Do they, though? McDonalds pays more in some locales nowadays, for work that's nowhere near as difficult or physically demanding. I'm sure it wouldn't totally break John Deere if they paid more for labor given that each tractor is like $300-400K, excluding support contracts.
Seems to me like this "union" is basically controlled opposition, kept in place to pacify the workers with whatever crumbs the management sweeps off the table. I'm sure they put on a good show for those union dues though.
I'm not sure of the legalities, but couldn't they independently organize and walk out en masse? Nominate (or, heck, even hire) a negotiator etc? It's pretty clear that what they have now isn't any good. $22 over 2000 hours is $44K pre-tax, of which some will be paid as taxes, and a good chunk (as much as 8-10K for a family of three, more with more kids) will disappear into the gaping maw of US "healthcare" system. That, to put it mildly, is insufficient by today's standards, with _real_ inflation clocking in at double digits. With inflation factored in, their union has effectively negotiated them a pay cut. That's supposed to be a "win"?
"Seizing" anything is not a good option. It'll just get people shot who don't deserve to be. But there are a million and one ways to put the screws to the corporate, especially if the workforce is already convinced to operate as a united front in negotiations.
Is McDonalds paying more in *same* locale? If so the offer will fail as people have other fallback jobs. Also you are assuming people will prefer McD jobs as they may require lower skill but may provide lower growth worse working conditions.
Ok, but please don't post unsubstantive comments to HN, or take HN threads on generic tangents, which tend to be predictable and boring (and usually turn nasty, in the end).
then they will relocate sections of the factory gradually. before you downvote, i'm not agreeing with this process but just stating what will happen next. a system that is maintained will always * look for ways to "optimize", think of any first job you had, remember how boring certain task were? or downtime? what did you do? you found something to do, most of the time it's some type of optimization. upper management will not be able to look at what is classically label as "inefficient" without going in there and "nudging" this or that part. i've experienced this first hand working in factories as an assembly line worker
So unions, and the labour movement generally, need to work on a national or international scale. In particular secondary action must be legal and a credible threat for companies that try to exploit their workers.
The state is always in service of the ruling class. This much is beyond evident in the U.S. as the semblance of democracy that took shape over the expansion of the American empire erodes.
And regardless, you would have to have a democracy, which is to say at minimum circumstances in which “a representative who favours a higher min. wage” could democratically run in the first place. The U.S. has nothing even close.
> then they will relocate sections of the factory gradually.
Then we will tariff farm equipment manufactured wherever they relocate to. Deere will find it hard to get politicians to be on their side on that sort of thing, if they don't have a domestic presence.
There's a reason why GM, Ford, etc, make cars in the United States - and it's not because they like dealing with UAW.
Shipping costs (cars are big) and exchange rates (buying components/labour in the same currency that you sell in reduces some pricing risk) are major considerations.
NAFTA/USMCA allows some manufacturing in Mexico/Canada (Which has largely equivalent labor costs), but if these manufacturers pulled out of the US, it would be repealed before you could blink.
Many "American" cars have been made in Canada since the beginning. In the beginning US automakers set up factories in Canada for export to Britain to take advantage of Canada being duty free as part of the empire. Then in 1965 the Auto Pact was signed which unified the US/Canada car market in exchange for American car factories in Canada. Since then Canada has produced ~10% of "American" cars, but has imported a similar number of American cars.
They sure will. And like Boeing, their once-impeccable reputation for quality will continue to slide into the mud. No worry, that's years from now. The execs responsible for the outsourcing will get hefty bonuses for the immediate savings, and retire happy.
There are two major manufacturing hubs in the world - east Asia and central Europe. Labor costs in manufacturing around the world have equalized to start at around $12/h. Slightly more in automotive. Average wage (whole economy) in Guangdong is ~$10/h. Labor cost in Poland is ~$13/h. The days of labor cost arbitrage are over
One can find cheaper labor, but it's always at the cost of worse infrastructure, missing supply chains or increased shipping costs. This is not pharma or silicon, where value per kilogram makes the cost of shipping is negligible. Manufacturing and assembly of heavy items like cars, trains or construction materials is nearly always near-shored
I might be wrong about this but it seems like foreign cars are an exception to this trend, specifically Japanese cars sold in the United States. Do you know what factors might be at play here?
Those are foreign designed but not necessarily foreign made. If you buy Honda Accord in the US, it is likely to com from a factory in Ohio. If you buy Toyota Corolla in EU, it is likely to come from factory in Turkey (or UK, but probably not anymore due to Brexit).
> then they will relocate sections of the factory gradually
In the late 1930s, Larry Page's grandfather participated in a sit down strike that helped consolidate the UAW. The grandfather auto worker made a decent union wage living and sent his son to college. The son became a professor, and his son founded Google and became a billionaire.
Meanwhile the textile mills in the Carolinas were mostly unorganized, and the post-WWII drive to organize them was defeated. And - the Carolinas still have a thriving textile industry today. No. The mills have almost all shut down and moved elsewhere. The industrial buildings serve as hipster like places for restaurants, apartments, boutiques etc. The southern textile workers never got their payday, they worked in the mills and the mills shut down.
Are you saying if the Carolina's textile mills organized in the 1930's the US would still have a thriving textile's industry?
I can assure you that wouldn't have been the case at all.
And keep in mind the US auto industry is not the world leader and hasn't been for 50+ years. UAW membership numbers have gone from >1.5M in 1980 to less than 300k today.
Yeah I worked as an engineer at a plant (different company) with ~400 union jobs. A year after a successful union contract negotiation, my plant was shuttered and the output sourced China. 7 years later, my friends that still work at the downstream plant say the quality is not near as good and they spend far more on re-work than they saved by shuttering the plant.
$20 for skilled labor in this industry seems very low. The bump to $22.13 when CEO gets a bump in the millions is really throwing the finger to workers everywhere.
The average worker is not special and easily replaceable, so workers as a whole organise for changes. The CEO's work is still more consequential, however. You can find new engineers and programmers but it'll be relatively hard to find good replacements for executives like Shotwell, Nadella, Huang, etc.
So you telling me if the people where united in a way that they will organize a strike against a specific company, that company will no longer exist? So workers does matter they just have to adapt to the mentality of strikes.
> No. CEOs are responsible for strategy, policy, and organisation.
I doubt that. In larger companies - the ones that actually have a CEO and not just a very hard working company owner - CEOs are usually pretty much isolated from any strategy, policy or organisation. For that they have upper management.
