Wealth Distribution in the USA

You know, it was implicit in my post that I can't answer the question. This is why no-one hires me as a CEO. Well, it appears that Straggler's done that. Now, how about you answer a question --- if what you say is true, why doesn't every company fire its managerial staff and replace 'em with a Magic 8 Ball?Edited by Dr Adequate, : No reason given.

Have you considered the possibility that whatever you meant, it wasn't what you said? Or that it was sufficiently ambiguous as to be open to other interpretations?Anyway, I reread your post and to me it still reads the same way as when I read it the first time. But I'm not the type to insist forever that what you really meant is what I at first thought you meant, so if you're willing to clarify I'm certainly willing to listen.My point that you were responding to was that when a company builds a new factory in a low wage country that people accept employment there because it represents a better opportunity than what was there before. You sarcastically added figures to the quote of my text saying the difference was between $2.48/day and $2.50/day, but I'm sure you don't really believe that differences of $.02/day (less than 1%) carry any weight, and each new factory adds yet more better paying jobs that didn't exist before.The history of companies seeking cheap wage venues is that they eventually have to abandon those venues as wages increase because the population gradually becomes more affluent, better educated and more productive, greatly diminishing the incentives to accept low paying jobs and drying up foreign companys' cheap labor pool. Now, perhaps, instead of manufacturing Levi's they're manufacturing computer chips. Apple moves in and Levi's moves out, the country is better off.Since abusive practices was your focus let me anticipate your response and say that no one is in favor of abusive practices (such as the child labor violations of which Apple was guilty), but providing better paying jobs is not abuse.--Percy

Well, no, I don't. I do believe that raising the minimum wage does result in prices adjusting, but that isn't to say everything is pretty much as before. If you want to make the claim that certain and specific things do change, I would like to see the evidence to support that though. Again, no, I do not reject that. I asked if you could support your view with any studies you might have come across. I believe that this exit speech may well be connected to my challenging you to identify where I devolved this discussion into personal attacks and your inability to do so. You can let me continue believing that too, if you like. I'll remain ready to continue the discussion should you opt to respond.

I've already made my points clear and we're obviously not getting anywhere. To me you seem bent on unending passive/aggressive harassment based on your original interpretation of something I said, and to you I'm taking inexplicable offense at what were merely honest inquiries as to my meaning. Let's just drop it, okay?--Percy

You asked me to drop the 'passive aggressive behaviour' in Message 183. And I did, I dropped that entire line of discussion in Message 188. I did however challenge you because you engaged in a personal attack against me. Instead of an apology I received an unsupported tu quoque in Message 190.I'm not sure what else I could have done, but sorry if you felt harassed by me. I think I did everything in my power to rectify that by avoiding discussing that line as soon as you made it clear you weren't happy with it. Now, did I really start personally attacking you, or did I just 'harass' you? I don't think I did personally attack you, I just didn't understand a point you were making and 'politely' but 'persistently' sought some clarification on the matter. You just felt it was 'passive/aggressive' for whatever reasons. I didn't launch an attack against your character, but you took a swipe at me and Crashfrog in the same rhetorical blow. I feel an apology is only appropriate for that, unless you think that kind of discourse is what you want around here.Since I have dropped the harassing line of discussion, would you actually like to continue the other sub-discussions we were having? I suspect not, but since this is a discussion board, I'll re-extend the invitation to discuss by repeating my question to you

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What would you prefer: More employment, at wages that won't pay rent and food at the same time (ie., what happens when we let non-human market forces decide), or less employment at wages that do pay rent and food?

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I think that's a perfectly fair, and potentially fruitful question to ask in the context of this discussion, don't you?

