posted
There is a meeting of conservative luminaries visiting my city this week, discussing how terrible the liberals are. Prime target is the fact that we still have an income tax in this state, despite neighboring states dropping theirs. They demand that our state should be more Business Friendly.
Dropping taxes is not the only thing we can do, and I am sure they have a list, to make our state more competitive against those evil people in other states. So I thought why waste time dropping tax rates a percent at a time, or dropping minimum wages and child labor laws or removing government oversight one law at a time. Lets beat everyone to the bottom with this--the Most Business Friendly State of Ever!
The 10 Rules to make your state truly Job Friendly.
Rule 1--Each company receives 1 Get Out Of Jail Free card, per year, per 1000 employees.
Rule 2-- Forget the minimum wage--we will have a $15/hr Maximum Wage for all non-salaried employees.
Rule 3-- Employees will take turns, 1 per day, giving their C Level employers back rubs or face mandatory jail time.
Rule 4 -- Pollution effects the lives of individuals, not corporations. Therefore the ones responsible for the clean up of any pollution, or the costs of limiting pollution, should be the people, not the company.
Rule 5 -- The 40 hour work week is the standard and the norm in this great country. So from now on our state will implement the 120 minute hour--hence doubling the productivity and halving the costs of employing our great workers.
Rule 6 -- The reason for and goal of Welfare, Food Stamps, and Health Care for the poor shall be officially stated--To keep a large, healthy, and cheap pool of labor available for Job Providers.
Rule 7 -- The goal of Education in this state shall be the production of useful and trained cheap labor for the job providers--as well as football players for the Job Providers diversion. Unnecessary courses such as critical thinking, history, arts and music shall be available at added expense to the student or their family. Taking such courses will go on your permanent record and are grounds for not being hired.
Rule 8 -- The life of an animal is cheap, the life of an entire species is not worth the profit of a single quarter. If a species is in the way of production, profit, or jobs, no law or legal justification will be allowed to save that species.
Rule 9 -- Religion shall once again find a central place in our schools, government, and laws--making sure that all the people know their place and know that God gives wealth to those God favors, and gives poverty to the evil, the lazy, and the damned.
Rule 10 -- All politicians must conform to the Golden Rule--Those who have the Gold Rule. When in doubt, check with those with the checks.
Posts: 1941 | Registered: Feb 2003
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It's a good topic to bring up. Most states aren't competing globally for jobs, or create jobs, they merely fight to take jobs from other states. Companies are laughing their way to the bank as people fight for jobs that are worse and worse while public tax revenue drops, so more public jobs are lost, so services declined.
We're slowly rolling back to the1910's
Posts: 21898 | Registered: Nov 2004
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posted
Race to... not quite sure but we’re racing there!
The 10 Rules to make your state truly employee friendly
Rule 1 -- Companies are evil by design. Every year a lottery will be held with the names of all C-Level executives and board members. The winner will go to jail for 30 years since we all know they are lying, cheating, scumbags anyway.
Rule 2 -- Even $15 minimum wage isn't a sufficient living wage. Minimum wage is now $25/hour.
Rule 3 -- Banks are the cause of all major problems with the country. All banks will hereby be disbanded and replaced by the Federal Bank of the United States.
Rule 4 -- Corporations are the ones with all the money in this country and should therefore be tasked with fixing all the countries problems. Within 1 year all companies must reduce their carbon footprint to 0 or all C-Level executives and board members will face jail time.
Rule 5 -- We all know that the less hours one works the more productive they are. So to increase productivity of a 40 hour work week we are defining one hour as 30 minutes. Now employees will be twice as productive!
Rule 6 -- Your success is due to gov’t funded schools, roads, and buildings. We ask you just give a little bit back, not much just a little. All income over 1 million dollars will be taxed at 95%.
Rule 7 -- Education is valuable for the sake of education. The earning potential of one field of study over another shall not be mentioned or considered. Children should be encouraged to express themselves through their field of study. Especially if that field is in the liberal arts.
Rule 8 -- Plant and Animal life and comfort is priceless, however since infinity is impractical to work with the relocation of an animal’s habitat shall incur a cost of $100,000 dollars per creature and $50,000 per plant species. Each business shall relocate all plants and animals in the space needed to build any buildings at their own cost on top of the fine per creature/plant species.