> One CEO
alone can do shit. A successful company needs competent workers, the right ideas from engineers and artists, diligent bureaucrats and most of all; a hell a lot of luck.
Given all that, even a company with a mediocre CEO can be vastly successful.
CEOs are mostly there for the handshakes and because they know people that know people. That's about it.
CEOs are very involved in strategy, especially when a company is going through a transition. A CEO that can properly navigate the business world through 'handshakes' is important too. Boards pay them lots for a reason. A good CEO is much harder to replace than a few engineers.
> The CEO's work is still more consequential, however.
Ah, I don't know about that. In the end what CEOs get payed for is to have someone to blame in case anything goes wrong. medicore performance never got a CEO fired, it's just when something goes terribly wrong that they have to take their hats.
> CEOs make important decisions about how a company is run and its future.
I've yet to work in a (large) company where the CEO is actually relevant. Most of the decisions happen at lower, departmental levels.
In the initial years, CEOs can make or break a company, but after that it's pretty random. You can have a brilliant CEO that just gets stumped and the company goes bust. Or you can have an incompetent CEO that just stumbles from success to success.
In my experience, CEOs get hired because of their old-boys networks that will allow the company to participate to the pay-to-play games with e.g. financial institutes or similar industry handshake-wink-wink-partnerships. They know people that know people, that's it.
If the board is incompetent, then the CEO will usually be incompetent too. A CEO doesn't make every decision for the company, just the important ones. A new CEO has great impact on a company's present and future unless the company is already organized to give /other executives/ most of his or her responsibilities.
At the companies I've worked at, lower levels never make far-reaching decisions for the company.
In all the companies I've worked at, never has a CEO made a decision that made a company successful. The best thing a CEO can do when it comes to decisions that make a company successful is one thing; recognize good ideas and get the hell out of the way of the people implementing that decision.
That's what incompetent CEOs usually do; they get in the way of competent people doing a heck of a job.
Good CEOs know that they are figureheads and try to stay out of the crucial decision making, handing off responsibilities to people that actually know what they are doing.
> In all the companies I've worked at, never has a CEO made a decision that made a company successful.
Hasn't been the case for me. Even if they didn't come up with, say, a market strategy, they're important in executing it. They lead rather than getting the hell out of the way.
>Good CEOs know that they are figureheads and try to stay out of the crucial decision making, handing off responsibilities to people that actually know what they are doing.
A good CEO makes critical decisions. Handing off responsibilities if they know their limits is indeed part of being a good CEO.
I know what they spend their time with; golfing and making sure their friends get a cut of the pay by doling out company contracts. Just as they get a delicious cut from their friends companies' contracts.
> we'll see how important that role is without any workers
We've known the answer to this question for decades: Very important. You can export entire factories to China, layoff everyone in manufacturing, keep management and design in country. Works just fine.
Don't believe me? How about this short list: Computing hardware. Hand tools. Medical equipment. Home appliances. Office supplies. Power tools. Etc.
What do they have in common? Offshore manufacturing.
The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well. I wonder why that has not been done yet...
Isn't that, what the CCP is doing: Xiaomi, Huawei, all the tooling companies which died completely in America ... They all do their own management and design. Seems that that split on the nice, lawless markets of our globe only profits few a short time (if you have a sufficiently ruthless and intelligent adversary who sees that he could split the spoils of the few between many...).
> The same logic applies to the management and design. There is no reason a cheaper workforce cannot do that as well.
This is definitely the case. There's a huge pool of talent outside of the US and Europe.
One of the mistakes people tend to make is this assumption that you can torture (being dramatic) capital and it will not react, it will just bend to the pressure. This is as wrong as can be. Capital is the easiest thing to move from place to place. And capital, with enough pressure, will always move where it can achieve the same outcome with a lower pain-in-the-ass factor.
Despite the popular indoctrinated meme, no, it isn't about greed. It's about getting shit done and staying in business.
Our "leaders" over the last 50 years or so, setup a perfect storm, a chain reaction, that is unavoidable for anyone in manufacturing save a few corner cases (military contractors being one category).
Say you manufactured coffee mugs. You are doing great. You have two other competitors with equal market shares. One of them decides they'll be smart, move manufacturing to China, lower their prices and grab more market share. They do the math: They are going to make LESS per unit, but think they can increase their market share to compensate for that, and more.
They come into the market with their new Chinese made line. You lose a bunch of market share. So does the other competitor. What do you do?
You can (1) lower your prices and operate at a loss; (2) lay off a bunch of people to reduce labor costs and use automation to lower your costs; (3) shut down the business and exit the market or (4) move your manufacturing to China.
That's it. There might be other options which are generally combinations of the four options given above. You move you manufacturing to China. A few months later, the remining competitor does the same.
A year later all three companies are manufacturing in China. They all have about the same market share they had before the move. They are all selling at lower retail price point, which means they are all making less money!
Oh, it doesn't end there. A few years later the same Chinese manufacture that makes their coffee mugs decides to sell directly in the US at a lower price. One of the advantages they have is that our "leaders" signed a treaty that makes shipping within the US free for any Chinese product (within certain limits). A Chinese company can get a product from Los Angeles to NYC for virtually free. A US company has to pay full rate for the same shipping.
Two out of the three companies go out of business and even more people lose their jobs.
> I wonder why that has not been done yet...
Oh, it has. Virtually every discipline you can think of has been offshored. From accounting to software engineering and more.
I have a quick personal example I can share: We needed to do a bunch of accounting analysis that required a bunch of data entry. Our accounting firm wanted somewhere in the order of $50K to get it done. We got it done by a team of business students in Romania for about a tenth of that. For security/privacy all we had to do was write code to redact (black out) private information (names, addresses, account numbers, etc.) on the thousands of documents they processed. This work required knowledgeable human analysis, so it wasn't a simple matter of OCR -> Excel -> summarize.
Capital always tends to find the most efficient way to get things done.
Except in government. In that case, assume half is wasted and that's probably about the right domain.
I've managed people, I knew how to do their jobs in addition to my own, or at least enough about their jobs to know what questions to ask about them.
I've often posited that many issues at large companies would be solved if the VP and SVP level folks were down doing the 'grunt' level work from time to time - like your VP of customer care should be on the phones one day a quarter, your VP of manufacturing should work the line once a quarter and so on.
It's pretty easy to say from on high "well, how hard can it be, they don't deserve that much!" when you've never done the work - it's a whole lot harder if you have and do from time to time. The CEO, needs to be on the floor, and needs to understand every aspect of how the company does business, if not that (like for very large companies like GE and Tyco), at a minimum the division president level does.
