Confessions of a Welfare Queen

[Bobo the Ape]

@carlos

semantics.fact: the bosses have a way better living than the workers compared to the relation a few decades ago.

The semantics statement was in reference to the makeup of compensation packages and their effect on the companys corporate balance sheet. Noone's disputing that CEOs (not bosses....bosses come in many levels) make more in relation to the average worker.

You are avoiding the issue! The guy at the top is earning more and more each year in comparison to the worker - who also earny more and more, but the percentage is going down.

My concern is with the average worker. If the CEO gets a %100 raise and the worker gets a %50 raise then the worker is still better off. Would it be nice if they all got the same percentage? Of course. But I'm dealing in reality here. How do you propose to stop the CEO from doing this? More laws? More regulation? Then they just find some other loophole.

Give me a working solution and we can discuss that.....rants against greed are worthless.

In case you weren't simply trying to avcoid the issue and really didn't get it:if you earn $1000 and the boss $2000, then you earn 50% of his wage.
Now, if you later earn $2000, you have doubled your wage - but the boss will be at around $10,000 - essentially you suddenly only earn 20% of his wage.
Woudln't it be fair if you earn more and he less, keeping the 50%-relation?

First of all we're talking CEOs here. The boss is the guy directly above you. And that guy does not make 415x the guy below him. If everybody made 415x the guy below him then all companies would be bankrupt. The CEO does not make 415x the guy directly below him.

As far as your main point, fairness, who's the decider of fairness?
Isn't it up to the company to decide what a given employees worth is? According to your formula if the minimum wage goes up and the janitor is now making 15% more then the CEO should get a 15% raise. It's only fair......

Tsk, tsk, the median will drop, but the average can easily stay high - juest give the some huge sums to a very few top earners..... (which is what happenes)

This is true.The US bureau of labor uses 5 different ways of figuring real (adjusted for inflation, taxes, etc..) median income. Two of them figured a slight drop from 1997 to 2002. The others remained about the same. Overall the trend is upwards though it does go up and down. Interestingly there were several drops back in the days when the CEO to worker income ratio was much closer. So the connection between CEO greed and median income is still unproven.

www.census.gov/hhes/income/incxrace.html

Or, when the cost of employment benefit gets too high, the company can look at who gets incredibly high benefits and cut them - i.e. the huge compensations for ex-managers who led the firm into near-ruin.

Many do.....and guess what? Many still have to lay off employees.
Many job cuts are the results of the company cutting back the scale of it's operations. When this happens the people in those operations get laid off. What should the company do? Keep people on the payroll who aren't performing any work?

Oh, great, you have the choice to stay uninsured - how nice of the company to let you!Why do they not pay it all (as most used to?). To give you the choice of not doing it at all? How democratic!

Here's an idea. Go to google and type in 401K. Now, once you've learned what it actually is then we can discuss the advantages and disadvantages of 401K vs. pension. Then you can tell me what a 401K has to do with insurance.

Interestingly, this is not true - in many middle-sized firms the total wage&benefits package (compensation on getting fired included!!!) is NOT a negligible percentage of the firms PROFITS!

Define middle sized. In many middle sized firms the guy in charge of the company is the guy who started it. Isn't this the guy entitled to the profits? Ultimately the people who receive the profits (board or private owner) are entitled to distribute them any way they see fit. Most companies put the profits right back in in order to expand the company and increase its stock value. That's where the real money is made. Not in salaries.

What firm is better off and is better for society:

Why would a company not be able to afford to offer stock? The reasons companies don't go into the stock market is to maintain more private control and not be subject to the same regulations as public companies. It has nothing to do with how much cash it costs (which is almost none)Most companies give their employees stock options. When the company goes public the employees receive a direct benefit. It's how many people move from the middle to the upper class.

What do you mean by better off? I don't know about the company that has no stock value and is barely making ends meet
even the smallest downturn and they'll be facing some hard decisions.

