Would you vote to control your boss' wages?

[Lark]

If you worked in a company in which the wage deals of the management required approval of the rank and file workforce would you limit their raises or vote for pay freezes?

It was one of the interesting things in UK tory manifestos that they wanted to introduce something along those lines, dealing with managerial pay inflation is one of the next big things, now obviously most governments, particularly conservative ones, are only really concerned with pay inflation in public services, but what do you think of the idea?

I remember reading about other incomes policies, about maximum aswell as minimum wages, now in reality it would be impossible to implement across an entire economy or country, there's a dozen uncreative ways of working around such an idea alone, but also more micro ideas like introducing it as business practice in small or medium size companies or as a different form of company such as PLCs or Co-Ops were specific types of business in the past.

Although speaking with someone lately they actually told me that they thought ideas like this wouldnt work because people who could have controlling votes would support pay rises because they think they are going to get a promotion.

 

[Dave Fallon]

I think it depends on a lot of things. Companies can vary is so many different ways nowadays: size, structure, seasonality, nationality or multi-nationality, market size and market potential, margin or profitability, regulations amount, etc etc. A blanket law would probably not work unless it was either extremely large to allow for the different scenarios, or extremely small to only be concerned with certain scenarios.

But you asked if I would limit the raises of executives if I could. I think yes, with many many caveats, but I think having a limited wage with the promise of possible raises if certain goals are met is good for everyone, including and perhaps especially for executives.

But there's more to this question: how much power should the rank-and-file have in a company. It's interesting how the U.S. government is sometimes compared to a business. I was reading an article about net neutrality just yesterday in which the writer suggested the reason we should not have net neutrality is because our government is a monopoly, a concept that seemed so stupid I laughed out loud and refused to read any further. But the comparison is there, and happens quite a bit. Rarer is the reverse comparison: how are businesses like nations with governments. If the U.S. government is a type of business with a monopoly, then the vast majority of companies are types of feudal city-states run by dictators who forge various forms of alliances with their neighbors in attempts to annex their rivals. Every company I have worked in has been just its own little nation with a dictator and that dictator's inner cadre of generals, and I have been a serf or other citizen subject to rules I did not vote on or even have a chance to review before they were enacted.

Is this good? Should businesses be more like democracies, or at least like republics? Should employees at all levels be given the right to vote or otherwise directly influence the direction of the company? Should they have a "bill of rights" or a "constitution" designed for the peaceful transfer of power every four-to-eight years and to limit the power of the various branches? Or is this silly?

 

[sprinkles]

Personally I'd rather hit the richest ones with a prohibitive tax bracket.

 

[ZcM4xzkjgzCjytBc]

Control? Well, wouldn't that just make the minions feel better.

 

[Stu]

No, but.....

Report
[h=1]CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners[/h] By Lawrence Mishel and Natalie Sabadish | June 26, 2013

[h=4]Issue Brief #367[/h] View PDF
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The 1980s, 1990s, and 2000s were prosperous times for top U.S. executives, especially relative to other wage earners and even relative to other very high wage earners (those earning more than 99.9 percent of all wage earners). Executives constitute a larger group of workers than is commonly recognized, and the extraordinary pay increases received by chief executive officers of large firms had spillover effects in pulling up the pay of other executives and managers.[SUP]1[/SUP] Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1.0 percent and top 0.1 percent of households from 1979 to 2007 (Bivens and Mishel 2013). Income growth since 2007 has been very unbalanced as profits have reached record highs and, correspondingly, the stock market has boomed while the wages of most workers (and their families’ incomes) have declined over the recovery (Mishel et al. 2012, Mishel 2013). It is useful to track CEO compensation to assess how well this group is doing in the recovery, especially since this is an early indication of how well other top earners and high-income households are faring through 2012. This paper presents CEO compensation trends through 2012 and finds:
Trends in CEO compensation last year:

• Average CEO compensation was $14.1 million in 2012, using a measure of CEO pay that covers CEOs of the top 350 firms and includes the value of stock options exercised in a given year (“options realized”), up 12.7 percent since 2011 and 37.4 percent since 2009. This is our preferred measure.
• Average CEO compensation using a measure that covers CEOs of the top 350 firms and includes the value of stock options granted to an executive (“options granted”) was $10.7 million in 2012, 7.1 percent lower than in 2011 though still 9.1 percent greater than in 2009. Firms apparently pared back the value of new options granted because CEOs fared so well by cashing in options as stock prices grew.