Being a CEO is more than just sitting in an office making strategic decisions, it's also having enough of a fundamental understanding of how your business works to know when you're being fed bullshit - you only get that by going out there and doing.
Is it, really, actually more important? Or do the CEO and board of like-minded folks who are executives at adjacent companies merely have more direct control over who gets the money? Because without the folks who actually make the tractors, the company quickly loses its primary source of income. What's the CEO's actual value-add?
I see this attitude a lot among younger workers with technical expertise.
“How hard is running a company? Making “X” is what’s hard.”
They then point to the fact they are at the top of their game and an expert and have a post-graduate degree. Their job is very hard and they are very skilled, no doubt.
But once you get exposed to upper management you start to realize it’s really hard to get a large group of people to work towards a common goal. Stuff goes off the rails very easily when people don't understand, care of even know what the company is trying to accomplish and how that relates to their job. And convincing outside investors (public or private) that your business is actually worthwhile investing in and in "capable hands" isn't easy either.
Yes, giving speeches and making “best guesses” on where the business is going seem trivial. But it’s a critical role where if not done well shit falls apart quickly. Remember, some hedge fund doesn't want to know the intricacies of your CPU design - they want to know your company has a product people want and you can deliver it to them profitably. There is a definite "we trust this guy can deliver" filter when it comes to CEOs and it's often based on track record (fairly or not).
Look at Elon Musk. What is his value? Knowledge of rocket design? Knowledge of battery technology? Though I hear he’s technical his knowledge is trivial compared to the experts he hires. The depth of his expertise is likely asking his engineers which is best, asking some pointed questions and then making a call on the totality of everything at stake.
His value is also in being “the face” of Tesla internally and externally. Motivating his employees with a vision when everyone is betting the company will fail. Convincing people they can do something no one has done before. Very few people can do that well and even fewer can do it for years like Musk did.
Now of course very few CEOs are like that, but don’t underestimate the value of CEOs who successfully run even a small business. Those soft skills many technical people think are useless are critical and not many have them in one package.
As such, if you've demonstrated you have the chops to run a billion dollar business you can ask for (and will get) a pay package that dwarfs a typical job.
And of course you have grifter CEOs who are idiots, but say the right thing. No different than any other job. They don’t tend to last very long as CEOs either.
Having been exposed to upper management in different sectors, most of what you're saying is hyper-inflated, and can be distilled into one singular category: communication. Helping people understand their fit, describing a common or specific goal, convincing investors, giving speeches and reassurances to technologically ignorant people, maintaining a veil of trust in some...thing, is just simply communication. And probably a fair amount of psychopathy, at least in some cases.
What this event in particular shows, and will likely continue at other organizations, is that absurd executive pay is absurd, and workers that are underpaid or given inequitable compensation for their work can demonstrably cease operations. The company does not hinge on a single CEO. The inequality is despicable, and the amount of paragraphs here defending that gap is beyond strange, at least from a hacker perspective.
And yes, of course, there are CEOs that are idiots. There are also moderately capable CEOs that surround themselves with idiots to insulate themselves from criticisms like "do you really need a $2MM raise?"
If you'll read more carefully, you'll note that I didn't say that making tractors is "hard." I said that it's the core business. You get what you pay for. CEOs that pay themselves fantastically high wages, while skimping on their workers, get low-quality results and short-term personal gain at cost to the long-term survival of the company. They demand loyalty from the workers (who often love the company they work for, despite the bullshit from up top), but they're only looking out for number one.
I'm not saying that all CEOs are like this, and I've known some incredibly dedicated founder/CEOs who truly bust their asses for the company. But charcircuit's insistence that it's the CEOs who actually make the business work ignores the other 99.9% of the people at the company doing back-breaking work, work the actual overtime, and don't get first-class (or private) flights to go play golf on the company dime. The fact that these people can be replaced is irrelevant. Treat them as disposable, and the company suffers. Underpay them and the economy suffers.
Much more important? Most just let the process self optimize and look for shaddy short term bump deals. That job could be done better by a smart contract.
This is the nonsense that the CEO "union" of cross shareholding and executives serving on other boards leads to.
The CEO sets the overall business strategy with the advice of the board. They then have to delegate that strategy to their subordinates for the different activities necessary.
It's harder to find skilled workers with specific skills than it is to find a generic "CEO".
it is hard to find people capable of running such a large company
The current CEO is paid $15m, and is currently responsible for the biggest strike in the company's history, an expensive settlement, and a huge number of unhappy customers who complain that they can't mend their tractors themselves to the point where the government has considered passing laws to ensure they can.
Is it really so hard to find someone who'd do a better job than that for less money?
The CEO and the workers are not in competition with each other for similar jobs. Their pay is not at all connected in any way what so ever. Each person's pay is determined by what the market rate is.
The politicians in Washington have convinced everyone that we should blame CEOs for the fact that our representatives have done a terrible job of maintaining a stable competitive market for low wage earners. The problem isn't that there are too many CEOs. There are too few. The problem with John Deere isn't it's success, but more specifically it's success at forcing others out of the market.
When there are only 2 big employers in your town, guess what? You're going to make whatever they hell they want to pay you.
> Their pay is not at all connected in any way what so ever.
This is so false that I have trouble believing you are serious. All pay comes from a fixed source, "income", and the CEO/board is largely who determines how the CEO and workers split up the money.
When an employee is hired they get a contract. Everyone is paid based on that. Which is usually determined by a market rate. What are you talking about?
At a company that size, it’s typically based on how well they are filling their pipeline of candidates. Difficulty finding people pressures pay to rise (this is the pressure UAW is exploiting.) They also conduct salary studies and survey employees to figure out if they’re satisfied by their pay. So while there may temporarily be a pay schedule, it’s constantly revised. In a large company there are many roles and schedules so at any point, many are somewhere in the process of changing.
The UAW situation is different. Unions negotiate contracts that affect all employees. These are set by the ability of the union and management to negotiate, with some pressure from market rates. These are closer to the “stone tablet” idea of yours, but only fixed until the next negotiation.
There is no ‘dividing up the income’ activity, like the other user suggested. Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue.
This is a simple explanation that elides a lot of detail, but hopefully helps.
Yes, I tried to distinguish between market research and market pressure setting prices and the more negotiation-based process of a large unionized employer.
The value is 'divided' between customers, suppliers, employees, executives and investors and it will go to who has the most power.