As far as the company that expands into Asia I guess the people in Asia are better off. Right now they're making $0. But I guess they should starve for your principles instead of taking a (to you...not them) low wage job.

You're using two ridiculous extremes.

My point, again,is that simply arguing against "corporate greed" is a pointless exercise. Find some actual concrete things that are wrong and propose real workable solutions.

Example:

In the US the minimum wage in real dollars is actually less than it was twenty years ago. The government has failed to adjust it in accordance with inflation. This results in an increasing disparity between median and minimum wage.

Solution......adjust the minimum wage in accordance with inflation.

 

[Bobo the Ape]

@storm

For example, the best engineers don't get moved out of engineering.

This I know for a fact! However, engineers are rated on technical expertise not on management skills. Being good at the hard sciences has little to do with managing people. As someone who has worked their way up from field tech to engineer (EE) I have to say that many engineers lack solid people skills.

Personally as an engineer I don't want a super technical manager always bugging me about the details. That's what the lead engineer is for. The manager is supposed to manage budgets, manpower issues, etc.......and represent the achievements and needs of the engineering group in meetings with the powers that be.

Most people go into engineering because they like the technology. Going into management and getting further away from the technology holds little appeal from them. If they enjoyed management they would have chosen a different path.

 

[carlosMM]

Originally posted by Bobo the Ape
bla....
Solution......adjust the minimum wage in accordance with inflation.

Bobo, your totally misunderstood part of my post (semantics - I was NOT referring to YOUR comment 'semantics' to a previous post), and you make a few very weird assumptions. let me name the biggest: money grows on trees!


if the worker gets 50% raise and the boss a 100% raise - that makes the worker relatively poorer. Yes, he has more money, but no, he is not richer! The standard of living will either go up faster then his wage as the average wage goes up faster than his or if the standard of living stays the same he will be less able to invest 'excess' money.

Fact is: % of income is taken from the poor and added to the rich. Where that leads you can read up in Marx (who was correct in his oservations, just not his extension of them to the future).

 

[stormbind]

@bobo

As may be but the point is that idiocy can result in greater rewards, at least financially, simply because the company doesn't want the idiot engineer to remain in engineering.

Engineering is the critical service, management is far less demanding yet ussually results in greater financial reward. The world is turned on it's head

The best people aren't guaranteed the biggest reward and that's my emphasis.

 

[IglooDame]

Originally posted by stormbind
@bobo

As may be but the point is that idiocy can result in greater rewards, at least financially, simply because the company doesn't want the idiot engineer to remain in engineering.

Engineering is the critical service, management is far less demanding yet ussually results in greater financial reward. The world is turned on it's head

The best people aren't guaranteed the biggest reward and that's my emphasis.

You must be reading too much into Dilbert. If the company doesn't want the idiot engineer to remain in engineering, they'll just fire him - one of the other threads here is talking about how hundreds of lower-tier employees are laid off when corporate boards are making millions, that idiot engineer will presumably get caught in a layoff, not promoted upstairs.

The star performers will either be compensated according to their worth, or they'll move to a company that is willing to do so.

I've done engineering and I've done management (and been paid about the same for both); each has it's demands and challenges and few people are equally proficient at both.

 

[Bobo the Ape]

@carlos

and you make a few very weird assumptions. let me name the biggest: money grows on trees!

Huh? Can you in some way back this up? I believe that money is generated through commerce, both between individuals and between companies. I do not believe that wealth just exists and is somehow owed to everybody equally.

if the worker gets 50% raise and the boss a 100% raise - that makes the worker relatively poorer. Yes, he has more money, but no, he is not richer! The standard of living will either go up faster then his wage as the average wage goes up faster than his or if the standard of living stays the same he will be less able to invest 'excess' money.

