Random observations on value and reward
Years ago, when I had some cash to spare, I used to play the stock market a bit. The $2,000 profit I made by making one lucky guess and two phone calls was taxed at a lower rate than the $2,000 I worked a month of eight-hour days to earn.
If every corporate executive in the country went on strike for a month, and every garbage collector in the country went on strike for a month, which absence would cause more actual problems?
When a company's Senior Executive Vice President of Something Frightfully Important quits, there is usually an exhaustive and expensive search process to find a replacement, lasting several months, during which the job stays vacant. When the accounting department's receptionist quits, they get a temp in within a day or two -- because that's something they actually can't do without.
I do not begrudge the fact that my immediate boss makes more money than I do. Managing people is genuinely hard work. And when she takes a week off, we feel the lack. But what are the guys up on the commanding heights doing for their huge salaries, that their jobs can be left unfilled for months with no noticeable effect?
If people were actually rewarded in proportion to the value they contribute, medical researchers would be taking home the seven-figure bonuses, and the titans of Wall Street would be out on the streets panhandling for enough change to buy the night's bottle of Thunderbird.
If every corporate executive in the country went on strike for a month, and every garbage collector in the country went on strike for a month, which absence would cause more actual problems?
When a company's Senior Executive Vice President of Something Frightfully Important quits, there is usually an exhaustive and expensive search process to find a replacement, lasting several months, during which the job stays vacant. When the accounting department's receptionist quits, they get a temp in within a day or two -- because that's something they actually can't do without.
I do not begrudge the fact that my immediate boss makes more money than I do. Managing people is genuinely hard work. And when she takes a week off, we feel the lack. But what are the guys up on the commanding heights doing for their huge salaries, that their jobs can be left unfilled for months with no noticeable effect?
If people were actually rewarded in proportion to the value they contribute, medical researchers would be taking home the seven-figure bonuses, and the titans of Wall Street would be out on the streets panhandling for enough change to buy the night's bottle of Thunderbird.
posted by Infidel753 at 12:53 PM
15 Comments:
I hadn't considered that perspective, but you're dead-on!
I begrudge your boss making more money than you.
As a former union rep I'm fully aware that the 'management class' consider themselves important whilst the 'workers' are replaceable.
I doubt it will ever change.
If I thought for one iota that I'd get away with it I would cheerfully shoot managers across the board without a moments hesitation.
They've got kids and a wife? Tough. They'd have a widow.
Yet to meet a manger who isn't a total arsehole who, frankly, deserves to die.
Perhaps I need to be a communist...;-)
Hmmm certainly brought I lot of happenings in my life to bare.
Perhaps a company like Walmart should listen up.
Well, having a lower capital gains tax rate on small investments isn't necessarily a bad thing -- it gives the middle class a way to make up for the fact that, over the last 30 years, C-level compensation has increased by 4-600% or something, while working class wages have stayed roughly the same, adjusted for inflation. Well, ok, it would be a good thing, if investing in the stock market was a good idea for small investors to do, which it used to be, but these days, not so much. Rampant, barely-regulated fraud has made it a game that only pays off for the ones rigging the system.
And yes, that's an overly-pessimistic view, but, it bothers me that the practice of buying stock in publicly held companies has been so wrecked with high-level manipulations of valuation, and the resulting volatility. In theory, it should be a good thing to build a successful company and then take it public, generating operating captial and allowing investors to benefit from their participation. But tell that to all the people whose 401k balances were wiped out when the market tanked.
And as to the whole C-level corporate officer overcompensation thing, it just makes me sick. It's almost like a priesthood, an exclusive brotherhood whose mysterious ways are beyond the comprehension of the mere mortals who toil in the cubicles.
It gets harder and harder to imagine this increasingly feudal system getting fixed. We need to put some serious regulations, including but not limited to caps on top level executive compensation vs. lowest salary level. But that'll never fly, because the unwashed masses tend to identify with these top level people, because they're deluded enough to think that might be them someday, and when they get there, they'll want special privileges.
Sorry to ramble on so. These things bug me, especially since when I was young, it was pretty much a given that middle class people could work hard, save, invest, and prosper -- and now, it's basically a crap shoot. You might be able to maintain a comfort level, or you might lose your retirement savings, get laid off, and end up living in a van down by the river.
TC: Thanks -- I had a feeling this one would elicit considerably broader agreement from readers than some of my other posts.
4D: In the case of the job I quit three years ago, I'm inclined to agree with you. It paid more than the job I have now, but I left because the managers were, basically, psychos. The amount of bullying and fighting that they subjected each other to, never mind the employees, was scary.
My current boss is a decent sort, though.
It sounds as though your experience has been worse -- a British thing, perhaps? Or, didn't you formerly work at Heathrow? I've long been convinced that being evil is a formal qualification for managing an airport.
Tim: Unfortunately if they did that, they wouldn't be WalMart any more.
