What's the lesson from this story?

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dank69

Lifer
Oct 6, 2009
37,361
32,993
136
It is really a tortured argument. He believes we shouldnt care what others make. But then turns around and will scream income inequality. lol what?

...
The difference is that the income inequality damages society. He states as much right in post 9.
 

Jaskalas

Lifer
Jun 23, 2004
35,787
10,085
136
It takes more than minimum wage. It takes people banding together to create institutions more powerful than the individual or corporate interests- you know, an active democracy with all the trimmings like labor unions, government jobs, other worker protections as well.

Fat chance of that given the religious fervor of Job Creator worship.

I would agree that those items are ideal.
The issue is whether they work as intended.

My anchor to opposing them would be rooted in a belief that they are systemically destined to collapse markets and deprive our people of the wealth they enjoyed under a more... capitalist system. That even though those systems are intended to give more wealth to workers... they ultimately fail to do so.

If there is a system proven to work as intended, without restricting liberties (Bill of Rights) under an oppressive central authority... then you would find there are a clear majority of Americans, myself included, willing to stand for such things.

It's not making Americans richer and happier that I resist.
Our conflict is rooted in questions of how to obtain it.

In addition, a person like Bernie Sanders is actually quite favorable in terms of wanting prosperity for our people while, at the same time, opposing the tyranny of things like the NSA. If Democrats like President Obama would be strongly opposed to the Patriot Act and other government travesties, you'd find far more people willing to listen to "big government" ideals. Until then Democrats appear to be offering a carrot in one hand and a sickle in the other.

The biggest fear is that history repeats itself and your efforts bring forth a form of Government such as the USSR, Cuba, China, or North Korea. Our fight to keep government small stems from a mistrust of people and an inherent truth that those in power will seek to abuse it. To build that power into an almighty contraption "for the good of the people" is ultimately what causes many people to oppose "all the trimmings".

To your ideals:

  1. When has it ever worked?
  2. When has it not been abused?
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
The difference is that the income inequality damages society. He states as much right in post 9.

Bullshit. The left thinks income inequality is a good idea also, they just want the right to fine tune the levels of it to their exact preference. When one of them pulls down a $150k salary in their 40s after grad school, that's a sign of their merit and completely justified. When someone else makes $150MM from the sale of their business for which they sacrificed their time and lifestyle for decades, that's a sign of someone who screwed the poor and completely unjustified. Doesn't matter that the same guy might have been the one who paid the leftist the $150k while they drew a $15k salary for themselves.
 

dank69

Lifer
Oct 6, 2009
37,361
32,993
136
Bullshit. The left thinks income inequality is a good idea also, they just want the right to fine tune the levels of it to their exact preference. When one of them pulls down a $150k salary in their 40s after grad school, that's a sign of their merit and completely justified. When someone else makes $150MM from the sale of their business for which they sacrificed their time and lifestyle for decades, that's a sign of someone who screwed the poor and completely unjustified. Doesn't matter that the same guy might have been the one who paid the leftist the $150k while they drew a $15k salary for themselves.
Nope. The left doesn't have any problem with people who sell their business for $150M. That is just your poor understanding of reality. The left has a problem with people who have billions and are paying politicians to tax them less and offer even less service for the poor and middle class.
 

cubby1223

Lifer
May 24, 2004
13,518
42
86
The difference is that the income inequality damages society. He states as much right in post 9.

Versus what? Please specifically define "inequality", define "equality". How much time various workers spend dedicated to the job, how many hours they devote, how much studying they do on their off time, how committed they are to seeing the business succeed, how capable they are of helping the business succeed, helping the business grow larger, how much liability they take on if a problem arises, these all are a part of the equality equation.

It's very simple to decry "inequality" without actually discussing what it specifically is.

Have you ever gone through the process of starting up a business? Developed a product? Taken it to the marketplace? Taken on the responsibility of servicing the product?



