themselves, especially at the entry level. People will sometimes take a lower salary than they should due to lack of research or desperation. Companies can and do prey on this, underpaying to pad their profits.

Hammster · Feb 13, 2019

Speedwell said:
And employees want the highest amount they can get. If there is a free market in labor, then the wage which results will generally be considered fair.

So how would you fix this problem?

GlabrousDory4 · Feb 13, 2019

Hammster said:
What is the benefit to a company to overpay someone?

Have you never heard of CEO's?

Hammster · Feb 13, 2019

RocksInMyHead said:
Why? You get what you pay for (to a point). Lets say you have two potential employees - one has asked for $40,000/year and one for $50,000/year. Under your logic, assuming both are qualified, only the one asking for $40,000/year would be the right choice - they can all do the job, after all. But the employee asking for $50,000 is more likely to stay longer, will probably be happier, and may have some additional skills that aren't necessary to the job, but still provide value. Paying him $50,000 would not necessarily be overpaying, even though you could get someone to do the job for $10,000 less.

There's also the issue of employees undervaluing themselves, especially at the entry level. People will sometimes take a lower salary than they should due to lack of research or desperation. Companies can and do prey on this, underpaying to pad their profits.

Again, though, the company sees the long-term benefit to paying the higher amount. So to them, it’s not overpaying.

Hammster · Feb 13, 2019

GlabrousDory4 said:
Have you never heard of CEO's?

That’s not an answer.

GlabrousDory4 · Feb 13, 2019

Aldebaran said:
What prevents those employees from seeking a job elsewhere where the pay is better?

PAY BENCHMARKING.

A lot of major corporations do this. They set the pay for given positions by comparing to competitors and how they pay their employees for similar jobs.

It is also a uniquely American thing to keep people from talking about their salary with each other. Most of the time it's something we're raised not to do, but sometimes it's actually against company policy. Keep people ignorant of the pay of their peers within the company and there is less possibility to know if one is being underpaid.

GlabrousDory4 · Feb 13, 2019

Hammster said:
That’s not an answer.

Yes it is.

CEO's are massively overpaid. Ever hear of "golden handshakes"? I once saw a CEO forced out of a company for violation of ethics and he still got his multimillion dollar pay-out.

I saw another CEO come into a company being paid millions upon millions of dollars and within about 6 months he'd cratered the stock prices by merely uttering some silliness about what he saw as the future of the company.

I once read an SEC filing that indicated that a new CEO they hired and moved from the Midwest to the West Coast and was being recompensed on the order of MILLIONS OF DOLLARS also had an entry in his contract that helped him pay his MORTGAGE because it was higher on the West Coast than it was in the Midwest.

CEO pay is set by COMPENSATION COMMITTEES made up of other CEO's. Interestingly enough American CEO's make many times more than European CEO's. Yet many European companies are as large or larger and more profitable than US corporations.

Hammster · Feb 13, 2019

GlabrousDory4 said:
Yes it is.

CEO's are massively overpaid. Ever hear of "golden handshakes"? I once saw a CEO forced out of a company for violation of ethics and he still got his multimillion dollar pay-out.

I saw another CEO come into a company being paid millions upon millions of dollars and within about 6 months he'd cratered the stock prices by merely uttering some silliness about what he saw as the future of the company.

I once read an SEC filing that indicated that a new CEO they hired and moved from the Midwest to the West Coast and was being recompensed on the order of MILLIONS OF DOLLARS also had an entry in his contract that helped him pay his MORTGAGE because it was higher on the West Coast than it was in the Midwest.

CEO pay is set by COMPENSATION COMMITTEES made up of other CEO's. Interestingly enough American CEO's make many times more than European CEO's. Yet many European companies are as large or larger and more profitable than US corporations.

So what’s the benefit to overpaying them?

RocksInMyHead · Feb 13, 2019

Hammster said:
Again, though, the company sees the long-term benefit to paying the higher amount. So to them, it’s not overpaying.

You seem to be conveniently defining overpaying as whatever you need it to be to suit your current post. First it's "the point at which no benefit is obtained," then it's "more than the minimum value they can get away with," and now we're back to the first one.

Let's look at the Green New Deal being presented in Congress

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Psalm 144:1

God is innocent; Noah built on a floodplain!

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God is innocent; Noah built on a floodplain!

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Psalm 144:1

God is innocent; Noah built on a floodplain!

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