Longer-term trends in CEO compensation:

• From 1978 to 2012, CEO compensation measured with options realized increased about 875 percent, a rise more than double stock market growth and substantially greater than the painfully slow 5.4 percent growth in a typical worker’s compensation over the same period.
• Using the same measure of options-realized CEO pay, the CEO-to-worker compensation ratio was 20.1-to-1 in 1965 and 29.0-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
• Measured with options granted, CEOs earned 18.3 times more than typical workers in 1965 and 26.5 times more in 1978; the ratio grew to 136.8-to-1 in 1995 and peaked at 411.3-to-1 in 2000. In 2012, CEO pay was 202.3 times more than typical worker pay, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.

CEO compensation relative to other high earners:

• Over the last three decades, CEO compensation grew far faster than that of other highly paid workers, those earning more than 99.9 percent of other wage earners. CEO compensation in 2010 was 4.70 times greater than that of the top 0.1 percent of wage earners, a ratio 1.62 higher (a wage gain roughly equivalent to that of 1.6 high wage earners) than the 3.08 ratio that prevailed over the 1947–1979 period.
• Also over the last three decades, CEO compensation increased further relative to other very high wage earners than the wages of college graduates grew relative to those of high school graduates.
• These findings show that CEO compensation growth reflects not just the increased market value of highly paid professionals in a competitive market for skills (the “market for talent”) but the presence of substantial rents embedded in executive pay. Consequently, if CEOs earned less or were taxed more there would be no adverse impact on output or employment.

 

[Switchgirl]

If the boss is an ass, or if the boss is fan-fucking tastic, then yes.

 

[Eventhorizon]

Ha ha ha ha. This is a funny question. Maybe all employees have their wages voted on.
Controling Congress's wages would be in order though.

 

[Faye]

That is a half measure. What we really need is a tax on wealth. Sure, let the boss have a huge paycheck, but take a large portion of it and use that money for infrastructure, schools, and social services.

Besides, if you put a cap on wages, they will probably find a way around it by offering them some other sort of benefits.

 

[Rcs6r]

I'd be concerned on how the boss took out higher taxes on the rest of the company.

Layoffs! Layoffs everywhere!

 

[sprinkles]

I'd be concerned on how the boss took out higher taxes on the rest of the company.

Layoffs! Layoffs everywhere!

Fuck their spoiled tantrums. We don't see anyone concerned about poor people robbing a convenience store, or walking into their bosses office with a shotgun.

We can't let people run things based around the fear that they might respond with spiteful antics.

 

[Quiet]

no...and yes

i dont believe that we should ever put any limits of 'maximum' on what anyone can earn, except in the situation of public servants.
i do believe that we should have limits of 'minimum' on what anyone can earn
maybe there could be a ratio/percentage system- the lowest wage can be no less than 5% of the highest wage. If the highest wage increases, the lowest wage has to increase as well.
i also think that ideally, all employees should have a share in business direction and profits
ideally business operate with a cooperative structure
i also think that everyone's wage and salary should be transparent information available to anyone within that business, as well as the costs, expenses, and profits of business.

i think that politicans should get paid a basic living wage, and have the majority of their expenses made transparent and paid for by the public. All donations to political parties should be transparent to the public and publically acknowledged.
i dont believe in income tax, and i dont believe that rich people should have to pay higher tax rates or should be treated unfairly or any different from anyone else.
i prefer the idea of goods and services tax, and transactions tax, rates paid to councils to maintain infastructure, a 'resource' tax, where a percentage of the resources one has monopolised has to be paid in tax, and a 'sustainability' tax, where tax is paid in relation to any risks and damage that could be caused to people and the environment, and a voluntary tax where people gove money to their community on their own merit. All taxes paid should be transparent and public knowledge. Public should vote on what the money goes to, and individual tax payers should choose how they want their tax money divvied up according to the available avenues. For example, if i can put my money into social welfare, and none on defense etc....according to what i personally believe, and what the public as a whole has voted for as its primary concerns
i also think it would be good to have a lot more business and governent raffles and lotteries....where all people in a business give a percentage of their monthly salary, or perhaps a flat rate amount, and then a 'winner' is randomly and very transparently drawn every month and awarded the money. And a similar system for tax payers.

 

[sprinkles]

[MENTION=4956]charlene[/MENTION]

Income tax is actually the best kind of tax because it can take into account a person's economic situation. Sales tax and service tax increases the cost of living across the board and causes the poor to be poorer.