And, there are some great examples of well run countries around the world. Germany has a high standard of living. Except they provide extra wealth for their citizens by sucking the wealth away from the rest of the Eurozone, the more countries like Greece, Spain, & Italy struggle to provide basic standards of living for their citizens, the Euro gets devalued, and because of that Germany's export market benefits greatly.

It also is the culture of Germany that has made them unique to stand out. They are a very obedient society, and they are very dedicated to knowledge and skill. They take far more pride in their work and their quality than almost any other nation in the world. They are generational - if your parents work the same line of work their whole lives, and you learn from them their knowledge, and carry on in the same line your entire life, you have such a better foundation for outperforming others in the same field. It's not coincidence that these traits have helped propel Germany.

Or take the Scandinavian countries who have bountiful oil resources spread across a small population. Same with Canada.



Many point to the worker conditions of Europe, the other side of the equation is their citizens learned not by choice to live frugal lives. WWII devastated the continent, all over citizens were poor, infrastructure was destroyed, resources were very limited. A lot of the success nations have experienced recently, has been a direct result of the population learning through force to live a cheap life, live an efficient life, that has carried over through today.

Bottom line, the issue of worker equality is far more complex than simply believing hard enough for good things and electing smart Democrats everywhere.
 

dank69

Lifer
Oct 6, 2009
37,361
32,993
136
Versus what? Please specifically define "inequality", define "equality". How much time various workers spend dedicated to the job, how many hours they devote, how much studying they do on their off time, how committed they are to seeing the business succeed, how capable they are of helping the business succeed, helping the business grow larger, how much liability they take on if a problem arises, these all are a part of the equality equation.

It's very simple to decry "inequality" without actually discussing what it specifically is.

Have you ever gone through the process of starting up a business? Developed a product? Taken it to the marketplace? Taken on the responsibility of servicing the product?



And, there are some great examples of well run countries around the world. Germany has a high standard of living. Except they provide extra wealth for their citizens by sucking the wealth away from the rest of the Eurozone, the more countries like Greece, Spain, & Italy struggle to provide basic standards of living for their citizens, the Euro gets devalued, and because of that Germany's export market benefits greatly.

It also is the culture of Germany that has made them unique to stand out. They are a very obedient society, and they are very dedicated to knowledge and skill. They take far more pride in their work and their quality than almost any other nation in the world. They are generational - if your parents work the same line of work their whole lives, and you learn from them their knowledge, and carry on in the same line your entire life, you have such a better foundation for outperforming others in the same field. It's not coincidence that these traits have helped propel Germany.

Or take the Scandinavian countries who have bountiful oil resources spread across a small population. Same with Canada.



Many point to the worker conditions of Europe, the other side of the equation is their citizens learned not by choice to live frugal lives. WWII devastated the continent, all over citizens were poor, infrastructure was destroyed, resources were very limited. A lot of the success nations have experienced recently, has been a direct result of the population learning through force to live a cheap life, live an efficient life, that has carried over through today.

Bottom line, the issue of worker equality is far more complex than simply believing hard enough for good things and electing smart Democrats everywhere.
What is inequality? Here is wealth inequality:
wealth2.jpg

perceived-wealth-distribution.jpg

wealth-inequality-screenshot.jpg


Here is income inequality:
chart-01.jpg
 

TheSlamma

Diamond Member
Sep 6, 2005
7,625
5
81
Versus what? Please specifically define "inequality", define "equality". How much time various workers spend dedicated to the job, how many hours they devote, how much studying they do on their off time, how committed they are to seeing the business succeed, how capable they are of helping the business succeed, helping the business grow larger, how much liability they take on if a problem arises, these all are a part of the equality equation.

It's very simple to decry "inequality" without actually discussing what it specifically is.

Have you ever gone through the process of starting up a business? Developed a product? Taken it to the marketplace? Taken on the responsibility of servicing the product?



And, there are some great examples of well run countries around the world. Germany has a high standard of living. Except they provide extra wealth for their citizens by sucking the wealth away from the rest of the Eurozone, the more countries like Greece, Spain, & Italy struggle to provide basic standards of living for their citizens, the Euro gets devalued, and because of that Germany's export market benefits greatly.