If the power balance means they can charge higher prices (less surplus to customers), then that money will go to the remaining parties. If suppliers are commodity, then it's a 3 way fight between execs, employees and investors.
If the company sees increasing sales and is flush with cash, the execs and workers will try to negotiate for higher pay.
"Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue."
It’s a useful mental model to picture the contributions of all these parties, and it can serve some indirect value as a framing in overt negotiations, but it’s not an actual process.
The same way all commodity pricing is determined - when you don’t get enough of what you want, you pay more, or go somewhere there’s more supply.
A “better” CEO would surely minimize labor expenses, by automating, moving to cheaper regions, etc. In most businesses, labor is the largest expenditure.
By the Gods of demand and supply adjusted by God of minimum wages. No matter how much mgmt question it they'll not be able to pay 10$/hr unless someone is ready to work at that rate and if allowed by the govt.
There it is. Straight to the divine, external undiscusable, holy forces decided that. It's folly to ponder God's wisdom, the discussion has ended, because there never can be one.
The market rate is determined by what employees are willing to accept vs what employers can get away with offering. The employees just demonstrated that they're no longer willing to accept what they are currently getting. The market rate just went up, I'd say.
Employers threaten employees with a loss of their livelihood. Employees threaten employers with a loss of business.
The decided upon rate is determined by the outcome of this struggle.
That's how the market rate sausage is made. It's not an impersonal objective arbiter of truth. It's a reflection of relative levels of power and relative levels of desperation.
There's a market rate dictated by supply and demand for labor.
In some lines of business you can overpay and do ok. But imagine a restaurant paying double the wage of one next door. Likely this reflects through into pricing and makes them non-competitive/prone to failure, as restaurants are low margin businesses.
The US has had a large surplus of low skilled labor for the past few decades, thus low bargaining power. There's a pretty obvious reason why, but I'll leave it for you to guess.
Yes, but CEOs arent in charge of how much they make. Labour is priced by the market. Prices aren't "decided" by anyone -- this is just something newspapers rant about to create outrage.
The market is an idealized abstraction, not a real thing that exists. CEO pay is decided by Boards of Directors, which CEOs tend to be on, and which are part of a narrow, highly connected class that CEOs are also members of.
> Prices aren't "decided" by anyone
Yes, the prices that a firm will offer for particular work are decided by particular decision-makers at the firm, not abstract outside forces. The market is a model of the the aggregate of factors influencing the decisions those people make, and the decisions employees make about accepting work.
The firm decides whether to hire at a price the CEO asks; not what to pay. There is maybe a percentage of leeway, but not a lot.
A salary is just what it costs to retain your employment -- that's it. When you can find higher pay elsewhere, eventually you will take the offer. Companies arent donating money.
CEO pay has only become significant in recent years because of equity, ie., CEOs since the 80s have increasingly been paid in shares. That is where the disparaity comes from.
Since the CEOs job is largely to focus on the share price -- do you see why giving them lots of equity is exactly the sensible thing to do?
The CEOs job is not to focus on the share price. It's to focus on the business being profitable and successful. The resulting share price is a side effect, not a goal.
Having a high share price is a secondary indicator of expected revenue, growth, and profit.
Giving CEOs equity is exactly the wrong sort of incentive, because it provides opportunities of massaging the expected long term results to achieve short term price variations in the favor of the CEO.
The company is owned by its shareholders who vote on issues such as CEO pay and the board compensation.
The business being "profitable and successful" is the objective of its owners because they want a return on their investment. It is the objective of the CEO only insofar as that is what they are hired to do.
CEOs are given equity to align their incentives with the company owners.
Im not sure who you think is hiring CEOs or why, but it isn't someone with an idealistic sense of "success". The CEO is given their mandate by the company investors.
CEO compensation and company performance are not correlated, there's an abundance of studies about that available. If we accept the axiom that their compensation is based on rational decisions of market participatents, what do they decide CEO compensation on, if not company performance?
Can't we describe the reality better if we accept that the "labor market" as an analogy to e.g. a potato market or washing machine market is a faulty model?
Are any salaries correlated with company performance?
Salaries are determined by the market price for that labour; meaning if you want to hire Alice to be your CEO you are bidding against others who also want Alice. The price is what Alice will take to work for you, and not another company.
That is essentially how all salaries are set. There is no mystery.
The public steadfastly refuse to believe in anything other than a mythological-moral meaning to prices. It is absolutely bizarre. Prices arent set by anyone and have no moral significance. (All this stuff about tech "scalping" given shortages is likewise the same fallacy. )
Since CEO compensation tends to have a very large component of equity, saying "CEO compensation and company performance are not correlated" is clearly not true.
The market is made up of people. Including people who look at the pay rise the CEO is getting and are willi g to strike until they get piece of the pie.
The market isn't a seamless black box that spits out price signals. It is people.
That might be true if we had a perfect market, but that does not exist. In particular the board who decides the CEO salary is disproportionately made up from other CEOs and upper management. They have a self interest in keeping CEO salaries high. Moreover many also like to inflate the importance of upper management on company performance (which we see at every management level), which again leads to higher salaries. Finally, often CEO pay is regarded as a status symbol, which essentially completely disconnects it from market considerations
One’s willingness to stick around determines the split. If workers in a given job will work for $x, there is no need to pay more.
You know this is true as you are watching a situation where workers will no longer work for $x play out.
The difficulty in keeping one job filled is not dependent on another job. The difficulty in hiring a janitor does not impact the difficulty of hiring a software developer.
If you set the CEO pay to zero and gave it to all the workers it would amount to a microscopic raise, and presumably wouldn't make the company any better run.
CEO salary / number of workers / number of working hours in a year =
14.75 million / 70k / 2080 = $0.10
Yes, that would be a stupid way to raise wages. I guess I assumed I didn't need to explain that I'm not suggesting a contract that literally says to only divvy up the CEO's salary. This is the most pedantic response to anything I think I've ever read.
The point is the amount of compensation you could give to workers from reducing CEO pay is insignificant when you divide it by the number of workers, even if you imagine an unrealistically extreme reduction in CEO pay.
On the other hand if you cut the entire c-suite, other board members and top management in half there is a significant amount. Usually with companies this size there are many mini CEOs in divisions and it starts to add up.
I think you'll get a better discussion (if that's what you're after) if you tell us exactly what you're suggesting instead of what you're not suggesting. The idea of negotiating better contacts for workers is not a novel one, you're not breaking any ground there. So how, exactly, does that happen?