Rule 9 -- The word “God” in any language or reference shall be removed from the Pledge of Allegiance, all currency, and all public/government buildings. Christmas shall no longer be recognized as a holiday to be replaced by Winter Solstice. Traditional Christmas decorations shall not be allowed in any public space.
Rule 10 -- Affirmative Action is ineffective. All minority applicants must be hired before a white applicant may be considered.
Posts: 362 | Registered: Nov 2008
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posted
All snark aside...What exactly do you think those businesses are doing with the money they save on taxes by moving to a new state? Do you have any evidence to support that idea beyond hyperbole and assumption? And here's a very important question you should consider...for what reason should any business give you a job?
Posts: 3003 | Registered: Oct 2004
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quote:Rule 9 -- The word “God” in any language or reference shall be removed from the Pledge of Allegiance, all currency, and all public/government buildings.
Yes please.
(I'd be vaguely in favor of renaming the nationally recognized holiday to something generic, but its not something I'd actually care about. Banning the mostly pagan/secular decorations just seems silly.)
Posts: 5656 | Registered: Oct 1999
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quote:Originally posted by Lyrhawn: I think they already do all this in Texas.
It's a good topic to bring up. Most states aren't competing globally for jobs, or create jobs, they merely fight to take jobs from other states. Companies are laughing their way to the bank as people fight for jobs that are worse and worse while public tax revenue drops, so more public jobs are lost, so services declined.
We're slowly rolling back to the1910's
Yeah Colorado had its own little microcosmic version of this national theater, the kind where Rick Perry went to other states and said "ur state bad at jobs, come 2 texas, land of lower taxes" and claiming things like that 'every engine manufacturer in the country resides in texas'
in our little mini-version, the Springs liked to hype up its good fiscal governance and lower tax overhead. it would say you'd pay more in a place like Loveland or Boulder or Denver or even Pueblo. Hooray! Some companies sure did go there for the lower regulatory and tax overhead. Of course, at the same time, their bog-standard american fiscal cutting spree resulted in a city where they struggled to afford keeping streetlights on at night (or just started turning them off forever), the roads and bridges are aggressively going to crap, and they didn't even support a firefighting force even remotely sized or qualified to protect them from the fires that ruined whole neighborhoods, and fire teams poured in from the north to try to save their bacon — yes, they were effectively subsidizing their disaster protection from adequately covered counties.
Have they fared well in their little faustian bargain? hahahahaha nope, it's a great place to LEAVE and land values don't react well to roads becoming dungheaps, but at least the meth is plentiful and relatively cheap down there, like it's a little colorado experiment in them emulating the south.
Posts: 15421 | Registered: Aug 2005
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quote:What exactly do you think those businesses are doing with the money they save on taxes by moving to a new state?
Evidence strongly suggests that they are giving it to their executives.
What evidence? Where did you get this evidence? What businesses are doing this? How do you know they aren't using the extra money to expand their operations?
Posts: 3003 | Registered: Oct 2004
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Stiles, I like your list, but mine is a bit more--select. See mine is all about giving corporate interests more than what they want, which is what some Business-Republicans are demanding. You list is more--liberal agenda gone amok.
For example your takes as one of its extreme positions--removing the church from all aspects of the state. Mine does something far worse--it is the forcing of faith to meet the desires of the business elites. Those who want a non-religious state are saying "I am not Christian so why is the state forcing Christian symbols on me." What I portray is much darker. It is, "There is no wall between Church and State and Business. Business rules all."
Or, and Boris-- the proof is the high profits of investors, many C-Level executives, and many big companies and the lack of jobs, growth, or new production they are offering resulting in still high unemployment.
Posts: 1941 | Registered: Feb 2003
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quote:What exactly do you think those businesses are doing with the money they save on taxes by moving to a new state?
Evidence strongly suggests that they are giving it to their executives.
What evidence? Where did you get this evidence? What businesses are doing this? How do you know they aren't using the extra money to expand their operations?
Expand their operations where? In the US, because that's very common for the largest corporations today, to expand their operations in the US as much as possible? Or if in the US, to expand their operations in states with lower standards of living, education, life expectancy, and public services?