Yeah, sure, you've captured my view perfectly. What I said was that in the vast majority of cases it isn't possible to calculate the worth of an individual job to a company, so where in all your verbiage is that calculation? What you actually produced was a description of how one might develop a case for needing more manpower based on the business impact of insufficient manpower. You also described an operational scenario. You didn't say anything at all about how to calculate the contribution to the company's value of a network engineer.I already perfectly anticipated your first scenario in the message you're replying to, but it's worth repeating since the fact that you answered as you did indicates you paid it no attention. What is the value to the company's bottom line of the newly hired network engineer? Is it the value of the potentially lost business? A proportion of it based on the total number of network engineers in the company? Of the total size of the network group? Of the company? Or should ongoing business be part of the calculation? To what degree?These are rhetorical questions, of course. The complex interplay between jobs and operational activities within a company isn't something that lends itself to quantification. The employees of a company working together produce products and/or services, but the actual contribution to the company's bottom line for any particular individual is not possible to quantify.Of course there *are* some businesses where the contributed value is easy to quantify, and I earlier provided the example of the diamond cutter. Investment banking is another example, where the business brought in by each partner is fairly easy to quantify. Firms that pay employees by piecework are another example. But these are not the norm. By and large most large companies are complex entities with a highly varied mix of job categories, most of which are essential to the company successfully carrying out its business, and none of which can lay claim to being more essential than others. They're all key to the company's success, and the degree to which each is key is not amenable to quantifiable analysis.There's an undercurrent of belief in this thread that businesses exploit their workers by paying them less than they're worth. That's why people keep arguing against the notion that the value of a job is the wage paid for that job. They want to believe that the job is worth more than the job's wage, and to support this they must also believe that the contribution to a company's value of an individual job is quantifiable, but it's not.The value of a job to the person holding the job and to the company hiring into that job is the wage paid for that job. The value of the job's contribution to the company's bottom line is something else and isn't usually quantifiable.--Percy

And picked up a new one.--Percy

Except that he hasn't. Did you notice any formula in his message?Come on, Dr A, what's the problem? Companies exploit workers because a job's value to the company is worth far more than what they're paying, and you want to prove it, so go ahead and prove it. Provide this formula!--Percy

It's simply a truism that businesses will pay the market rate to get a job done, I really don't see what all the bickering is about. Not many businesses will pay twice what it needs to to hire a janitor and not many janitors will work for half the rate he can get.The issue is more about what influences the market rates and, in my mind more importantly, what can be done when market rates are corrupt - which is pretty much the case with top end earners. CEO salaries are voted for by other directors who have an interest in making sure that director's salaries rise out of proportion to their 'real' value. Shareholder's - ie the company's owners - influence on this process is minimal to zero.Majority shareholder owners can, and do, pay themselves whatever they like - there is no limit except what the company can afford.Meanwhile both the Directors and the companies themselves hide their income behind tax shelters and contrivances so that their proportionate contribution to the society that they depend upon is negligible.So that now, we have the situation in the video, where the wealthy get to be better off year on year and the rest get to pay for it.

Please do not lie to me about what I wish to prove by reference to stupid nonsense that you've made up in your head. But my point is that I can't. That would be my whole point. I maintain that I can't steer a company to success any more than I can play the violin or dance the tango. I maintain that the managerial class of any company is better than me at making these decisions than I would be. I maintain that they have actual talent that makes them better as CEOs than if they hired me to do the same job.I maintain that the managerial class has a talent that I don't have, and that this is why they should be paid more than me. If you disagree, then I should like you to answer the question that I asked, namely: why don't they pay me the same amount of money to make really dumb decisions out of my complete ignorance of business? I could spew out ignorant ill-informed bullshit as well as the next guy, if you paid me millions of dollars per year to do so. I am not proud.

Oh, good grief, do you have this sentence on a hotkey? Give it a break. So I was wrong to assume that you shared the common viewpoint. So sorry. So is there a rationale behind your pursuit of this issue along with Straggler, or is this a purely academic interest? Possibly true, I don't know, but that special managerial talent doesn't include omniscience. They can't trisect an angle, either, nor quickly solve NP-complete problems. Oh, indubitably! So given your ignorance, why are you so sure this formula must exist?--Percy

