Top 1% of Americans Get Largest Share of National Income Since 1928

Well one soloution that was done in American society and which brought us the middle class and the weekend was the labor movement. For those from Texas, you just don't understand. Not many unions here, so you don't understand that big Texas employers paid their workers union scale to keep out the unions. This helps greatly with income distribution.

Of course, organized workers are in one sense an infringement on the labor market. However, once you get past simplistic econ 101, and its variations detailed in many forums fromthe Houston Chronicle biusiness section, Rush LImbaugh, traditonal MBA programs etc. it is a good thing for society and dsitributes income from the upper 1% to the middle 50%.

 

One thing that seems to be true, but is never mentioned in these discussions is the fact that CEO salaries get larger each year as a multiplier of their lower level worker.

CEOs make something along the lines of 43 times as much as the entry level workers. As companies merge and are acquired, there are fewer top level executives and their compensation rises and the number of competitors drops and the profits rise. As that occurs, the upper 1% has their salary rise.

I am not sure that Bush (or any other president) will have that much effect on this phenomenon.

 

It is also largely why the American auto industry is in the tank. The US automakers pay substantially more than their Japanese and German counterparts. So in order to produce a product with similar features at a competitive price, they use inferior interior materials.

While labor unions are great for making sure that workers are treated fairly (my grandfather was a longshoreman for 40 years), they are a double edged sword in a world economy.

 

You left out a digit... probably higher now...

 

We already do re-distribute from the top to the bottom, the question is how much. Also this re-distribution is for incomes not wealth, which means it will hit those who are hard working top earners the hardest, not those who are sitting on 10 million inheritance/trust fund.

 

I think we're at an interesting point in this society. I work at a union plant and just left another union plant. We have union workers that make $125K-$175K with overtime and could make more. The workers are with the highest skill level that they ever have. On the other hand, the salaried personnel has really high turnover and little specific expertise. The Union workers really have the company by the short hairs. They could strike for even more money and the company would have to oblige. But they make too much money and are too comfortable to strike. So the company (with 10+% increases in profit), gives the union 3.5% raises every year, and striking never enters their mind.

 

The AMT sucks. I'm all for paying higher taxes to fund social programs, to pay for the war, even if the one in Iraq was rank idiocy, to insure every American has health care, and so on. The AMT, however, is unfair and out-dated. Our income puts us in that ballpark.



D&D. Taxes in Space.

 

It sure does suck, they are still using figure from prehistorical period.

 

what industry do you work in?

 

Chemical.

 

I think that jobs like that are statistical outliers because of the nature of the work. Like you say, those guys are extremely skilled and they work a lot of hours to reach those income levels. and working in a plant is always dangerous.

there are alot of jobs like that in the petrochem industry but that's a small fraction of the workforce.

 

I don't see anything wrong with a CEO getting paid 430x more than an entry level worker. Obviously the CEO is more talented, has a greater set of skills, has more knowledge and has put in more time and effort into his/her career than an entry level worker.

Furthermore the level of stress of a CEO cannot be compared to one of an entry level worker.

The CEO doesn't appoint his own salary, but is governed by his/her respective Board members.

Companies have been bringing in record profits these days, and thus if a company earns 1B in profits, I don't think it is abnormal for a CEO to earn upwards of 50MM in salary or more.

 

One of the great reasons to keep the estate tax.

 

There are only so many hours in a day and a lot of entry level workers put in as many or more hours than management. When I started out in architecture I regularly worked 10 hour days drafting while the firm's principal showed up for 2 hours. For that matter without the entry level workers actually producing management and ownership have nothing to make money off of.

Regarding unions I agree with Refman that they are a double edgd sword. Certainly workers should have the right to organize and maximize their negotiating power. That's basic capitalism there since in a market you should be able to get as much as you can for your labor. What makes unions problematic though is when they consider their labor more valuable than the survival of ithe business. For instance Northwest Airlines mechanics went on strike two years ago. Northwest was in very poor shape economically and headed for bankruptcy. The mechanics though stuck to their guns as opposed to United and American mechanics who agreed to take pay cuts to save the company and keep their jobs. Northwest declared bankruptcy fired the mechanics and outsourced. Now those mechanics who went on strike are SOL and their only hope is that Northwest officially rehires and then lays them off so they can collect unemployment.

While workers should be able to organize and leverage their collective power they have to be realistic about the economics of their industry.

 

The stat is not compared to "entry level," but non-management and your statements are anything but obvious. Let's look at a drug company. You really think the CEO has put in more time, is more talented, has more knowledge, and has a greater set of skills than a research physician with a post-doc? Or how about an automobile company... can you make that statement regarding a safety engineer? If there's a downed KV line in my neighborhood, I don't want the CEO of the power company anywhere near that thing... I want a guy who has the education and experience to deal with activated high voltage lines.

You're kidding right? So the level of stress a guy feels when he has to make choices between a house payment, his kid's education, the care of his elderly parents, and health care is nowhere comparable to the stress a CEO feels?

Naive. I'm sure most CEOs don't have any influence on their salary or stock options.

Abnormal? Maybe not. Excessive? Yes.

 

Ya, the CEOs are so great that they ran the auto industry and many other manufacturing sectors into the ground. Their European and Japanese counterparts makes one tenth the multiples. Ya if you are performing real well for your company, I can see them making the big bucks, what about when they under perform? Do they all take huge paycuts? It look like it doesn't matter if the company is doing well, these CEOS are always making money some where.

 

^ Heck, some CEO's who do a terrible job still get big payouts just to get rid of them.

 

I've always wanted to see the CEO (and other executive) pay statistics divided up between founding CEOs and hired CEOs. No one should begrudge Dell paying Michael Dell a huge salary or Microsoft paying Bill Gates a huge salary. Those companies are successful because of those people's leadership. If a CEO has been promoted through the company with a good management record, that CEO deserves a higher than average salary. But if I'm invested in a company that pays ridiculous salaries CEOs that don't perform well, I get out of that company. It really bothers me when CEOs run several companies down and still get high paying executive jobs because of connections that they have on boards of executives.

 

I think the arguement that CEO's don't work as hard is silly. They work hard. Very hard. And their efforts generally have a greater impact on the 'bottom line' and success (or survival) of a company. Ever seen a comany without good management? Doesn't matter how brilliant the rest of the group is, that company will fail.

But...

430X???? Why not 1000X Why not 50X?

Something's not right. The boards base their salary recommendations on what other CEO's are making. And it gets laddered up. And the shareholders (generally pension plans) pay.

Maybe a salary cap and max salaries are in order???

But...aside from that... The earnings gap between 'middle class professionals' and other workers is also growing. The guys making $250K to $500K. In California, in many neighbourhoods, teachers, policemen, hospital workers, etc cannot afford to live in the neighbourhoods in which they work.