Because I forgot-the motivating force behind capitalism is enlightened self interest, so the theory goes...and this means that it's somehow unreasonable to suspect high end executives to be lining their own pockets as much as possible...for some reason. I guess. *That* needs to be proven somehow, as though there were proof you would even accept. But your assertion-that they're using these extra bucks only to expand an thus make things better for everyone...well, that's just something we need to take on faith. Right?
Posts: 17164 | Registered: Jun 2001
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quote:What exactly do you think those businesses are doing with the money they save on taxes by moving to a new state?
Evidence strongly suggests that they are giving it to their executives.
What evidence? Where did you get this evidence? What businesses are doing this? How do you know they aren't using the extra money to expand their operations?
Expand their operations where? In the US, because that's very common for the largest corporations today, to expand their operations in the US as much as possible? Or if in the US, to expand their operations in states with lower standards of living, education, life expectancy, and public services?
Because I forgot-the motivating force behind capitalism is enlightened self interest, so the theory goes...and this means that it's somehow unreasonable to suspect high end executives to be lining their own pockets as much as possible...for some reason. I guess. *That* needs to be proven somehow, as though there were proof you would even accept. But your assertion-that they're using these extra bucks only to expand an thus make things better for everyone...well, that's just something we need to take on faith. Right?
I'd appreciate it if you would not start responses to me with snark and attitude when I'm being completely reasonable and doing nothing more than asking questions in this thread. I asked some simple questions. If you can't answer them with facts or objective evidence to support your view, rather than hyperbole and attitude, please refrain from commenting.
There are more businesses out there than the large megacorporations that you're talking about. There are smaller businesses that are competing for customers, building themselves to be able to handle more customers, and doing other things that smaller businesses do.
It costs money to increase a company's business potential. It costs money for marketing, inventory, office space, electricity, equipment, IT infrastructure, not to mention employee pay and benefits. Every time a company makes an attempt to expand, they take a major risk that can take them from being profitable to being completely bankrupt in no time.
But no one has even tried to answer the really important question. Why should any company give you a job? For what reason should business owners give you more pay? Why do you deserve to get more money for the work you do?
Posts: 3003 | Registered: Oct 2004
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Yeah I got side tracked on a couple of them. I think most of stayed on task with what is being demanded of businesses.
Posts: 362 | Registered: Nov 2008
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quote:But no one has even tried to answer the really important question. Why should any company give you a job? For what reason should business owners give you more pay? Why do you deserve to get more money for the work you do?
posted
There is something to be said about taxes. I have a client that recently moved their entire operation from California to Las Vegas. Their primary reason for moving was because Nevada is more business friendly when it comes to taxes. They let all of their employees keep their jobs, and the three employees who chose to stay in California are provided air fare, hotel rooms, and rental cars during the work week so they can come to the office in Vegas to work.
Since moving to Las Vegas, they have gone from 23 employees to 46, and are busy expanding their office since they are growing at such a rapid pace. All of their employees are very well paid, (I believe the receptionist is the lowest paid employee at $17 / hour) and they told me they can afford to pay so well because they do not have the high tax burden they did in California.
We are starting to see a lot of businesses move from California to Las Vegas to escape the massive tax burdens. Take-Two Interactive is another company that just moved their entire QA operation to Las Vegas. They were able to create an extra 150 jobs due to the lower tax burden.
California has an 8.8% tax rate, compared to Nevada's 0%. Even Apple has seen the benefit of a lower tax rate, and is opening a new data center in Reno that sits on 345 acres of land.
Generalizing all companies and their CEO's by saying that they are all money grubbing, power hungry, jerks is not fair. There ARE companies who care about their employees and want them taken care of. I think the majority of businesses want what is best for their employees. Many companies that open branches or move their their businesses to lower tax states don't always squander the savings - They reinvest it in their employees and their business. I'm not saying that is always the case, I know there are businesses that take advantage and scummy CEO's as well. There good ones too!
Posts: 1937 | Registered: Nov 2006
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The Apple data center probably only employs a handful of people and does not generate any revenue. It's more likely they put it in NV because it was cheap land and could support their plans for solar power than for any tax reasons.
Posts: 3275 | Registered: May 2007
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quote:But no one has even tried to answer the really important question. Why should any company give you a job? For what reason should business owners give you more pay? Why do you deserve to get more money for the work you do?
Why is this question relevant?
