CEO vs Workers Income Gap

https://inequality.org/facts/income-inequality/

For those curious why CEO pay started to explode in the 90s, Planet Money has a great podcast going over the mechanics of how that came to be. https://www.npr.org/sections/money/2018/06/22/622646316/episode-682-when-ceo-pay-exploded

I learned a long time ago that it is never a good idea to count other people's money.

Wealth is what you are born into, one didn't have much to do with it. However
Year after year multi-million dollar income is money that is "stolen" from workers, that are paid an unjust wage.
It could also be said that it is stolen from consumers who are charged an unjust purchase price.

Before Mom&Pop supermarkets owners used to be paid 20x the avg worker.
Now after merger/market takeover. They are hired as Store manager making 20x the avg worker.
But now also forced to extract even more money from workers to send to headquarter (CEO/owner/district manager/regional manager)  

http://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

I really wish people would switch from using averages to using median values.  They tell the story much more accurately (and show the situation to be even worse).

What does all this matter?

There are so many things that I have no control over in my life. I have no control over what nationality I am, to what parents I was born to, to how poor they were, to where I was born and brought up,...I could go on and on about difficult situations in my life that were unfair, unfortunate, or labeled me as poor and dumb...and thus I could whine and whine, but the truth of it all is, none of that matters.

What matters is that today, in 2018, I can make choices for myself in a free country that allows me to prosper.

I have done that, by staying out of debt, building my own houses, retiring early, and using time instead of income to build net worth.  There is a host of other things, but it all boils down to doing something about my situation to change it for me in a favorable way.

Today people want to complain and compare, instead of acting.

Tired of making 20 times less then a manager? Then be a manager. It really is that easy! It is a free country. But wait, people want the money of a manager, but do not want the resposnisbilities of a manager, or in terms of farming, they want the money a middleman would get, but not do the work a middle man does...being a cattle dealer for instance.

Or in another example, people want to escape the city and be on a homestead, but whine and complain that they cannot afford to buy a farm. REALLY? Are these people getting off their duffs, getting out on the back roads of rural America and asking about the litany of farmhouses that are abandoned? Most are not listed, but if people approach the right people, deals can be made in private sells, financing and leases. Sure there will be 50 no's before someone says yes, but people are not willing to do the work, or fix the farmhouse up, or put up with soil that is less than 100% in PH levels and NPK. Sure a realator can find all that for you, but its an expensive (and often unobtainable way) to get there.

It is interesting that this is on the Ulcer Factory because that is just how ulcers are formed: people dwelling on issues. The antedote? Stop the dwelling and doing something about it.  

Travis, I don't disagree with anything you have written.  That said, I see this a little differently.  The bootstrap theory does work for some people but for some, it's not an option.  Not everyone can be successful that is just the way it is.

 What concerns me more than an individual having the ability to raise themselves up is the breakdown of the system.  

I fear that the disparity in income is a sign of something much larger and more sinister.  

When I look at things like the way laws are made in this country,  how decisions are made about what scientists can research, the condition of our food system, The condition of our educational system, the condition of our drinking water, the way we dispose of hazardous waste, the way media does or doesn't cover issues, where taxes go, where subsidies go, the ability of a country to be at war continuously for over 100 years, the exponential increase in lobbyists, the movement of politician to and from corporations,  the ability of a country to go to war to make money,  the erosion of our constitutional system, a corporately run prison system where states build more prisons than universities, a country where children are killing themselves, a country of self-prescription of medication.   Corporations are not in check and they run our country.  Corporations have no borders and that isn't a good thing for a sovereign nation.  There are two sets of rules, one for the corporations, and one for the masses.  We are told what to think on a regular basis and we buy into it.  Part of the problem is materialism.  I'm not a religious person but to a certain extent we have done away with spiritualism and put in its place a golden calf.  A corporation is not a feeling thing, it's a machine built with one end goal,  profit at all cost.  Consider this, those machines are building our future.  It's not just in the U.S., this is a global issue.
 
I wish people would stop reacting to hot-button issues and start paying attention to what is really going on.

We are on a path to much less freedom than we had before and it is getting worse.  

I don't think we are in a terribly free country anymore, if we ever were. That's just rhetoric.

This kind of information is useful in deciding to what extent you want to engage with modern economic society. Some people want to work in the system and some people choose to work a different way, because they know the system is rigged.

I could just as easily say when people lose their retirement due to companies folding or a stock market crash that it out of your control so why worry about it.

We all make choices, more information is always better.

This is a problem. The historical outcome of this kind of inequality is revolution. How do we bring this about without the accompanying collapse?

-CK

I would guess that industry consolidation is the reason for the gap. This is my gut talking, i cant back it up. When you go from 1,000 mom and pop stores to one walmart with one ceo, of course the numbers will be skewed. If the ceo is now accountable for 1000 stores instead of 1, should his pay be higher? More headaches, more responsibility, etc.