GL: Unfortunately many middle- and working-class people never have enough spare cash to invest in stocks or other capital-gains-type opportunities. If one wants to help working people, surely it would be best to cut or eliminate income taxes on their wages, and compensate by increasing taxes on capital gains -- most of which are received by the wealthy, and are a reward for guessing well (almost like gambling winnings) rather than work.
The value-subtracting effects of irresponsible capital speculation after de-regulation let it run wild have surely been substantial, including as they did nearly wrecking the economy of the entire planet. I doubt I'd have much interest in getting back into such a rigged game now, even if I had the money. Not unless much tighter regulation is put back in place.
An increasingly feudal system? Well, Four Dinners mentioned Communism.....I've always said that socialism -- measures like Social Security, Medicare, worker protections, anti-trust laws, and so forth -- is a sort of vaccine against Communist revolution, since it prevents the situation from getting so bad that things explode. But contemplating the Wall Street "priesthood" and the damage they've done, and the arrogance they still display, I do sometimes feel that socialism isn't enough, and we should be sending them all to labor camps in the Arctic Circle.....
Hmm, not sure about the Arctic circle ... I'd worry they'd take up clubbing baby seals for entertainment.
I'd really rather bring back the stocks -- not the stock market, the old-fashioned kind, the wooden ones you put up in the town square and you chain up your criminals so the general public can point and laugh and stare and enlighten them on what complete douchebags they are.
I don't know whether it would be more of a deterrent, but it would certainly be more entertaining. We could even make it into a reality show, and use the advertising revenue to establish a fund to give people their pensions and retirement savings back.
Infidel753,
You have some excellent observations here. My conclusion as to why the useless corporate execs make so much and those who actually work and produce something of value is this: it's just the nature of capitalist exploitation, nothing more and nothing less.
GL: Good points, both about the baby seals and the stocks. I had a somewhat similar idea here.
JJ: You notice I'm not arguing with you.....
Heh, heh, heh, heh, heh, .... you know well how I feel about that! :)
Later Guy ........
Yep!
But also Mr.Infidel .... that $2K you made right there is the perfect example of what you can do in America if you use your "head". I see alot of hard working lower income folk's around me daily, that see the answer to financial security being to work a couple more extra part time job's and etc, etc. As a young man my Dad once brought up to me that he "never knew a working man that made any money". Folk's just get caught in "habit", and sometime's fail to see how much money there is to be made in a nation like this, whether there is a recession or not even. But you cant do it without making move's. Another thing alot of folk's dont see, is how the tax law's are written, and are alway's wondering how much tax will rich folk's pay?, like them pie chart's or whatever .... heh, heh, heh, heh, heh .... that's just "show" figure's ... any rich person know's damn well there are too mnay way's to not pay a dollar in taxes! :) I mean .... how do we think they stay wealthy? By working for paycheck's, having taxes deducted from them and putting another large chunk in crap like 401K's so these investor's can re- invest that as well?, and give you a small cut if you let them manage your money for year's, where if you withdraw before your date/ or retirement, you will get penalized for all the profit you made anywayz, heh, heh, heh, heh, heh .... I stopped workin for folk's back in 2006, the first 2 or so year's was hard, barely kept my bill's paid, but I kept at it, over the last year ... my thinking now is .... this is the best goddamn move I ever made. There's money to be made out there across the board .... but nothing is an easy start, and opportunity these day's dont come knocking at the door like in the past, it just come's by and beep's it's horn now, learn to "grab" when it passes. But good point's also Guy ....
But I didn't "use my head" to make money in stocks. It was just a lucky guess. There were other times when I lost money. It's no different from gambling. It's on the job that I need to use my head.
Working at a job produces something of value; gambling (whether in stocks or casinos) doesn't. The tax system should be set up so that working at a job is better rewarded.
I understand your point there .... and sure as Hell agree with you there brother! Guess who design's all the tax legislation? :)
But what you are sayin is so true .... I ceratinly have posted plenty similar about how they need us, we dont need them. As far as who does what. I dont play the stock market's and only gamble on a petty level .... these day's I buy and sell basically.
My wife works in academia and once a year the Chair of her department calls her in to tell her how well she is doing or how bad she is doing. But it works both ways, my wife gets to evaluate the Chair in secrecy. Last year the Chair's evaluations were so bad the Dean of the College called her in to find out what the hell was going on. But again, the Chair gets to evaluate the Dean and so on and on, all the way up to the President of the university. It seems a lot fairer than some of the crap hole companies I have worked for.
HE: We have downward-and-upward evaluations like that where I work (it's unionized, which most places aren't not nowadays). And actually the lower-level management people I know are perfectly decent. Even the upper management isn't disruptive the way it was at other places where I've worked. What I don't get is why a corporate executive should make 100 times the income of an actual worker -- or why a guy who futzes around with investments all day, producing nothing of value and even disrupting the economy, should make 100 times the income of a scientist who invents a drug that saves 20,000 human lives a year.
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