Hobbes
How isn't it relevant? Inside every complaint that executives make too much or are crapping on their employees or whatever is an assumption that those employees somehow *deserve* to be making more money than they do now, but no one seems to be able to give a reason for that belief other than just because. Why? Why should you be making more money than you are?
Posts: 3003 | Registered: Oct 2004
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posted
I'm absolutely fine believing there are good ones, too. The problem I personally run into, and when I start rolling my eyes, is when it's proposed that it's a general good rule of thumb that 'companies want what's best for their employees'. It sounds very nice but it's actually a complicated constant negotiation of limited resources, and it simply doesn't stand to reason that 'what's best for their employees' is going to be the primary concern for nearly anyone-because that would be sacrificing some of 'what's best for the company', and operating at a disadvantage with respect to those who would be keeping that at the front.
What I would be much more amenable to, much less dismissive of, is if it were said 'I believe most companies aren't out to screw their employees'. It would have the advantage of probably being true, as well as not romanticizing business..,unless someone, somewhere, can find me a company started with founding vision of 'helping our employees'.
Posts: 17164 | Registered: Jun 2001
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I'm employed by a very large company: about 30,000 employees in total. If I was the executive and I wanted to line my pockets a bit, I could scrape about $33 from everyone's salary and give myself a million dollar bonus. What are the consequences for me if I do so? The company is employee owned, but the executives and board own enough stock to make the typical employee's vote meaningless so we can't wield power that way. So what's the recourse? We can quit of course. But is that reasonable? Changing jobs is not an easy or cheap thing to do, would you quit for $33 taken from your salary? Do you think it's fair if the CEO were to do this?
And what's actually happened is much more sinister. We weren't all docked $33 a year, we had our benefits slashed. I, a single man with no dependents and the lowest allowed health-care options (and thus least impacted) am now charged about $50 a month more. The excuse given was poor decision making up top and Obama care (a year and a half before it's enacted so that's a pretty ballsy claim). Yet some how the executives making these decisions get raises and massive bonuses while we get cuts. I'm afraid someone will have to explain to me why that's reasonable before I explain why I think I didn't deserve to have my benefits cut.
And in our current system: what are the consequences for them for acting this way? Do you think that's moral?
quote:Why should you be making more money than you are?
Me? I shouldn't. I make plenty. But in general I don't believe that the market is the best way to decide this because the market doesn't care about obviously horrible extremes.
If the market is such that a huge number of people are looking for work then corporations have the power to pay very little to hire people meaning that a lot of people will be on subsistence salaries or below regardless of the profitability of their employer. And indeed this is currently happening. A huge number of the new jobs in the last few years are low paying and part-time despite record levels of corporate profits.
Is this a desirable state - a shrinking group of elites with an extraordinary share of total wealth and a growing group of people that barely get by with growing gap between those two extremes? That's what's been happening for the past couple decades. So while I'm doing just fine, there are plenty of people who should be paid more just because the alternative is an unhealthy and unnecessary class divide.
Posts: 3275 | Registered: May 2007
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quote:Originally posted by Hobbes: How would you set employee salary, Boris?
I'm employed by a very large company: about 30,000 employees in total. If I was the executive and I wanted to line my pockets a bit, I could scrape about $33 from everyone's salary and give myself a million dollar bonus.
Actually, you could probably line it with more than that, since you wouldn't have to do payroll taxes for a million dollars worth of employee pay.
quote: What are the consequences for me if I do so?
You have significantly decreased employee moral, and risk losing skilled employees to a competitor, who then can provide your competitor with information about your operations, weaknesses, etc.
quote: So what's the recourse? We can quit of course. But is that reasonable? Changing jobs is not an easy or cheap thing to do, would you quit for $33 taken from your salary?
I would start looking for another job, personally. But you're assuming that losing employees is free. A long time employee is always going to be more efficient at a job than a new employee. The costs in revenue, efficiency, and employee cohesiveness are significantly greater than you might imagine. Every time someone leaves a company, they take vital knowledge, information, and skills with them. Smart executives know this and will usually refrain from cutting employee pay just to line their pockets. Suggesting that *any* company does this as a matter of course without evidence to support is ignorance.
quote: I'm afraid someone will have to explain to me why that's reasonable before I explain why I think I didn't deserve to have my benefits cut.