You keep speaking of "bosses" ,closet Marxist eh? The wage differences between the majority of management and workers has not increased over the years. We are speaking of the CEOs at the very top. This is an incredibly small percentage of the overall work force. It is so tiny that they have zero effect on the average standard of living. So yes, the worker getting the 50% raise is richer.

Why would he be less able to invest "excess" revenue? The facts refute you again. Right now the disparity between the ultrarich CEOs and the average worker is greater than ever....right now more average workers than ever have invested "excess" revenue.
How would you answer that?

Fact is: % of income is taken from the poor and added to the rich.

Now who's making weird asssumptions? How do they "take" it? Using actual numbers define rich. Define poor.

Where that leads you can read up in Marx (who was correct in his oservations, just not his extension of them to the future).

So his observations were correct as long as you don't actually apply them.

Look if you just want to rant about "corporate greed" and shout about "Death to the Rich!" rather than form an argument based upon facts and definition then you are certainly entitled to that.
You are also entitled to complain without offering any solutions.
You seem like an intelligent person and I thought we were having an actual discussion.

 

[carlosMM]

bosses: yes, I am talking about the CEOs and upper management levels. But here it is thus, that a factory floor wokrker today has less buying power than 25 years ago, while even entry level managers have more.

I won#t define anything as you very well know what I mean: the poor get poorer, the rich get richer. If you are to blind to see it and need exact definitions to the Cent I can only hope for you that you are rich.


now, the simple thing I was trying to communicate to you is: a very few people get a larger percentage of all the commerce generated (it doesn't grow on tree either, somewhere there must be a worker producing goods and a consumer buying them!). these few get richer, the others get poorer in comparison.

partial markets may grow, sure thing. but if you have a finite market (earth as a total is), then accumulating wealth means someone else gts less wealthy.

 

[Bobo the Ape]

@ storm

As may be but the point is that idiocy can result in greater rewards, at least financially, simply because the company doesn't want the idiot engineer to remain in engineering.

Why would the company keep the "idiot" engineer? Why not just get rid of him and give his salary to the greedy CEO? It sounds like you have a personal issue against management. Why would the greedy CEOs want incompetent people in positions of power? This would hurt the company and therefore the CEOs portfiolio. Are you saying that CEOs are more interested in putting incompetent people in charge than increasing their wallet?

If the main goal of the engineer is money then he is in the wrong field. That would make him the idiot. No engineers are starving. They make quite a bit more than many truly critical jobs (fireman,police,paramedics).

Engineering is the critical service, management is far less demanding yet ussually results in greater financial reward. The world is turned on it's head

Every department believes its the most critical. Without marketing noone knows about the engineers product. Without sales noone buys it. Without payroll noone gets payed. Don't get caught up
in that corporate politicla bs of who's the most important.....trust me it leads nowhere

The best people aren't guaranteed the biggest reward and that's my emphasis

Again.....best is a personal view. I agree with you but that doesn't make it a fact. As far as reward I've worked for two startup companies that were started by very brilliant (and very rich) engineers. In both cases they chose someone else to be CEO and made themselves CTO. They recognized their skills and limitations. There are many engineers out there getting well compensated.....you just may need a new company.

 

[IglooDame]

Originally posted by carlosMM
partial markets may grow, sure thing. but if you have a finite market (earth as a total is), then accumulating wealth means someone else gts less wealthy.

The amount of wealth is not fixed, it isn't a zero-sum game.

 

[stormbind]

Originally posted by IglooDude
If the company doesn't want the idiot engineer to remain in engineering, they'll just fire him

We have already been through this! Urgh.. you cannot just fire people. It's more cost effective to give them something else to do.

that idiot engineer will presumably get caught in a layoff, not promoted upstairs.

Certainly true in a recession but, and can't speak for you, but I would aim to prevent such a slowing in the economy

 

[stormbind]

Originally posted by IglooDude


The amount of wealth is not fixed, it isn't a zero-sum game.

Humn, that is the false propaganda of the seriously rich.