No ground is being broken in this comment section whatsoever, and I'm not in a position to break any ground either even if I sit for a while and think really hard (...fuck).
But to contribute what I suggest (again, without breaking ground): capitalists take 30% of all income generated, for themselves. I haven't looked up the financials for John Deere, but I mean that's the ratio when you take the U.S. as a whole. That 30% is a wayyyy bigger piece of the pie than divying up a CEO's income, which is probably a tiny part of that (on average) 30%.
Let's run the numbers again for a thought experiment:
- $15600000 CEO compensation [0]
- 69600 workers [1]
- 1760 hours average per US worker per year [2]
- $20.12 hourly wage for the lowest paid John Deere employees
$0.13/hour, 0.6%, or a bit over a dollar a day increase for the lowest paid group. That would be the increase if the JD CEO would work for $1, with all his previous pay evenly distributed to all employees. Not insignificant.
Now let's have a slightly different thought experiment. What if the CEO pay is cut by 50%, and evenly distributed only to the bottom 10%? A $0.64/hour, 3.2% or $5.09/day increase. That would be a very significant number to all involved.
I'm not saying this is what should happen or not. Just saying the number is significant.
Usually the lowest paid workers make up a significant percentage, not 10%, so raising pay for only 10% of workers doesn’t make sense. Of course you can run another experiment that distributes CEO salary to the lowest 0.1% and see an even more significant raise; that doesn’t mean anything.
To add on your point, the people I know on low pay really care about what seems like a small pay rise e.g. $20 to $20.50. This makes sense because after living expenses a worker is left with say $40 discretionary money to spend, yet a $0.50 pay rise increases the worker’s discretionary spending by 50% (for this example).
When you are financially struggling, a 10¢ raise (extra $4 for the week) can make a big difference.
One of my friends worked 40 hours and had $20 to spend on herself after her bills (which were frugal, since she didn’t earn much). Low pay sucks when you earn a discretionary $0.50 for every hour of work.
> Each person's pay is determined by what the market rate is.
As long as people are effectively forced to work under even the most exploitative conditions, the market rate is going to be depressed by desperation. The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition!
That is why the COVID relief packages were able to overturn the market - they allowed people to leave their old jobs (if they still existed, that is) and search for new, better employment without the pressure of starving as somewhat around 60-70% of Americans, under normal conditions, would not have saved enough money to cover even a single week of unemployment.
>The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition!
That safety net is called your savings account. I could live off my savings alone for years before I find another job.
I don't blame the CEOs, or their pay for that matter, I blame a system in which if a CEO goes home, s/he can spend one year golfing and the following one choosing among the offers from his/hers golfing friends, while if a worker becomes unemployed, s/he could starve within one month while having no way to find a new job.
The big difference is that the CEO has no idea what to do with his money except invest it into a stagnant economy whose consumer market is failing to grow because every CEO pays their workers poorly. In other words, giving the CEO money is a sign of an inefficient market.
Some blame lies at the feet of CEO's. Some at the feet of the government.
When large corporations fail, they socialize their failures by getting bailouts from the government. There are never bailouts for individuals. Whenever a corporation has extra capital, they do things like buy back stock, rarely ever give it to employees, it simply isn't profitable for them to do so. These are choices a CEO makes in running their company.
The government allows for a bit much capitalism when it comes to health care, in my opinion. The added costs for health care are commonly thrust onto all employees, those at the bottom of the pay scale are impacted the most because they make the least. An out of pocket health care expense for a CEO is a rounding error but can be financially devastating to the lowest paid person that has coverage.
I get that they are different jobs. For example if there were a software error in a JD tractor that caused many deaths (i.e. some safety feature fails) its more likely a CEO/CxO would have to step down for mis-managing something than a bunch of factory workers.
In general, the pay differences are really out of whack though.
This comes after they tried to use unskilled labor (office personnel) to replace their skilled workers during the strike and about everything that could have gone wrong did.
It’s striking to me how labor movements have seem to thrive after global conflicts. In the years that follow war, famine, and plague the power of organized labor grows, and it wanes during sustained periods of relative abundance. It seems like a case of simple supply and demand, ie a smaller workforce can command higher wages. However the effect seems a lot more pronounced than the raw numbers would dictate. For example the US lost 0.3% of its population to WW2.
> During the 15 years from 1947 to 1962, the real
hourly earnings of production or nonsupervisory
workers in the private nonfarm economy, adjusted
for overtime (in manufacturing only) and for interin-
dustry employment shifts, increased at an average
rate of 2.5 percent annually; the advance during the
14-year period from 1962 to 1976 averaged only 1.2
percent annually.
The pandemic has taken 0.2% of US population thus far, yet wage growth is nearly 5% in the past 12 months, significantly outpacing inflation.
~50 years of relative peace and prosperity resulted in wage stagnation for workers. The death of organized labor was lamented, and many households struggled to keep pace with rising expenses.
It’s as if there is a threshold of labor availability below which there is a dramatic increase in upward wage pressure. The threat of production not meeting sales demand is a powerful one.
130 comments
[ 4.5 ms ] story [ 180 ms ] threadSeems to me like this "union" is basically controlled opposition, kept in place to pacify the workers with whatever crumbs the management sweeps off the table. I'm sure they put on a good show for those union dues though.
unions are there because the alternatives are usually far more violent and messy, looking at the history of the labour movement.
"Seizing" anything is not a good option. It'll just get people shot who don't deserve to be. But there are a million and one ways to put the screws to the corporate, especially if the workforce is already convinced to operate as a united front in negotiations.
Congratulations, you've invented the union.
https://news.ycombinator.com/newsguidelines.html
(p.s. This moderation comment is purely about HN and doesn't imply anything about the topic.)
And regardless, you would have to have a democracy, which is to say at minimum circumstances in which “a representative who favours a higher min. wage” could democratically run in the first place. The U.S. has nothing even close.
Then we will tariff farm equipment manufactured wherever they relocate to. Deere will find it hard to get politicians to be on their side on that sort of thing, if they don't have a domestic presence.
There's a reason why GM, Ford, etc, make cars in the United States - and it's not because they like dealing with UAW.
>There's a reason why GM, Ford, etc, make cars in the United States ...
Is that even true after NAFTA/USMCA?