Earlier in your post you suggested that it would be wrong for someone to cut your pay to line their pockets. You also mentioned that you have an option to leave if you want to in response to that cut. What do you think would happen if your company failed to maintain the pay of the executives that run the company? Considering those individuals probably have a much more intimate understanding of the business than you do, probably have extremely unique skill sets, and an executive moving to a competitor could result in significant losses for the company you work for...who do you think the business is going to focus its funds on? After all, executives are still people who can still make choices. In fact, their choices have a much bigger impact on the business than yours do.
But there's something you're ignoring here. The fact that you've basically stated that it's wrong to take money out of your pocket to line the pockets of an executive, but you're demanding you take money from the executive's pocket to line yours. But you haven't given a justification for this beyond "They can afford for me to do that." How is *that* morally acceptable?
quote: in our current system: what are the consequences for them for acting this way? Do you think that's moral?
As I mentioned, the consequences are losses to employee motivation and efficiency. Not to mention that stressed employees are usually not as good at their jobs. The consequences are not immediate, but they most certainly exist. Product quality drops, efficiency drops, eventually the company runs into a situation where those decisions to make cuts cost them more than they saved. Those things are most definitely consequences.
quote: ,unless someone, somewhere, can find me a company started with founding vision of 'helping our employees'.
Google?
[ September 26, 2013, 04:39 PM: Message edited by: Boris ]
Posts: 3003 | Registered: Oct 2004
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quote: Inside every complaint that executives make too much or are crapping on their employees or whatever is an assumption that those employees somehow *deserve* to be making more money than they do now, but no one seems to be able to give a reason for that belief other than just because. Why?
Because they do indeed deserve to make more money. Because executives make too much and do too little and do not contribute to the bottom lines of their companies or the quality of the products produced by those companies, whereas the laborers actually making things and providing services are grossly underpaid as a percentage of capital moved; large business in particular has become an exercise in moving capital from one shell to another and skimming off a bit every time it moves, and the actual production of the company is neither rewarded nor recognized.
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quote:You have significantly decreased employee moral, and risk losing skilled employees to a competitor, who then can provide your competitor with information about your operations, weaknesses, etc.
I think you grossly overestimate the mobility of the modern workforce and the perceived effects of a single $33 reduction in pay.
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quote:Smart executives know this and will usually refrain from cutting employee pay just to line their pockets.
The idea that we hire and reward executives for being smart -- or at least smart and actually invested in the success of their companies -- is amusing to me in its naivete.
Posts: 37449 | Registered: May 1999
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Even supposing that Google's *primary*, founding motive was 'to help our employees'...a rather large assumption to make...what, Google is a model of standard corporate behavior?
Posts: 17164 | Registered: Jun 2001
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Boris, apart from totally skipping over the relevant parts of my post: you seem to be unable to grasp the concept that just because we're operating in an economy that's based on free market ideals, that doesn't mean that all employee's salaries are set by free market principles. Your response to me having my benefits raided so that those who have been losing the company money can make six-figure bonuses is that they deserve that amount of money for the simple reason that they're higher-up the company food-chain. Apart from the ridiculousness of this assertion, let me ask you: why do you think they should make so much more than the bottom-line worker to being with?
And before you respond with "they know more" or "have a more unique skill set", remember that if you start defending that pay disparity with actual, monetary value they bring to the company: that opens up doing the same in reverse. And since, in my company, the low-line engineers both produce the revenue-generating product and sell, negotiate, plan and deliver that product, this will put you in a very weak position. The only substantial contribution that has impacted my regional office in the last 10 years that didn't come from my regional office was a series of directives that ended up costing us tens of millions of dollars. For which the executives in charge got bonuses.
It isn't free market setting pay because these people are setting their own salary. And as your response admits: they can set as high as they want it until the employees are so fed up that they abandon ship. Imagine you have a house, a spouse and kids and they all depend on you (and have presumably all put down roots where you live, as have you). Now tell me what you think it will take to convince you to quite your job? From experience, executives taking away over $50 a month in benefits to pad their own pockets while they decrease the companies value isn't enough to make anyone leave.
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Furthermore, it is not the worker who should have to justify their pay, it is the executive who should have to be able to justify their incredible rise in pay.