It also is the culture of Germany that has made them unique to stand out. They are a very obedient society, and they are very dedicated to knowledge and skill. They take far more pride in their work and their quality than almost any other nation in the world. They are generational - if your parents work the same line of work their whole lives, and you learn from them their knowledge, and carry on in the same line your entire life, you have such a better foundation for outperforming others in the same field. It's not coincidence that these traits have helped propel Germany.

Or take the Scandinavian countries who have bountiful oil resources spread across a small population. Same with Canada.



Many point to the worker conditions of Europe, the other side of the equation is their citizens learned not by choice to live frugal lives. WWII devastated the continent, all over citizens were poor, infrastructure was destroyed, resources were very limited. A lot of the success nations have experienced recently, has been a direct result of the population learning through force to live a cheap life, live an efficient life, that has carried over through today.

Bottom line, the issue of worker equality is far more complex than simply believing hard enough for good things and electing smart Democrats everywhere.
Well said.

I think we have a lot of current issues that face the same dilemma where it is very easy to hold up the "this is what is wrong" flag but it stops there, no constructive realistic offerings to replace it or to improve it. As Dank just did with the post above.

I do wonder.. in this world of equal pay for everyone what percentage of people say I want to be a doctor/plumber/lawyer/etc and then how many say, aw screw it for the same pay I'll just be a paperboy since it gets me home to the Xbox faster?

Are we counting 100% on passions for people to occupy these careers under this perceived utopia? Or does it eventually get assigned by the people in control?
 

realibrad

Lifer
Oct 18, 2013
12,337
898
126
What is inequality? Here is wealth inequality:

Linking pictures does not define what inequality is. From your graphs it looks like you are trying to say its a distribution by population, and is not equality to me.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
126
That the business owner has zero competition - if he did the price premium would put him out of business and all those employees out of work.

Individual choice is separate from government mandate, as someone will always cut costs without a floor set by mandate.
This is not equivalent to setting a minimum wage.

He didn't raise his rates. He reduced his own salary from $1M+/year to $70,000/year to (at least partially) pay for it.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
126
If I was in my current position and the owner dictated the guys in the back were to make as much as me. It would also piss me off. Why? Because the owner is telling me my talents are worth as much as the guy who barely graduated out of highschool and performs a menial job that requires little skill. It is human nature to feel validated. Being paid for your talents is being validated.

What if you were only making $50K before and now you are making $70K, would you still be mad that someone "from the back" was getting paid $70K even though you are now getting paid well above what the market dictates as well?

Or perhaps you would be too concerned about fairness to the guy smarter/better than you who is making $65K and only got a $5K bump that would refuse the raise?

It boggles my mind how many people say that they would be pissed that they are making more money simply because someone else is also making the same amount. Personally I would be friggen ecstatic that my employer is paying me above market rate and wouldn't care one bit that other people are also enjoying the same above market pay that I am.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
126
And who are you to tell me how I should or shouldn't feel validated?

And what are you 8 years old to believe we should feel validated by meeting our bosses expectations? lol! I am sure management would love to get the working public to buy into that.

Anyways, if you feel this strongly why dont you offer to take a pay cut to match people below you with a lesser skillset. After all, what you get paid shouldnt have anything to do with how your feel validated within your position. Am I right?

So if you were given a job as a garbage collector making twice as much as you currently do you would feel twice as "validated" at the end of your day picking up trash as you do at your current job?
 

realibrad

Lifer
Oct 18, 2013
12,337
898
126
What if you were only making $50K before and now you are making $70K, would you still be mad that someone "from the back" was getting paid $70K even though you are now getting paid well above what the market dictates as well?

Or perhaps you would be too concerned about fairness to the guy smarter/better than you who is making $65K and only got a $5K bump that would refuse the raise?