There are two major manufacturing hubs in the world - east Asia and central Europe. Labor costs in manufacturing around the world have equalized to start at around $12/h. Slightly more in automotive. Average wage (whole economy) in Guangdong is ~$10/h. Labor cost in Poland is ~$13/h. The days of labor cost arbitrage are over
One can find cheaper labor, but it's always at the cost of worse infrastructure, missing supply chains or increased shipping costs. This is not pharma or silicon, where value per kilogram makes the cost of shipping is negligible. Manufacturing and assembly of heavy items like cars, trains or construction materials is nearly always near-shored
In the late 1930s, Larry Page's grandfather participated in a sit down strike that helped consolidate the UAW. The grandfather auto worker made a decent union wage living and sent his son to college. The son became a professor, and his son founded Google and became a billionaire.
Meanwhile the textile mills in the Carolinas were mostly unorganized, and the post-WWII drive to organize them was defeated. And - the Carolinas still have a thriving textile industry today. No. The mills have almost all shut down and moved elsewhere. The industrial buildings serve as hipster like places for restaurants, apartments, boutiques etc. The southern textile workers never got their payday, they worked in the mills and the mills shut down.
I can assure you that wouldn't have been the case at all.
And keep in mind the US auto industry is not the world leader and hasn't been for 50+ years. UAW membership numbers have gone from >1.5M in 1980 to less than 300k today.
I doubt that. In larger companies - the ones that actually have a CEO and not just a very hard working company owner - CEOs are usually pretty much isolated from any strategy, policy or organisation. For that they have upper management.
> One CEO
alone can do shit. A successful company needs competent workers, the right ideas from engineers and artists, diligent bureaucrats and most of all; a hell a lot of luck.
Given all that, even a company with a mediocre CEO can be vastly successful.
CEOs are mostly there for the handshakes and because they know people that know people. That's about it.
Ah, I don't know about that. In the end what CEOs get payed for is to have someone to blame in case anything goes wrong. medicore performance never got a CEO fired, it's just when something goes terribly wrong that they have to take their hats.
Usually there's a golden parachute attached.
CEOs are overrated.
I've yet to work in a (large) company where the CEO is actually relevant. Most of the decisions happen at lower, departmental levels.
In the initial years, CEOs can make or break a company, but after that it's pretty random. You can have a brilliant CEO that just gets stumped and the company goes bust. Or you can have an incompetent CEO that just stumbles from success to success.
In my experience, CEOs get hired because of their old-boys networks that will allow the company to participate to the pay-to-play games with e.g. financial institutes or similar industry handshake-wink-wink-partnerships. They know people that know people, that's it.
At the companies I've worked at, lower levels never make far-reaching decisions for the company.
That's what incompetent CEOs usually do; they get in the way of competent people doing a heck of a job.
Good CEOs know that they are figureheads and try to stay out of the crucial decision making, handing off responsibilities to people that actually know what they are doing.
Hasn't been the case for me. Even if they didn't come up with, say, a market strategy, they're important in executing it. They lead rather than getting the hell out of the way.
>Good CEOs know that they are figureheads and try to stay out of the crucial decision making, handing off responsibilities to people that actually know what they are doing.
A good CEO makes critical decisions. Handing off responsibilities if they know their limits is indeed part of being a good CEO.
We've known the answer to this question for decades: Very important. You can export entire factories to China, layoff everyone in manufacturing, keep management and design in country. Works just fine.
Don't believe me? How about this short list: Computing hardware. Hand tools. Medical equipment. Home appliances. Office supplies. Power tools. Etc.
What do they have in common? Offshore manufacturing.
This is definitely the case. There's a huge pool of talent outside of the US and Europe.
One of the mistakes people tend to make is this assumption that you can torture (being dramatic) capital and it will not react, it will just bend to the pressure. This is as wrong as can be. Capital is the easiest thing to move from place to place. And capital, with enough pressure, will always move where it can achieve the same outcome with a lower pain-in-the-ass factor.
Despite the popular indoctrinated meme, no, it isn't about greed. It's about getting shit done and staying in business.
Our "leaders" over the last 50 years or so, setup a perfect storm, a chain reaction, that is unavoidable for anyone in manufacturing save a few corner cases (military contractors being one category).
Say you manufactured coffee mugs. You are doing great. You have two other competitors with equal market shares. One of them decides they'll be smart, move manufacturing to China, lower their prices and grab more market share. They do the math: They are going to make LESS per unit, but think they can increase their market share to compensate for that, and more.
They come into the market with their new Chinese made line. You lose a bunch of market share. So does the other competitor. What do you do?
You can (1) lower your prices and operate at a loss; (2) lay off a bunch of people to reduce labor costs and use automation to lower your costs; (3) shut down the business and exit the market or (4) move your manufacturing to China.
That's it. There might be other options which are generally combinations of the four options given above. You move you manufacturing to China. A few months later, the remining competitor does the same.
A year later all three companies are manufacturing in China. They all have about the same market share they had before the move. They are all selling at lower retail price point, which means they are all making less money!
Oh, it doesn't end there. A few years later the same Chinese manufacture that makes their coffee mugs decides to sell directly in the US at a lower price. One of the advantages they have is that our "leaders" signed a treaty that makes shipping within the US free for any Chinese product (within certain limits). A Chinese company can get a product from Los Angeles to NYC for virtually free. A US company has to pay full rate for the same shipping.
Two out of the three companies go out of business and even more people lose their jobs.
> I wonder why that has not been done yet...
Oh, it has. Virtually every discipline you can think of has been offshored. From accounting to software engineering and more.
I have a quick personal example I can share: We needed to do a bunch of accounting analysis that required a bunch of data entry. Our accounting firm wanted somewhere in the order of $50K to get it done. We got it done by a team of business students in Romania for about a tenth of that. For security/privacy all we had to do was write code to redact (black out) private information (names, addresses, account numbers, etc.) on the thousands of documents they processed. This work required knowledgeable human analysis, so it wasn't a simple matter of OCR -> Excel -> summarize.
Capital always tends to find the most efficient way to get things done.
Except in government. In that case, assume half is wasted and that's probably about the right domain.
I've often posited that many issues at large companies would be solved if the VP and SVP level folks were down doing the 'grunt' level work from time to time - like your VP of customer care should be on the phones one day a quarter, your VP of manufacturing should work the line once a quarter and so on.
It's pretty easy to say from on high "well, how hard can it be, they don't deserve that much!" when you've never done the work - it's a whole lot harder if you have and do from time to time. The CEO, needs to be on the floor, and needs to understand every aspect of how the company does business, if not that (like for very large companies like GE and Tyco), at a minimum the division president level does.