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Hobbes said that the executives set their own pay. So, therefore, it must be a private business.
If it's a publicly-traded corporation, as you said, the shareholders set the executive pay. Not the executives.
In either case, the owners of the business set the pay (at all levels). I'm not exactly sure what the objection is. Who would you like to set it?
Posts: 289 | Registered: Jan 2002
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quote:Hobbes said that the executives set their own pay. So, therefore, it must be a private business.
That's not true. The board members set pay and the board generally includes the highest level executives. Shareholders have some voting rights in aggregate but do not directly set pay.
Posts: 3275 | Registered: May 2007
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Just to clarify, the executives are on the board, but they are not the board. The majority shareholders constitute most of the board. If they aren't happy with the executive pay, they can change the pay or the executive. Shareholders who aren't happy with the executive and/or his/her pay can sell their shares.
It's not fair that executives get paid so much (maybe, probably). It's not fair that a whole lot of other people get paid so much either. But any system that tries to enforce its sense of fairness on others is only going to make things worse. That is, for example, how we got ourselves in our current health care insurance mess. Or how executive pay is such a bizarre mix of bonuses and etc.
Posts: 289 | Registered: Jan 2002
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quote:Originally posted by Minerva: Just to clarify, the executives are on the board, but they are not the board. The majority shareholders constitute most of the board. If they aren't happy with the executive pay, they can change the pay or the executive. Shareholders who aren't happy with the executive and/or his/her pay can sell their shares.
It's not fair that executives get paid so much (maybe, probably). It's not fair that a whole lot of other people get paid so much either. But any system that tries to enforce its sense of fairness on others is only going to make things worse. That is, for example, how we got ourselves in our current health care insurance mess. Or how executive pay is such a bizarre mix of bonuses and etc.
The largest shareholders, and therefore the ones who will pass the 'vote' are generally Executives themselves. Whether they are on their own board or at another company is really immaterial. They're pretty round-robin. There are many executives that are large shareholders/board members for other corporations. Why would they vote to lower their pay, or their friends pay, or not buy the stock?
The common stock investor (Me) doesn't have any power to change what the executives get paid. Sure I could 'not invest' and therefore only take the money I make and put it in a savings account. But that's not going to get a very large return. Also my low amount of shares is never going to add up to anything 'meaningful' to the corporation. I can also guarantee there is about Zero chance I can convince 1,000,000+ 'little people' to get together and force a chance in executive pay.
The argument that "Common Shareholders" hold the blame for ballooning executive pay is asinine.
Posts: 164 | Registered: Sep 2012
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'The argument that "Common Shareholders" hold the blame for ballooning executive pay is asinine."' Absolutely agree. But who should care about executive pay but the shareholders? It doesn't affect anyone else. So if it is really important to you that a company has low executive pay, then find a company that pays their executives less. If enough shareholders do that, especially the bigger ones, then executive pay should go down.
I suspect, however, that what will happen is that the company that has lower executive pay (or probably, actually, lower executive compensation as a whole), will not be able to attract top talent. And therefore, will suffer.
As for the argument that the largest shareholders are the executives, I really don't know if that is true or not. But let's assume for a moment that it is. Ok, then if they are the largest shareholders, then they should be able to set their salaries. Right?
Posts: 289 | Registered: Jan 2002
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quote:the executives are on the board, but they are not the board
No, but their friends are on the board, and they are on the boards that determine their friends' pay.
quote:But who should care about executive pay but the shareholders? It doesn't affect anyone else.
It affects everyone else at that company, who is being paid less for their work. On a broader scale, it also affects the entire country by creating a ruling class of insulated, insular, and altogether stupid royalty.
quote:I suspect, however, that what will happen is that the company that has lower executive pay (or probably, actually, lower executive compensation as a whole), will not be able to attract top talent. And therefore, will suffer.
This is the argument frequently used by executives and boards to justify grossly exorbitant executive pay. But no study anywhere has ever found anything but a negative correlation between executive compensation and corporate performance.
Posts: 37449 | Registered: May 1999
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posted
What would happen if we tried to actually do a breakdown of the value each employee adds or subtracts from his company?
That doesn't seem to be how we currently value work. Especially in a poor economy, companies have all the power in the world to reduce wages because the value of their work is irrelevant when they are easily replaceable. There's clearly a disconnect between the value of work and compensation for work, or the people who actually form the cogs in the machine would make more.