Wealth is not currency. Wealth is relative. A poor man in southern Spain could be said to be wealthier than a rich man in the 17th Century - simply because the rich mans wealth (his properties) are no longer of any value, they depreciated.

Increased wealth does not equate to an increased standard of living! It's a revelation!

There is only 100% of the currency in the world. That is a finite amount. A low income person has a smaller percentage of the wealth and thus lower standard of living, in some cases too low.

 

[carlosMM]

Originally posted by IglooDude


The amount of wealth is not fixed, it isn't a zero-sum game.

basically, it is. it is finite!

how so?

well, there is a max level of standard of living and production earth can bear indefinately. OK, a very long run.

But take the western world. the commerce we 'generate' can be traced back MOSTLY to highering the standard of living in thrid world countries. Once everyone is fed (OK OK simplifying here) and all resources are being fully used (not used UP) the market is NOT capable of growing anymore.

Sorry, I do not know how to explain what I mean in a foreign language well. What I am driving at is that redistribution of wealth is taking place while not 'enough' NEW wealth can be produced from 'outside'.
Social security ssytems can ameliorate that process, as can smart bosses by paying wages supporting enough consumer buying power to get their products sold indefinately.

 

[IglooDame]

Now I'm going to have to go hunt down my college economics textbooks so that I can do your (CarlosMM and Stormbind) arguments proper justice, unless someone else beats me to it.

 

[Bobo the Ape]

@carlos

But here it is thus, that a factory floor wokrker today has less buying power than 25 years ago, while even entry level managers have more.

Understood.....here's my point.
In the US the wage difference between the majority of management and the worker has not increased dramatically if at all. The huge disparity occurs at the executive level. But the numbers of people receiving these enormous benefits is so small in comparison to the rest of the labor force that it's impact is minimal.

The wage disparity to really watch is the one between unskilled and skilled workers. This can be quite large.

I won#t define anything as you very well know what I mean: the poor get poorer, the rich get richer. If you are to blind to see it and need exact definitions to the Cent I can only hope for you that you are rich.

Its fine to say "the poor get poorer, the rich get richer". But without a definition of rich this just becomes a slogan. In order to put forth a practical plan one must by necessity define them. If you say "Tax the Rich!" then you need to know whom to tax and how much. Do you see what I mean? I'm not saying you're wrong I'm just saying slogans do not get results.

As far as my personal situation I was born what I would consider poor (to a single parent raising two kids making under $20,000 a year) I have now worked my way to a fairly comfortable position in that I can support a wife and child and a household through my own small business.

This brings me to another point. In the US at least "Rich" and "Poor" are not traits that you are born with and live your whole life with. People move up and down through the economic strata all the time. I was poor at one time, now I'm not, I may lose my business and be poor again, I may succeed spectacuraly and become "rich". This is true of a lot of people.

then accumulating wealth means someone else gts less wealthy.

I don't necessarily agree with this.

Example:
I receive stock from my company. At this time the stock is not public and worth nothing. The stock goes public. I now have stock valued at a million dollars. I am now a millionaire. By your argument somebody lost a million dollars in order for me to gain it. Who lost it?

Sorry, I do not know how to explain what I mean in a foreign language well

No need to apologize at all. You speak english very well!

There is only 100% of the currency in the world. That is a finite amount.

By this argument and "the poor get poorer" argument then the poor should have been out of money a while back!

Also by this argument growth for one country means an equivalent amount of shrinkage for another one(s). So that a recession in the US should be accompanied by an equivalent increase somewhere else in the world. The US and the West is in a recession now (or was). Does this mean that the Third World became richer?

In reality recessions and booms usually are worldwide events.