Being a CEO is more than just sitting in an office making strategic decisions, it's also having enough of a fundamental understanding of how your business works to know when you're being fed bullshit - you only get that by going out there and doing.
I can use my operating just fine without having ever developed any of the software in it.
“How hard is running a company? Making “X” is what’s hard.”
They then point to the fact they are at the top of their game and an expert and have a post-graduate degree. Their job is very hard and they are very skilled, no doubt.
But once you get exposed to upper management you start to realize it’s really hard to get a large group of people to work towards a common goal. Stuff goes off the rails very easily when people don't understand, care of even know what the company is trying to accomplish and how that relates to their job. And convincing outside investors (public or private) that your business is actually worthwhile investing in and in "capable hands" isn't easy either.
Yes, giving speeches and making “best guesses” on where the business is going seem trivial. But it’s a critical role where if not done well shit falls apart quickly. Remember, some hedge fund doesn't want to know the intricacies of your CPU design - they want to know your company has a product people want and you can deliver it to them profitably. There is a definite "we trust this guy can deliver" filter when it comes to CEOs and it's often based on track record (fairly or not).
Look at Elon Musk. What is his value? Knowledge of rocket design? Knowledge of battery technology? Though I hear he’s technical his knowledge is trivial compared to the experts he hires. The depth of his expertise is likely asking his engineers which is best, asking some pointed questions and then making a call on the totality of everything at stake.
His value is also in being “the face” of Tesla internally and externally. Motivating his employees with a vision when everyone is betting the company will fail. Convincing people they can do something no one has done before. Very few people can do that well and even fewer can do it for years like Musk did.
Now of course very few CEOs are like that, but don’t underestimate the value of CEOs who successfully run even a small business. Those soft skills many technical people think are useless are critical and not many have them in one package.
As such, if you've demonstrated you have the chops to run a billion dollar business you can ask for (and will get) a pay package that dwarfs a typical job.
And of course you have grifter CEOs who are idiots, but say the right thing. No different than any other job. They don’t tend to last very long as CEOs either.
What this event in particular shows, and will likely continue at other organizations, is that absurd executive pay is absurd, and workers that are underpaid or given inequitable compensation for their work can demonstrably cease operations. The company does not hinge on a single CEO. The inequality is despicable, and the amount of paragraphs here defending that gap is beyond strange, at least from a hacker perspective.
And yes, of course, there are CEOs that are idiots. There are also moderately capable CEOs that surround themselves with idiots to insulate themselves from criticisms like "do you really need a $2MM raise?"
I'm not saying that all CEOs are like this, and I've known some incredibly dedicated founder/CEOs who truly bust their asses for the company. But charcircuit's insistence that it's the CEOs who actually make the business work ignores the other 99.9% of the people at the company doing back-breaking work, work the actual overtime, and don't get first-class (or private) flights to go play golf on the company dime. The fact that these people can be replaced is irrelevant. Treat them as disposable, and the company suffers. Underpay them and the economy suffers.
The CEO sets the overall business strategy with the advice of the board. They then have to delegate that strategy to their subordinates for the different activities necessary.
It's harder to find skilled workers with specific skills than it is to find a generic "CEO".
The studies im aware of show that quiet CEOs perform signicantly better than star CEOs on the long term (admittedly that is not equivalent to pay).
Anecdotally company performance does not change significantly with change of CEO.
The current CEO is paid $15m, and is currently responsible for the biggest strike in the company's history, an expensive settlement, and a huge number of unhappy customers who complain that they can't mend their tractors themselves to the point where the government has considered passing laws to ensure they can.
Is it really so hard to find someone who'd do a better job than that for less money?
I'd say he's doing a pretty fantastic job for JD stockholders.
The politicians in Washington have convinced everyone that we should blame CEOs for the fact that our representatives have done a terrible job of maintaining a stable competitive market for low wage earners. The problem isn't that there are too many CEOs. There are too few. The problem with John Deere isn't it's success, but more specifically it's success at forcing others out of the market.
When there are only 2 big employers in your town, guess what? You're going to make whatever they hell they want to pay you.
But yeah, let's blame the CEOs.
This is so false that I have trouble believing you are serious. All pay comes from a fixed source, "income", and the CEO/board is largely who determines how the CEO and workers split up the money.
The UAW situation is different. Unions negotiate contracts that affect all employees. These are set by the ability of the union and management to negotiate, with some pressure from market rates. These are closer to the “stone tablet” idea of yours, but only fixed until the next negotiation.
There is no ‘dividing up the income’ activity, like the other user suggested. Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue.
This is a simple explanation that elides a lot of detail, but hopefully helps.
If those are done they are likely ignored or used to figure out how much lower the pay can be. And a strike is a result of that.
The idea that employees cannot profit from a company doing well, not profit from their own labor and simply get a fixed low pay is insulting.
Yes, that is effectively what is happening.
The value is 'divided' between customers, suppliers, employees, executives and investors and it will go to who has the most power.
If the power balance means they can charge higher prices (less surplus to customers), then that money will go to the remaining parties. If suppliers are commodity, then it's a 3 way fight between execs, employees and investors.
If the company sees increasing sales and is flush with cash, the execs and workers will try to negotiate for higher pay.
"Management just focuses on making more revenue than it’s paying for all expenses, and tries to employ as many people as it thinks it needs to acquire that revenue or grow future revenue."
That process boils down to dividing up surpluses.
Whatever the process is, it's walking along a gradient towards finding somewhere close enough to the balance of power.
A “better” CEO would surely minimize labor expenses, by automating, moving to cheaper regions, etc. In most businesses, labor is the largest expenditure.
... and if unchallenged by organized labor
Right now the market has determined that pay is too low to fill job vacancies, but employers are not raising wages, not the market.
The decided upon rate is determined by the outcome of this struggle.
That's how the market rate sausage is made. It's not an impersonal objective arbiter of truth. It's a reflection of relative levels of power and relative levels of desperation.
Not Marx, something else.
In some lines of business you can overpay and do ok. But imagine a restaurant paying double the wage of one next door. Likely this reflects through into pricing and makes them non-competitive/prone to failure, as restaurants are low margin businesses.
The US has had a large surplus of low skilled labor for the past few decades, thus low bargaining power. There's a pretty obvious reason why, but I'll leave it for you to guess.
The market is an idealized abstraction, not a real thing that exists. CEO pay is decided by Boards of Directors, which CEOs tend to be on, and which are part of a narrow, highly connected class that CEOs are also members of.