That's why the strike (and in times past the boycott) is the most powerful weapon a worker will ever have, and why attempts to erode the power of the strike are so incredibly damaging. All a person has is her or her labor.
Posts: 21898 | Registered: Nov 2004
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quote:Originally posted by Dan_Frank: Lyr, how do you figure the value of someone's work is unrelated to how replaceable they are?
Isn't there a relationship there?
A person could be doing very valuable work, but there could also be thousands of equally capable people out there that are unemployed or underemployed and thus are easily replaceable.
A specialist doctor and foremost expert in his field does valuable work and may very well be irreplaceable while a delivery driver for a profitable medical supply company is also doing valuable work but could be replaced quite easily.
Posts: 891 | Registered: Feb 2010
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quote:Originally posted by Dan_Frank: Lyr, how do you figure the value of someone's work is unrelated to how replaceable they are?
Isn't there a relationship there?
You may want to reread my post. There IS a relationship, but it's a negative one. My argument is that there's not a fair relationship between the value of a person's work and their COMPENSATION, because their replaceability puts severe downward pressure on their wages.
Workers are not paid with respect to the level of value they add to a company. But higher level executives are paid more disproportionate to the level of value they add or subtract from a company, when the quality of their work seems to play little value in compensation valuation. They can run a company into the ground and still get paid a princely sum. I'm rarely convinced that the work of these higher level executives isn't easily replaceable as well. Perhaps not as much as a line worker, but they aren't one of a kind.
Posts: 21898 | Registered: Nov 2004
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quote:But no one has even tried to answer the really important question. Why should any company give you a job? For what reason should business owners give you more pay? Why do you deserve to get more money for the work you do?
Why is this question relevant?
Hobbes
How isn't it relevant? Inside every complaint that executives make too much or are crapping on their employees or whatever is an assumption that those employees somehow *deserve* to be making more money than they do now, but no one seems to be able to give a reason for that belief other than just because. Why? Why should you be making more money than you are?
Because if they don't, they'll hang from the inoperable street lamps with piano wire made in china?
Posts: 12931 | Registered: Aug 2005
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quote:Originally posted by Dan_Frank: Lyr, how do you figure the value of someone's work is unrelated to how replaceable they are?
Isn't there a relationship there?
You may want to reread my post. There IS a relationship, but it's a negative one. My argument is that there's not a fair relationship between the value of a person's work and their COMPENSATION, because their replaceability puts severe downward pressure on their wages.
Workers are not paid with respect to the level of value they add to a company. But higher level executives are paid more disproportionate to the level of value they add or subtract from a company, when the quality of their work seems to play little value in compensation valuation. They can run a company into the ground and still get paid a princely sum. I'm rarely convinced that the work of these higher level executives isn't easily replaceable as well. Perhaps not as much as a line worker, but they aren't one of a kind.
No, you sidestepped my question. Forget execs for a second, lets focus on the people you think are being paid less than the value they bring because they are replaceable.
So you don't think that being easily replaceable is a reflection of the lower value of your work. But this is false on the face of things.
If you are readily replaceable, because anyone could do your job, because it is a low skill job, then you don't get special credit just because the work you're doing brings in a lot money. Your labor, personally, isn't what's worth a lot of money, the company your work for is.
If your job is to watch a machine and press a red button when you see a red light, and in so doing you ensure the machine makes the company ten million dollars a day, you aren't actually providing ten million in value to the company. You're providing whatever amount is reasonable to pay someone to sit there and watch for a light.
If failure to push the light would result in their losing that money, then sure they're likely to pay you more than the company whose red light machine only brings in a thousand bucks a day... But still only enough as is needed to find a largely incompetent person who isn't colorblind and can be entrusted with this task.
To say that you're being underpaid because your job makes money for the company is asinine. You're easily replaceable. Anyone could make that money for the company. Why pay you much?
quote:Originally posted by Wingracer:
quote:Originally posted by Dan_Frank: Lyr, how do you figure the value of someone's work is unrelated to how replaceable they are?
Isn't there a relationship there?
A person could be doing very valuable work, but there could also be thousands of equally capable people out there that are unemployed or underemployed and thus are easily replaceable.