 

[carlosMM]

OK, maybe the US is different, you have essentailly a 'slave class' of unskilled workers....

as for the stock: the money must have been paid by someone. Where does it come from? For each profit there must be a loss somewhere, unless things move in a circle (i.e. you consume for all your wage and that is true for all).

take this simple example: you have money in the bank. the bank pays you interest and lends out the money for more interest to someone else. all fine, creates jobs etc.
fine, but YOU get more and more money, and as long as inflation stays bellow your interest, NEW wealth must be GENERATED somewhere. Where? I am firmly convinced that the enitre earth and all its population is finite


as for: 'they should have run out of money' - well, they did and do! constantly. starvation is rampant worldwide. It is just that this effect has not fully reached the west yet!

also, social security ameliorate the effect a alot. If you read up oin the 'inventor' of the german Soc Sec system, Bismarck himself - well, he wanted them to keep the poor from revolting - poor, but not TOO poor!


OK, I am dreaming of an ideal wrold and that cannot be - there always will be fluctuations! But saying that the free market with shifting wage values as it is today in our CEO stockmarket world is OK is a bit much! Let them bear the responsibility (i.e. they must pay for mismanagement) and things are a bit different, but atm they always cahs in for hardly any work done - sach that clearly comes from people working harder.

how comes that in the 60s in the Western World a (skilled) factory worker could raise a family and own a home on ONE wage - today, I, as a studied scientist cannot even afford a proper 2-room flat on my inital wage, much less a 2 kid family and a nice car on the wage I will get the next 20 years!
things are similar in some parts of the US AFAIK, especially where property prices are up....



about the west in recession - interestingly, Chrysler makes a minus of one fully equipped E-class (around $60,000???) an HOUR!

Yes, they obviously pay part of that money to poor countries - maybe for the first time not TOTALLY ripping them off

and a LOT is money accumulated ina few bank accounts - a few billions make no diff to them, but spread over 100,000 families they would

 

[stormbind]

Originally posted by IglooDude
economics textbooks

Just don't miss out the part about depreciation of products.

Most economic models make the assumption that products can be collected and the currency remains in circulation which means more "stuff" for people. That stuff is counted as wealth, and this part of the theory is not wrong.

But they fail to account for the fact that "stuff" turns mouldy, breaks down, becomes obsolete... That is their massive flaw.

After the medium/long term, all that stuff has no value; it is no longer wealth!

Thus most economic models (especially those that protect uneven currency distribution) are false propaganda

If you took a very rich man in 1804 and prevented him from having any income for 200 years, his wealth disapears. This is an extreme example, but it shows that continuous currency flow is essential.

The same applies to poor people but on much shorter time scale. They need that continuous currency flow, and they need enough currency to buy "stuff" that doesn't depreciate emmediately!

Look at what the poor can really afford.

- They can buy food (depreciates emmediately)
- They can buy 2nd hand clothes (depreciates quickly)
- They can buy other consumables (depreaciates emmediately on use)
- They cannot buy a home or other investment
- They cannot buy stock to trade as goods
- They cannot buy "high end" equipment that depreciates slowly

So you see that the poor cannot benefit from the wealth multiplier effect that rich people use in their defence!

 

[Bobo the Ape]

OK, maybe the US is different, you have essentailly a 'slave class' of unskilled workers....

Do they teach this ridiculous anti-US propoganda over there? Again you back a philosophy with no facts.

But let's ask the UN what they think about quality of life in the US.

http://www.infoplease.com/ipa/A0778562.html

And how do they come up with this?

It combines thematic policy analysis with detailed country data that focus on human well-being, not just economic trends.

It seems that the evil American slave empire ranks higher than many of the supposedly caring nations of the world.

as for the stock: the money must have been paid by someone. Where does it come from? For each profit there must be a loss somewhere, unless things move in a circle

Yes....where does it come from? Could it be that markets can expand without taking away from somewhere else? So prove to me that an IPO is taking money away from someone.

fine, but YOU get more and more money, and as long as inflation stays bellow your interest, NEW wealth must be GENERATED somewhere

Yes it is generated. But that doesn't mean it was taken from somebody. Even in your example I don't see anyone losing money.