If you were paid to harvest cucumbers and the farmer had 3 more fields compared to one from last year, wouldnt you want more money?

To follow that up, a percieved unfairness can be quantified using math . Take the excess pay and divide it out by the total number of employees. I dont know the answer (never did the math).

If the overpay amounts to $10 extra a year per employee is it a blatant underpaying of employees? $10 a week? $10 a day? $10 an hour?

I guess im asking what real impact would it have if it was redistributed. At my low point you might say the pay is unfair but would make little/no impact on the employees.  As the scale moves up the impact increases.

The math may say the anger is warranted and some rebalancing is warranted.  It may also say its actually minuscule.

I am not sure about what the exact numbers look like.
But the usual 80/20 rule applies.

80% of the population/workers is clawing and struggling for a tiny 20% of the money.
While the top 20% of the population is sitting on 80% of the money.
It's not just a America/Western 1st world problem.
It seems like the 80/20 rule is pretty universal and it happens in "every" country.

But I say that it is mostly okay. Studies seems to say that as long as I make $80,000/yr I will be super happy.
Also life is all about being like Jesus/Buddha/Holyman X and suffering so I rejoice at the injustice in life and live for my future afterlife with God+Holy People.
I am being a bit cheeky but seriously I dont want to be apart of the rich 20%.
In fact I want to limit the amount of off site money and working that I have to do.
If I could have my housing, heating, food, water, sewer, etc, etc all done with as little money being traded, that would be best.

The 80/20 probably applies when referring to all workers. I may have taken the topic too literal. I compared ceo's vs all other workers. CEO's are such a small % of the total workforce. Because of that, i speculate that a division of a ceo's "excess" pay (divided among all workers) might be very minimal.

Part of the reason for larger salaries may be that the CEO's are simply on the top of much larger pyramids.  If you own a company with 100 employees, you simply can't bleed as much off for yourself as you can if you have 100,000 employees.  The last 20 or 30 years have seen lots of companies coming together under larger and larger corporate umbrellas.  Another reason may be that the CEO deals only with the upper management just under him and other CEOs.  He doesn't rub shoulders with the unwashed masses and doesn't really see the disparity between his pay and the janitors.  Instead, he sees the disparity between himself and that other CEO who just got a big raise, another yacht and a new trophy wife with a mistress or two on the side and thinks "I do a better job than him, I need a raise!"

Everyone has a right to basic necessities.  Then we can argue what are the basic necessities.  I'm not sure internet, a cell phone, or a tv are necessities.  The "poor" in the US are almost all in much better shape than the "middle class" of a few centuries ago (clean water, flush toilets, reliable food sources, better medical care, less violence, easier access to education and libraries).  When I was getting my engineering degree, the vast majority of my classmates were from east Asia, the subcontinent or the middle east, with a smattering from africa, south america, and maybe an odd european or american in the bunch.  When I talked to them, I almost never found any of them who were willing to go back home.  When I pointed out how, with their education they could help their countrymen and would be in the top levels of society they were unmoved.  The general response was,"So what, I would need to hire a bodyguard and put up with 5 power outages a day.  I can have a much better life as middle class american than a rich man in my home country."  This was so even though most of them were from wealthy, connected families (street kids from India rarely get to come to the US and go to college, it takes money and connections)

I don't think things are much different in most of the world.  In almost any society I know of that is larger than the village, there are the really rich and the poor (even a village chief is usually in a lot better shape than the poorest villagers).  The wonder is that in part of the world we have a group in the middle.  So let's not burn the house down because someone else is setting closer to the fire than we are.

That said.  I am not a fan of corporate greed.  I agree the CEO and upper management salaries are rediculous.  It's not a new problem.  It's pretty much a problem in every culture (beyond subsistance farming or hunter/gatherer).  Not sure how to fix it.

I think Mick nails it. The "problem" is just people being people. As the alligator said: "We have met the enemy, and he is us!"  I can see where perhaps one might wish to change our "cultural wiring", annnnd... we're already working on it!  That's what our constitution, churches, organizations like the BoyScouts, etc. etc. are all embarked on. Doesn't seem like there would be  harm in additional effort all around, however...

As somebody who once did invoke some serious events that affected the whole world (but I don't actually know if I, or even he, would claim he _changed_ the world) said: "The poor will always be with you." And I just read an article in this month's Atlantic which described the philosopher Nietzsche's argument that health in human beings is NOT  the same as comfort. That pretty much sounds right, to me and correlates well w/my personal experience. There's always going be lots of folks seriously upset about something, and often with good reason.

And a last quote (not sure to whom to attribute this... anyone?): "Virtue begins at home." Which Permies is taking a stab at right as we speak.

Cheers
Rufus