> Prices aren't "decided" by anyone
Yes, the prices that a firm will offer for particular work are decided by particular decision-makers at the firm, not abstract outside forces. The market is a model of the the aggregate of factors influencing the decisions those people make, and the decisions employees make about accepting work.
A salary is just what it costs to retain your employment -- that's it. When you can find higher pay elsewhere, eventually you will take the offer. Companies arent donating money.
CEO pay has only become significant in recent years because of equity, ie., CEOs since the 80s have increasingly been paid in shares. That is where the disparaity comes from.
Since the CEOs job is largely to focus on the share price -- do you see why giving them lots of equity is exactly the sensible thing to do?
Having a high share price is a secondary indicator of expected revenue, growth, and profit.
Giving CEOs equity is exactly the wrong sort of incentive, because it provides opportunities of massaging the expected long term results to achieve short term price variations in the favor of the CEO.
The business being "profitable and successful" is the objective of its owners because they want a return on their investment. It is the objective of the CEO only insofar as that is what they are hired to do.
CEOs are given equity to align their incentives with the company owners.
Im not sure who you think is hiring CEOs or why, but it isn't someone with an idealistic sense of "success". The CEO is given their mandate by the company investors.
Most boards are cohorts with CEOs.
Can't we describe the reality better if we accept that the "labor market" as an analogy to e.g. a potato market or washing machine market is a faulty model?
Salaries are determined by the market price for that labour; meaning if you want to hire Alice to be your CEO you are bidding against others who also want Alice. The price is what Alice will take to work for you, and not another company.
That is essentially how all salaries are set. There is no mystery.
The public steadfastly refuse to believe in anything other than a mythological-moral meaning to prices. It is absolutely bizarre. Prices arent set by anyone and have no moral significance. (All this stuff about tech "scalping" given shortages is likewise the same fallacy. )
The market isn't a seamless black box that spits out price signals. It is people.
You know this is true as you are watching a situation where workers will no longer work for $x play out.
The difficulty in keeping one job filled is not dependent on another job. The difficulty in hiring a janitor does not impact the difficulty of hiring a software developer.
CEO salary / number of workers / number of working hours in a year = 14.75 million / 70k / 2080 = $0.10
On the other hand if you cut the entire c-suite, other board members and top management in half there is a significant amount. Usually with companies this size there are many mini CEOs in divisions and it starts to add up.
But to contribute what I suggest (again, without breaking ground): capitalists take 30% of all income generated, for themselves. I haven't looked up the financials for John Deere, but I mean that's the ratio when you take the U.S. as a whole. That 30% is a wayyyy bigger piece of the pie than divying up a CEO's income, which is probably a tiny part of that (on average) 30%.
- $15600000 CEO compensation [0]
- 69600 workers [1]
- 1760 hours average per US worker per year [2]
- $20.12 hourly wage for the lowest paid John Deere employees
$0.13/hour, 0.6%, or a bit over a dollar a day increase for the lowest paid group. That would be the increase if the JD CEO would work for $1, with all his previous pay evenly distributed to all employees. Not insignificant.
Now let's have a slightly different thought experiment. What if the CEO pay is cut by 50%, and evenly distributed only to the bottom 10%? A $0.64/hour, 3.2% or $5.09/day increase. That would be a very significant number to all involved.
I'm not saying this is what should happen or not. Just saying the number is significant.
[0] https://eu.desmoinesregister.com/story/money/business/2021/1...
[1] https://www.statista.com/statistics/278010/john-deere-number...
[2] https://en.wikipedia.org/wiki/List_of_countries_by_average_a...
When you are financially struggling, a 10¢ raise (extra $4 for the week) can make a big difference.
One of my friends worked 40 hours and had $20 to spend on herself after her bills (which were frugal, since she didn’t earn much). Low pay sucks when you earn a discretionary $0.50 for every hour of work.
As long as people are effectively forced to work under even the most exploitative conditions, the market rate is going to be depressed by desperation. The labor market without a decent social security net (aka unemployment insurance that actually works and is accessible, or outright UBI) is not a free market by definition!
That is why the COVID relief packages were able to overturn the market - they allowed people to leave their old jobs (if they still existed, that is) and search for new, better employment without the pressure of starving as somewhat around 60-70% of Americans, under normal conditions, would not have saved enough money to cover even a single week of unemployment.
That safety net is called your savings account. I could live off my savings alone for years before I find another job.
>But yeah, let's blame the CEOs.
hmmm, who should we blame for destroying the job market in their town? or who should be blamed for trying to sabotage organized labor?
poor CEOs getting all the blame for the stuff that is being done by this unknown force...
They work for the same company, with the same surpluses etc.
They are very 'connected'.
I don't blame the CEOs, or their pay for that matter, I blame a system in which if a CEO goes home, s/he can spend one year golfing and the following one choosing among the offers from his/hers golfing friends, while if a worker becomes unemployed, s/he could starve within one month while having no way to find a new job.
When large corporations fail, they socialize their failures by getting bailouts from the government. There are never bailouts for individuals. Whenever a corporation has extra capital, they do things like buy back stock, rarely ever give it to employees, it simply isn't profitable for them to do so. These are choices a CEO makes in running their company.
The government allows for a bit much capitalism when it comes to health care, in my opinion. The added costs for health care are commonly thrust onto all employees, those at the bottom of the pay scale are impacted the most because they make the least. An out of pocket health care expense for a CEO is a rounding error but can be financially devastating to the lowest paid person that has coverage.
I get that they are different jobs. For example if there were a software error in a JD tractor that caused many deaths (i.e. some safety feature fails) its more likely a CEO/CxO would have to step down for mis-managing something than a bunch of factory workers.
In general, the pay differences are really out of whack though.
I hope some Chinese company kicks their anti-customer ass.
Looks like strikes work, which is nice to see.
> During the 15 years from 1947 to 1962, the real hourly earnings of production or nonsupervisory workers in the private nonfarm economy, adjusted for overtime (in manufacturing only) and for interin- dustry employment shifts, increased at an average rate of 2.5 percent annually; the advance during the 14-year period from 1962 to 1976 averaged only 1.2 percent annually.
The pandemic has taken 0.2% of US population thus far, yet wage growth is nearly 5% in the past 12 months, significantly outpacing inflation.
~50 years of relative peace and prosperity resulted in wage stagnation for workers. The death of organized labor was lamented, and many households struggled to keep pace with rising expenses.
It’s as if there is a threshold of labor availability below which there is a dramatic increase in upward wage pressure. The threat of production not meeting sales demand is a powerful one.