Improvement
Last night I thought I might be losing my 5th shift each week. Can’t keep doing Sunday mornings without getting a ride, until we have the car fixed or another one. This morning I got it back. Whew.
We’ve been having some really rough times in the US lately. Some idiots who want poor people to have nothing shut down the government for a couple weeks. And the other idiots waste their time calling me a tool of the left because I think people deserve better than we are getting under the current generation of robber barons.
It’s simple. The workers create the wealth. At certain times in our history, the company owners paid the workers a decent percentage of the wealth they created. During these times, the entire nation prospered, regardless of the tax rate on the company owners (sometimes as high as 60%, sometimes as low as 29%, but it’s below that now and there are lots of dodges that can make it 0%). The wealthy have figured out that they fund the government, and are trying to buy the government so they don’t have to fund so much. This leaves all the people who created their wealth, either as workers or consumers, with nothing. OK, just a little more than nothing. This is not a good economy.
If you disagree, stop reading. Shouldn’t bother too many, the most number of readers to this blog to date has been 10.
Hugs,
Me
Actually, wealth is created by the smart application of work. The smarts that get the workers doing the right thing is as important as the workers themselves, maybe more so.
Yeah, some companies are bloated with management. One manager for three workers, one uber-manager for every two line managers, etc. But lots of others have flat structures.
Yes, the fact that CEOs earn multiple hundreds (or thousands) of times as much as the median worker is a troubling symptom, but attacking that directly is something like treating rabies using aspirin to reduce the fever.
Part of the problem is that a lot of the ways people used to “pull themselves up by their bootstraps” have been closed off. Not by the big money, but by the established small businesses. People paying rent on a shop object to having other people on the street outside competing for business, so no more pushcarts, no more people with a cannister of “two cents plain” over their shoulder. To start a business, you need a business license. And various other bureaucratic bullshit.
Make it easier to start something new, and more people will do it. It’s not so much the big regulations as the small ones that get in the way.
Also to be considered: Microsoft has 99,000 employees. Steve Ballmer (CEO) gets about $1.3mil/year. If you reduced his salary to zero, you could give each employee a raise of $13/year. If the average employee doesn’t get enough, it’s not because Ballmer gets too much, it’s because the company needs a more efficient method of getting money.
Ford has 171,000 employees. The CEO gets $22mil. Reduce him to zero, and each employee gets a whole $129/year. Get the picture. It’s not that the people at the top of a big company get too much — their compensation has almost nothing to do with how much the average employee gets. It also has almost no effect on how much the shareholders get, for the same reason — many shareholders, one CEO.
Looking at Ford again: total revenue (sales): $134bil. The CEO got $22mil, or .01% of total sales. They spent $127 bil — I can’t quickly find out how much went to employees, how much for parts and supplies that they bought from elsewhere. They paid $2bil in taxes (out of $7bil in gross profit). That left a net income of $5.6bil., roughly $1.50 per share. They paid out 15cents/share in dividends. The rest was retained by the company — hopefully to invest in future growth. So the shareholders got (directly or indirectly) $1.50/share.
Aha! You say, its the filthy rich shareholders robbing the workers. Well, back to the numbers. Remember, the net profit was only $7bil out of $134bil in sales. That’s about 5%. Is that really too much for the owners of the company to take out? (Keeping in mind that the retained profits also benefit the workers and the suppliers.)
Besides, those “filthy rich shareholders” are mostly people who have bought Ford stock in the hope that it will eventually provide some money when they retire so they don’t have to live on just Social Security. The rest is owned by… retirement plans (pensions for employees of Ford and other companies) and by mutual funds. And whose money is invested in the mutual funds? Those retirement plans and individual investors who hope to retire on that money.
Let’s be progressive, but let’s also be real and look at the data available. I got those numbers from Ford’s annual report for 2012, https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&sqi=2&ved=0CEwQFjAC&url=http%3A%2F%2Fcorporate.ford.com%2Fdoc%2Far2012-2012%2520Annual%2520Report.pdf&ei=-wlgUvSdAaPgiALj6oHYBA&usg=AFQjCNHBSGIL0YRYBUDeVzwBo89s3m3N2w&sig2=mHaWX__-oh-sCjl6dMr7Iw&bvm=bv.54934254,d.cGE
You can do the same research yourself for any company you choose.
You are using the example of a union company. Try looking at, say, a major bank. The unions fight to get their fair share of the profits; non-union shops don’t have that ability.
Even so, most other “civilized” countries have limits on how much the CEO can make over his lowest-paid employee. And we also have the vulture bankers, who buy a troubled company, extract all the income, send it offshore and then either close it or send the jobs offshore.