It boggles my mind how many people say that they would be pissed that they are making more money simply because someone else is also making the same amount. Personally I would be friggen ecstatic that my employer is paying me above market rate and wouldn't care one bit that other people are also enjoying the same above market pay that I am.

One reason might be due to the fact that a company that boosts the base pay to 70K is that it means they value all those workers and their work equally. If someone is more productive than you, that person should get paid more than you. Keep it simple by just putting that in the context of the same company and its even harder to get around.

Now, the main thing is what you brought up about market value. If my market value is 60k and the other person is 40k then my contention is that the company is wasting money that could have been better used to grow and create more jobs, or give everyone even more money.

If you are now going to pay me 70k and the other guy 70k, then you are giving up profits that could have been used to buy equipment or buy a new building ect. What the company just did was to forgo future earnings for current earnings. The company has the right to do this, but it does not appear to be efficient unless this is a stunt to get their name out there or something like that.
 

ivwshane

Lifer
May 15, 2000
33,522
17,031
136
One reason might be due to the fact that a company that boosts the base pay to 70K is that it means they value all those workers and their work equally. If someone is more productive than you, that person should get paid more than you. Keep it simple by just putting that in the context of the same company and its even harder to get around.

Now, the main thing is what you brought up about market value. If my market value is 60k and the other person is 40k then my contention is that the company is wasting money that could have been better used to grow and create more jobs, or give everyone even more money.

If you are now going to pay me 70k and the other guy 70k, then you are giving up profits that could have been used to buy equipment or buy a new building ect. What the company just did was to forgo future earnings for current earnings. The company has the right to do this, but it does not appear to be efficient unless this is a stunt to get their name out there or something like that.

With the profits companies have been posting the last decade, I don't see why they couldn't do both, pay well and hire more people or equipment if needed.
 

realibrad

Lifer
Oct 18, 2013
12,337
898
126
With the profits companies have been posting the last decade, I don't see why they couldn't do both, pay well and hire more people or equipment if needed.

Because math and logic.

Inherently doing one means you are giving up doing another. If you have a total amount of money/resources you can only do so much. It does not matter that companies make more or less. Its a logical fact that you can only use what you have access to. If you cannot see why this is the case, then I dont know what else to say.

If the company pays people more now, it gives up growing that could have made even more money. You can argue they should balance and do both, but you cannot say you do not give something up.
 

nickqt

Diamond Member
Jan 15, 2015
8,175
9,164
136
The "lesson" is that if you make your company into a political statement about income inequality, expect there to be some unforeseen and unintended consequences.

Had the CEO done the same thing silently, his company wouldn't be in the news and would instead be continuing to function like a business.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
126
One reason might be due to the fact that a company that boosts the base pay to 70K is that it means they value all those workers and their work equally. If someone is more productive than you, that person should get paid more than you. Keep it simple by just putting that in the context of the same company and its even harder to get around.

Now, the main thing is what you brought up about market value. If my market value is 60k and the other person is 40k then my contention is that the company is wasting money that could have been better used to grow and create more jobs, or give everyone even more money.

If you are now going to pay me 70k and the other guy 70k, then you are giving up profits that could have been used to buy equipment or buy a new building ect. What the company just did was to forgo future earnings for current earnings. The company has the right to do this, but it does not appear to be efficient unless this is a stunt to get their name out there or something like that.

Oh I never argued that it was efficient from a business standpoint because by it's very nature it isn't. No argument from me on that one.

Very few people think about their corporation like you just outlined, they are only concerned with what they can get. So my question remains, are you pissed that you got a $20K/year raise if that means someone else who may not be as good as you also gets bumped up to your pay level? Would you forgo the extra $20K/year in order to deny the other guy a $30K/year raise?
 

NoStateofMind

Diamond Member
Oct 14, 2005
9,711
6
76
cut

It boggles my mind how many people say that they would be pissed that they are making more money simply because someone else is also making the same amount. Personally I would be friggen ecstatic that my employer is paying me above market rate and wouldn't care one bit that other people are also enjoying the same above market pay that I am.