Relying on goods and services taxes only creates unequal burdens in the same way flat taxes do. With flat taxes, people with the least money are hurt the most, but with a good income tax system the inverse is true - money is taken from those who can afford it.

 

[Quiet]

[MENTION=4956]charlene[/MENTION]

Income tax is actually the best kind of tax because it can take into account a person's economic situation. Sales tax and service tax increases the cost of living across the board and causes the poor to be poorer.

Relying on goods and services taxes only creates unequal burdens in the same way flat taxes do. With flat taxes, people with the least money are hurt the most, but with a good income tax system the inverse is true - money is taken from those who can afford it.

i get what you're saying....i've been having this debate with people for the last 12 years atleast, and i do appreciate the argument for income tax

but i also believe that we wouldnt have 'poor' at all if we overhauled our tax system, goverment, business models, and lifestyle. Most of the ideas i mentioned in my post only work if they are implemented together.

i think that most rich people avoid taxes because it is unfair for them. Everyone's taxes so often go towards something they dont support. Moreover, having a high income is not the same as monopolising and tying up a a lot of resources.

i also believe in a very strong solid foundation of social welfare. Social welfare is in everyone's best interest.

 

[sprinkles]

i get what you're saying....i've been having this debate with people for the last 12 years atleast, and i do appreciate the argument for income tax

but i also believe that we wouldnt have 'poor' at all if we overhauled our tax system, goverment, business models, and lifestyle. Most of the ideas i mentioned in my post only work if they are implemented together.

i think that most rich people avoid taxes because it is unfair for them. Everyone's taxes so often go towards something they dont support. Moreover, having a high income is not the same as monopolising and tying up a a lot of resources.

i also believe in a very strong solid foundation of social welfare. Social welfare is in everyone's best interest.

I understand.

They're mistaken in thinking it is unfair though. It's entirely fair. For example a $10 tax is significant if you only have $10, but nothing if you have a billion. However if the tax is 10% then the burden is relatively equal.

Yes, a rich person can pay a lot more money. However with a correct tax bracket they will never end up more burdened that someone with less money - i.e. they will always be rich and will always be able to get more money because they only pay a high percent for their income which is over a certain amount.

Or in other words for example for the first 30k their earnings get taxed low, or nothing. For the earnings between 30k and 60k they're taxed at a working class level, for above 60k it's a middle class level tax, above 100k is upper middle class etc. etc. so basically they pay equal amounts to another person who earns that much in a given tax bracket.

However I do suppose things can work without that.

Edit:
Also logically you can compare it to structural pillars. You cannot expect a weak pillar and a robust pillar to carry the same weight - you don't mix sticks with steel girders to hold up a skyscraper.

You don't use an iron beam to hold up a two man tent, and you don't use balsa wood to hold up a giant tower. It makes no sense.

 

[Eventhorizon]

No ones business here at all what people get paid. If a company chooses to pay someone 10 dollars an hour and that person chooses to work there great. If a company chooses to pay someone 10 million a year, its no ones business. They get taxed at the same percentage as everyone else.

 

[Eventhorizon]

17% flat tax for everyone.

 

[Faye]

No ones business here at all what people get paid. If a company chooses to pay someone 10 dollars an hour and that person chooses to work there great. If a company chooses to pay someone 10 million a year, its no ones business. They get taxed at the same percentage as everyone else.

What country is this in? Certainly not the U.S.

 

[sprinkles]

What country is this in? Certainly not the U.S.

Well they do, depending how you look at it.

For example the first 60k they make will be taxed the same as anyone else's first 60k. However the more you make, the more tax brackets you hit, so they trivially think they're being hit unfairly.

 

[Eventhorizon]

What country is this in? Certainly not the U.S.

Err... what I meant to say is that they should be taxed tbe same. Currently they arent, they are taxed more I the US.

 

[sprinkles]

Err... what I meant to say is that they should be taxed tbe same. Currently they arent, they are taxed more I the US.

They're taxed more because they make more money.

Rich people have NOTHING to complain about. They cannot be made to suffer through taxes. I mean look at it this way. If I gave you the option to take a million dollars taxed at 50%, a thousand dollars taxed at 10%, or a hundred dollars tax free, which would you rather take?

The way our tax system works, rich people STILL take home the most money no matter how high they're taxed. If the government wants money while causing minimal suffering then taxing the rich is the best way to do it because losing a large percent of millions is hardly an inconvenience.

Literally it is hard to have it any better if you're rich so they basically complain about nothing. Because they're spoiled. Due to being rich.