A specialist doctor and foremost expert in his field does valuable work and may very well be irreplaceable while a delivery driver for a profitable medical supply company is also doing valuable work but could be replaced quite easily.
Right. So the delivery driver is less valuable to his company.
This is just baffling. What do you guys think value means?Posts: 3580 | Registered: Aug 2005
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I didn't sidestep your question, I answered it directly.
Why do you think people should not be paid with consideration to how much value they create for a company? What's to stop us from valuing labor that way, and what problems do you see with that?
And, for that matter, if you don't believe compensation should be tied to value, then I suppose you would support cutting CEO pay by like 90%? Or do you think they should get paid whatever since it doesn't matter if they actually are successful or if they drive a company into the ground?
I do in fact think that replaceability should play a role in compensation. Just not to the extreme it currently does. I also believe in putting a floor under a certain standard of living, and I think that makes society as a whole more wealthy, raises everyone's standard of living, and in general makes things better.
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quote:Why do you think people should not be paid with consideration to how much value they create for a company?
Because, firstly, how do you measure it? You can't. You can make up a bunch of just-so stories; that's not the same thing.
Secondly, suppose you have a company of three people. The company makes, let's say, 3 million a year. If any one of the three employees were not there, the company would fail and make 0 a year. Clearly, therefore, each of the three employees is "creating" three million dollars; and the total wages paid by the company should therefore be nine million. Right? I trust you see the problem.
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quote:Why do you think people should not be paid with consideration to how much value they create for a company?
Because, firstly, how do you measure it? You can't. You can make up a bunch of just-so stories; that's not the same thing.
Secondly, suppose you have a company of three people. The company makes, let's say, 3 million a year. If any one of the three employees were not there, the company would fail and make 0 a year. Clearly, therefore, each of the three employees is "creating" three million dollars; and the total wages paid by the company should therefore be nine million. Right? I trust you see the problem.
Why would each of them be creating three million and not take a share? Even if I grant you your point, that really doesn't make any sense.
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I think perhaps he means that, because the absence of any means total failure-so in a sense, at least by some economic thinking, each are responsible for making $3m. If that's what he means, it does make sense to me, although it required a conscious shifting of my American thinking for a moment.
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How can their contributed value be greater than the sum total of value created? If each of them is equally necessary to create the three million, then each has an equal share in the three million. They each get a third.
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quote:Right. So the delivery driver is less valuable to his company.
This is just baffling. What do you guys think value means?
I suspect what they mean is to strip away some of the moralizing that's usually (in the US) attached to these sorts of questions. The traditional American line goes, an employer will pay a fair wage based on the value an employee brings to the company. Which is technically true, but it's also incomplete. The delivery driver's services are vital to the company's success-but he is more easily replaced, which leads to the second component of the true and often ignored economic adage-that an employer will compensate an employee based on the value they bring and at the lowest level they can get away with to maintain and improve their business.
That second part doesn't get talked about much-the Invisible Hand is morphed into not just a competitive, evolutionary influence but somehow a morally just one as well when it seems to me that it's entirely separate from questions of morality.
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There's absolutely nothing moral or fair about how a free market economy works. The only morality and fairness are that which we inject into it.
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KoM was using your metic, Lyr. Without any one of them, the company loses three million. So they're worth three million each, aren't they?
Anyway...
quote:Originally posted by Lyrhawn: I didn't sidestep your question, I answered it directly.
Why do you think people should not be paid with consideration to how much value they create for a company? What's to stop us from valuing labor that way, and what problems do you see with that?
If someone wants to do it, sure. I'm not saying it's somehow anathema. But.... What's the argument for why it is a good method? Why isn't it the norm? Why does it make more sense than paying people based on how much value that individual person brings? That would, necessarily, include a realistic assessment of whether or not they are replaceable. If they are, their individual contribution is definitionally less.
quote:Originally posted by Lyrhawn: And, for that matter, if you don't believe compensation should be tied to value, then I suppose you would support cutting CEO pay by like 90%? Or do you think they should get paid whatever since it doesn't matter if they actually are successful or if they drive a company into the ground?
Sure. I'm not stopping any company from doing that. So... Why aren't they? What's the advantage of doing so?
Do you think you're in a good position to dictate the pay of people at companies you have no stake in? Why?
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