Yes, I do have to say this sort of thing over and over again. Because on these forums it is usually my fate to disagree with creationists, who, as you know, base their arguments on telling filthy stupid lies about the opinions of their opponents.I do indeed have to spend so much time saying: "You are lying to me about my opinions", that if I were to "have this sentence on a hotkey" this would indeed save me a lot of time. But this is not a criticism of me, it's a criticism of the halfwits who repeatedly lie to me about my own opinions. I'm not completely certain that this is the case. But if it isn't, we should sack every member of the managerial class and replace them with a Magic 8 Ball, since that would work equally well. Either the managers can actually manage, or they can't. If they can, then they can at least approximately figure out the value to the company of an employee doing a given job. If they can't, then it would work out the same way if you hired me to do the same work as them for the same vast amount of money, and if I flipped a coin to make the decisions. So why am I not the CEO of GM?Edited by Dr Adequate, : No reason given.

Hi Straggler,I just noticed that we're probably talking about two different things. When you responded to me like this: I originally thought this was just a loosely phrased rebuttal to my position, but I see now that you're actually rebutting a different position than one I was taking, and I didn't realize it. You'll get no argument from me that companies make economic arguments to justify hiring proposals and decisions.What you said back in Message 174 was the position I thought you were still pursuing: But a company does not know the economic benefit on a per-job basis. There's never any proposal that ever says anything like, "If we add another network engineer at a cost to us of $235,000/year we'll reap additional value of $317,000/year."That was my point. It's nothing controversial.--Percy

And will you also admit that they are at least approximately capable of doing so?

I never argued otherwise, and it is clear that you still don't understand that this is not the same thing as what you referred to earlier in your Message 207 when you said: No, they can't "approximately figure out the value to the company of an employee doing a given job." Some jobs directly contribute to products or services, some don't. Some employees are directly involved with the product or service, other employees are receptionists or night watchmen. Anyone arguing that, for example, product designers should be making more money is forced to argue by the same logic that receptionists should be making less. But salaries are not set this way. They're set by market forces, not by some fictional calculation of a job's contribution to the company's bottom line.So of course management can make arguments like, "If we hire another network engineer then we assure ourselves that we'll complete the project on schedule and will be able to collect the one million dollar on-schedule completion bonus built into the contract."But you'll never find an argument like, "If we add another network engineer at a cost to us of $235,000/year we'll reap additional value of $317,000/year, adding $82,000 to the company's bottom line." But apparently some people here believe this is possible, that companies actually do this, and they further believe that a job's contribution to a company's bottom line is far more than a person is actually paid, and that therefore companies are exploiting workers.This belief that companies know a job's contribution to the company's bottom line is false much more than just because that value cannot be calculated. Let's look at what the effect of paying people according to a company's bottom line might be, which we can do if we just average across all the employees. Let's say the year is 2008 and the company, which has 1000 employees, lost $100,000,000. Since the value created by the company is negative $100,000,000, or $100,000/employee, we have to deduct $100,000 from the average employee's compensation. Everyone is unhappy.Now say the year is 2012 and the company made $100,000,000, or $100,000/employee. We have to add $100,000 to the average employee's compensation. Everyone is ecstatic!Most people would never join a company where they would be subjected to the possibility of these kinds of wild salary fluctuations, but such opportunities would never present themselves because we've left stockholders out of the equation, which is a big, big no-no. Both the losses and the profits belong to the stockholders, not the employees. The stockholders are the ones who bear the risk of ownership, not the employees. That's why it is shareholder value that rises and falls with a company's fortunes, not employee salaries. So not only is there no way to calculate the specific contribution in value to a company's bottom line of any specific job, there's not even any motivation to do so. No one asks, "How much will creating this new position contribute to the company's bottom line." Rather, the type of question management attempts to answer when hiring is, "Will this enhance the company's competitive position in the industry?" And the analysis can be quite quantitative.In my own industry, software, when we decide to expand our product line we hire software engineers, product validation engineers, release engineers, product engineers, marketers and salespeople. The economic justification for all this hiring is done at the product level based upon sales projections (not an exact science), not at the individual job level.And when we expand by just a single person it's because product revenue justifies it, not because someone has calculated how much additional value the new hire would add to the bottom line, because that just isn't possible or meaningful or useful.--Percy