How are you not in a production environment?

Employee A refinances 100 homes for his mortgage bank a month

Employee B refinances 50 homes for his mortgage bank a month

= same pay?

The employer made twice the money off of Employee A's efforts. Should that not dictate compensation that reflects your contribution to the overall business? If not, wouldn't the natural inclination of the employee then be of less performance since its apparently acceptable at that wage?
 

davmat787

Diamond Member
Nov 30, 2010
5,512
24
76
My takeaway from this story is that internal HR and payroll decisions shouldn't be advertised to the world for publicity.

The change in policy would have been disseminated organically and soon enough. The manner in which it was announced probably wasn't the best in hindsight.

Too early to tell how wise a move this was business wise and financially speaking. $70,000 really isn't that much if you want to attract talent and experience in the Seattle and Eastside area anyway.

Being a cynical jerk I can't help but suspect he realized $70,000 was the minimum he needed to pay for the talent required and chose to go after some feel good PR at the same time.
 

realibrad

Lifer
Oct 18, 2013
12,337
898
126
Oh I never argued that it was efficient from a business standpoint because by it's very nature it isn't. No argument from me on that one.

Very few people think about their corporation like you just outlined, they are only concerned with what they can get. So my question remains, are you pissed that you got a $20K/year raise if that means someone else who may not be as good as you also gets bumped up to your pay level? Would you forgo the extra $20K/year in order to deny the other guy a $30K/year raise?

I dont know if pissed is the right word, but I would be unhappy because of the implications I gave before. Finding a new job is not easy. A company that would do something as drastic as jumping peoples pay that much is a company that is wasteful. The money could have been better spent and I would be better off in that case.

It is true that I would be happy making above market value, but there is more than that to look at. My issue is not with how much someone makes, but the implication of their salary. I would not be mad at the person, but upset with the direction of the company.
 

cubby1223

Lifer
May 24, 2004
13,518
42
86
Back to the question in the title - the lesson is that different people place different weights on the qualities that make up a job or a worker, and thus what's equal to one person is unequal to another. It's not something to call other people stupid over, just recognize that different people have different opinions.

Beyond that, I don't see this having much impact outside the company. $20/hr minimum wage would likely have larger spreading effects than a jump all the way to $33/hr. These people have more income, and that's about it.

Most startup businesses, well, it's ~95% of all new businesses fail within 5 years. For new businesses to form, there must be access to a cheap labor force, otherwise the ability to develop is severely stunted. This company would never have survived if they paid their entire workforce >$70k from day 1.

There must be some workers paid well, there must be some workers paid cheaply. This company made a decision at a time when they could make such a decision. Others are not capable of doing so.
 

BonzaiDuck

Lifer
Jun 30, 2004
16,627
2,024
126
There are economic models that describe the relationship between the firm and its labor -- "Marginal Revenue product," "Marginal labor product."

But these models, like the old, classical Walrasian "supply and demand" concepts, are often short for reflecting reality.

The problem arises in measurement. In "intensive" production activities, like "brain surgery," it can be hard to measure output. In a lot of office settings, it can be difficult to measure output. Good managers find ways to do it. But there isn't any definite qualification for a management job. You can learn these things in business school. Out in the real world, when "school's out . . for the sum-mer" -- some people figure they paid their dues, forget what they learned, don't make an effort to apply what they know. Maybe the people who hire them are almost as clueless. In that case, someone who "does" misses recognition, someone who "doesn't" gets more than their share.

You'll find these situations and behaviors in both private firms and public agencies.

There are different kinds of compensation. You can get an annual salary. You can get a "promotion" from that annual salary. You can get a pecuniary one-time award.

Then there's the dimension of intrinsic job satisfaction, and myriad other reasons which compel people to come to work.

Some people limit their own opportunities. Maybe they go to school determined that they're going to make a living a certain way. They may have been taught to "persist." They could persist for years, work 80 hour weeks for 40 hours pay, and the sunlight never comes. Some would say "try something else -- move on." But they're locked into their own limiting decisions.