It is just that this effect has not fully reached the west yet!

There's been starvation and poverty since the beginning of humanity. By your argument that it keeps getting worse and worse we should all have died a long long time ago.

If you read up oin the 'inventor' of the german Soc Sec system, Bismarck himself - well, he wanted them to keep the poor from revolting - poor, but not TOO poor

Where does Germany rate on the standard of living again?

Let them bear the responsibility

I agree! Now let's get down to discussing a real and workable solution.

today, I, as a studied scientist cannot even afford a proper 2-room flat on my inital wage, much less a 2 kid family and a nice car on the wage I will get the next 20 years!

If as a skilled technical worker in your country and you can't afford a two bedroom flat in twenty years then I would say it's time to move! It can be tough in the US too but a skilled scientist can afford a two bedroom flat with 20 years salary....trust me.

 

[carlosMM]

Bobo, you are getting on my nerves here.

I have been in the US serveral times - I saw the slums with my own eyes. I know how wages are here - I simply compared that with what you claim it is like in the US.

and, for you totally uninformed statemnt on the standard of living in germany - may I inform you that all the states with good social security have a very high standard of living average, while those without (e.g. US) have a far wider spread in wages and also have slums all over the place?

where does your expanding market come from, hu?


get to see some of the worl before you make theories

 

[stormbind]

I too have seen the massive wealth gap in the USA. I was on the lucky side with the Rolls Royces and Lamboghinis and golfing resorts etc.. but I didn't have to go far to see poverty. People crowded into shoebox houses, awful rust-ridden cars, just sitting on the edge of the streets with nothing to think about except where the next dime will come from, no sign of prosperity but they all the youngsters still had *hope*.

I certainly lived much better in the USA than I ever expect to live in the UK, from my perspective the USA offered me much more than my homeland ever could.

But I know that the poor in the UK stand a better chance of making it out of poverty than those in the US. The homeless are probably the same in both nations, though we do seem to try and fail to correct that

The USA gives people hope, which is good. But it's a false hope and that's not fair.

 

[Bobo the Ape]

Bobo, you are getting on my nerves here.

I am? Or is it the facts that are bothering you?

I have been in the US serveral times - I saw the slums with my own eyes

Yes there are slums in the US. But it's obviously far from the norm. If it was so wide spread then why did the UN rank the US so high?

and, for you totally uninformed statemnt on the standard of living in germany

I'm simply presenting a fact.

may I inform you that all the states with good social security have a very high standard of living average, while those without (e.g. US) have a far wider spread in wages and also have slums all over the place?

You're the one who said in Germany that a skilled technical worker cannot even afford a two bedroom flat with 20 years wages! I'm only reporting what the UN (no friend to the US) has said.

I've been in 47 of the 50 states.....I assure you the slums are not "all over the place".

where does your expanding market come from, hu?

The fair and open exchange of goods and services.

get to see some of the worl before you make theories

I've seen plenty of the world. Get some facts to back up yours.

@storm

but I didn't have to go far to see poverty. People crowded into shoebox houses, awful rust-ridden cars, just sitting on the edge of the streets with nothing to think about except where the next dime will come from, no sign of prosperity but they all the youngsters still had *hope*.

Very poetic . Of course if you could see this huge mass of poverty stricken humanity then they could see you too. If this problem is so widespread then the cities should be in constant chaos with huge marches and riots going on all the time. Why hasn't this happened?

But I know that the poor in the UK stand a better chance of making it out of poverty than those in the US.

My personal experience, both mine and others I know, indicates that many in the US have made better lives for themselves than the ones they were born into. How do you "know" this happens more in the UK?

And if someone in the UK pulls themselves out of poverty then they must,by your previous argument, have taken wealth away from someone else either forcing that person closer to poverty or actually into it.

The USA gives people hope, which is good. But it's a false hope and that's not fair.

It aint false in my experience.