The myth of hard work and meritocracy.

[Crezth]

Things are different in America with regards to salaries. These CEO's think they deserve to make as much as a football star. And why not? Why does someone who play 16 games a year deserve to make more than a CEO?

Football player salaries are defended by classical economics, as are CEO salaries. The value is whatever people are willing to pay.

 

[illram]

The spreading of this myth is one of the only ways the Republican party can maintain support amongst middle and low income voters for their economic policies. "You can be rich too!"

Although the Democrats also vigorously support policies that make the rich richer, they have an easier sell since they still want to tax them and provide assistance to lower incomes.

 

[Core Imposter]

I lived through the Carter and Reagan years. I saw upward mobility across the spectrum. No myth. We should figure out where we went wrong.

I think the answer lies in the consequences of a global economy.

 

[Cutlass]

Not to mention the election of Reagan.

 

[WindFish]

I lived through the Carter and Reagan years. I saw upward mobility across the spectrum. No myth. We should figure out where we went wrong.

We already did discover where it went for the Anglo-American economy.

Its called Reaganomics/Thatcherism.

 

[Leonel]

The spreading of this myth is one of the only ways the Republican party can maintain support amongst middle and low income voters for their economic policies. "You can be rich too!"

Although the Democrats also vigorously support policies that make the rich richer, they have an easier sell since they still want to tax them and provide assistance to lower incomes.

The way you phrase it, it sounds almost like a pyramid scheme.

 

[Core Imposter]

We already did discover where it went for the Anglo-American economy.

Its called Reaganomics/Thatcherism.

How old are you?

 

[WindFish]

How old are you?

Old enough.

 

[Bamspeedy]

How does one explain this:

Why can't the US outsource some of these CEO jobs as something is obviously wrong with the free market in CEO labor.

You're right - the graph isn't numerically accurate:

source:
http://www.politifact.com/truth-o-m...facebook-post-ceo-worker-pay-ratio-has-obscu/

So, perhaps not as much as 475:1. But I don't think the revised numbers are any less egregious. Yes, the chart as posted is an exaggeration, but not by much.

Define 'CEO'.

CEO of the top 100 companies, top 500 companies or CEOs of any company with more than $100,000 in profit? How does the top 100 companies in the USA compare in size to the top 100 companies in another country?

According to one 2005 estimate the U.S. ratio of CEO's to production worker pay is 39:1 compared to 31.8:1 in UK; 25.9:1 in Italy; 24.9:1 in New Zealand.[

That sounds more likely. Higher than Europe (twice as high), but not 20 times higher, such as in the chart.

In 2007, CEOs in the S&P 500, averaged $10.5 million annually, 344 times the pay of typical American workers. This was a drop in ratio from 2000, when they averaged 525 times the average pay.[7]

A 2012 report by the Canadian Centre for Policy Alternatives complained that the top 100 Canadian CEOs were paid an average of C$8.4 million in 2010, a 27% increase over 2009, this compared to C$44,366 earned by the average Canadian that year, 1.1% more than in 2009.[19

I don't know the average size of the top 500 companies in the US or the average size of the top 100 in Canada, but I could see where the CEOs in the US earns double, but not 20 times their counterparts in Canada.

 

[Traitorfish]

There isn't really any "moral debt" but no one owes you anything either. When you begin, you don't have any connections or experience and you don't know how to system works. Those things you have to work through and learn before you can be on the other side. Most people really suck at learning and grasping these concepts. Hard work is only part of the formula for success.

So I was right in suspecting that the talk about "paying your dues" was just an empty platitude to Protestant moralism?

 

[Marla_Singer]

If CEOs or others have big revenues, good for them. However, the thing I find the most irritating in the myth denounced in this thread is when it's reversed : "because I earn a lot of money, then that means I work harder and I'm smarter than others". This is utterly wrong and still vastly widespread.

Generally that myth is very strong in professions which are money-focused, such as banking. Many people decides their carreer according to other criterias than money: they just want to build something or be useful. That doesn't mean they are soft-workers or stupid.

 

[Birdjaguar]

your not gonna ruin your spine by reading contracts, will you?

Arguably that depends on your posture.

I have a great chair!

How does one explain this:

Greed.

"Our top 500 executives earned $4.5 billion last year. How do those dollars break down?"

http://www.forbes.com/lists/2011/12/ceo-compensation-11_land.html

 

[Bamspeedy]

Greed.

"Our top 500 executives earned $4.5 billion last year. How do those dollars break down?"

Greedy, sure.

Average of $9 million for the top 500 executives of multi-billion dollar companies.

Don't pretend other countries are 20 times better. That is what is misleading about that graph.

So let's spread the wealth then to the employees. If the company has 100k employees, that $9 million can be spread around to them at $90 each.

 

[Cutlass]

Well the point is that the executives in other countries that don't make those super salaries tend to be better for their companies than American executives.

 

[Bamspeedy]

Well the point is that the executives in other countries that don't make those super salaries tend to be better for their companies than American executives.

They could show that by showing more honest numbers then (for example showing the US as double other countries rather than 20x).

Otherwise it gets discarded as partisan trash.

 

[Cutlass]

They could show that by showing more honest numbers then (for example showing the US as double other countries rather than 20x).

Otherwise it gets discarded as partisan trash.

Well then demonstrate what the numbers should really be. Find an apples to apples comparison.

 

[Traitorfish]

They could show that by showing more honest numbers then (for example showing the US as double other countries rather than 20x).

Otherwise it gets discarded as partisan trash.

"Partisan"? As if the Democrats were actually running on an anti-1% platform?

 

[Bamspeedy]

Well then demonstrate what the numbers should really be. Find an apples to apples comparison.

Finding two companies of exactly the same size would be time consuming and anectdotal. I mean I could pick Costco for the US and then pick a similar sized company in Europe who has a high paying CEO.

The CEOs of companies in other countries are fools if they don't try to take their skills to the US where they supposedly can multiply their income by 20X.

This article claims the US is 4 times the difference compared to Europe.

That won't be anywhere near enough to close the gap between Europe, where CEOs make about 25 times the average salary of their employees, and the U.S., where the ratio is more than 100 to one.

http://money.cnn.com/magazines/fortune/fortune_archive/2006/07/10/8380869/index.htm

And I already posted the Wiki that shows the US at 39:1, the UK at 31:1 and other countries at 20+:1 or in other words, double.

So 4x is high, 2x is low, so 3x is about right. Makes more sense than 20x.

It all depends on how many companies you want to include in the 'average'.

 

[peter grimes]

The CEOs of companies in other countries are fools if they don't try to take their skills to the US where they supposedly can multiply their income by 20X

There's a lot more than just salary that goes into a person's decision to move. Just because we don't see a bunch of Dutch CEOs flocking to the US doesn't mean they're fools.

 

[Bamspeedy]

There's a lot more than just salary that goes into a person's decision to move. Just because we don't see a bunch of Dutch CEOs flocking to the US doesn't mean they're fools.

That's why I wouldn't blame them if they don't move to double or triple their income. I know money isn't everything, but multiplying their income by 20x would be a pretty strong motivator for many of them.