So simplify the discussion. The issue across many corporations explains something of how labor is compensated and how "management" is compensated. It may intersect the organization's culture which could define whether the leadership has a sense of public as well as private responsibility. If the CEO only follows the dictates of majority stockholders -- the desire for bigger and bigger dividends and profits -- he will do what he can to short his own employees.

So a major issue is how management and investors are compensated, and how labor is compensated. The economic data going back to the late 1940s suggests that wages (for labor) began to stagnate in the '70s, while profitability (and therefore management and investor compensation) took off. In the 1950s, CEOs got maybe 20x the compensation of the average worker. Today, the order of magnitude is something closer to 400x or 500x.

The business pays "what the market will bear" for wages. But there may not be any correspondence between what the worker contributes toward profitability and what he's compensated. And usually, if he contributes more which could be measured, and it isn't measured, somebody gives him a Christmas goose and someone else walks off with a pile of stock-options.

Then there's "globalization shock." Consider the HP engineers. They were all paid such and such. They'd tied themselves and their families to mortgages for home real-estate priced at some average market level. Suddenly, they could be outsourced (which they were), or someone might have negotiated draconian pay cuts. But the mortgage is still there. It's a contract. It's not a matter of a farmer selling potatoes for some price one week, to find it's down the next, and up again a month later.

So I and my family are supposed to suffer, so some . . .ditz can get a $300 million golden-handshake.

So, there's a problem. There might be any number of solutions. and some of the solutions are going to stick in somebody's craw.

Always, always -- the issue fits under a general category of property rights. What is my legal ownership? Am I entitled to whatever I can get?

There is a concept originally cast as the "Marxist firm," to which economist Richard Wolfe has applied the milder term "democratic firm." Instead of stockholders and managers exclusively determining what work is to be done, what will be done with profits and other decisions, the workers have an equal say. It's been tried in Spain -- forgot the name of the corporation -- but they're still in business, still prospering.

By the way. Who despises labor unions? The obvious answer that will likely be put forth in this forum: Republicans and conservatives.

But Marx despised labor unions equally -- maybe more so.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
126
My takeaway is that people whose primary concern is about "income inequality" make for shitty business owners in real life.
 

ivwshane

Lifer
May 15, 2000
33,522
17,031
136
Because math and logic.

Inherently doing one means you are giving up doing another. If you have a total amount of money/resources you can only do so much. It does not matter that companies make more or less. Its a logical fact that you can only use what you have access to. If you cannot see why this is the case, then I dont know what else to say.

If the company pays people more now, it gives up growing that could have made even more money. You can argue they should balance and do both, but you cannot say you do not give something up.

Did I say that? No I didn't.

So let's ignore that straw man and you'll see that your post says the exact same thing I said.
 

ivwshane

Lifer
May 15, 2000
33,522
17,031
136
My takeaway is that people whose primary concern is about "income inequality" make for shitty business owners in real life.

So basically you read into things whatever you want and couldn't care less about the facts? Yeah, I'd have to agree with you.
 

ivwshane

Lifer
May 15, 2000
33,522
17,031
136
Back to the question in the title - the lesson is that different people place different weights on the qualities that make up a job or a worker, and thus what's equal to one person is unequal to another. It's not something to call other people stupid over, just recognize that different people have different opinions.

Beyond that, I don't see this having much impact outside the company. $20/hr minimum wage would likely have larger spreading effects than a jump all the way to $33/hr. These people have more income, and that's about it.

Most startup businesses, well, it's ~95% of all new businesses fail within 5 years. For new businesses to form, there must be access to a cheap labor force, otherwise the ability to develop is severely stunted. This company would never have survived if they paid their entire workforce >$70k from day 1.

There must be some workers paid well, there must be some workers paid cheaply. This company made a decision at a time when they could make such a decision. Others are not capable of doing so.

I agree on all points. I don't think it's stupid, I just think it's an illogical way to look at ones worth (especially for a salary based position).