I hope this starts a trend

[samclem]

We have to find a way to raise up the middle class. And in an increasingly competitive world there is only one way to do this and that is to increase the value of the workers. How do we accomplish this? Only one way I can see, a better educated workforce.

I think better education is necessary, but probably not sufficient. Lots of the industrialized world (and even some less developed nations) produce better educated people than we do, some turn out more STEM grads, etc. And it has been this way for years, but many of these countries still have chronically low economic growth rates and pay.
The absolute "gotta have" for higher pay is higher productivity. Education can lead to that, but so can investments in tools, better leadership, better utilization of the talents/skills people have (enhanced workforce mobility/flexibility, etc)--and maybe fewer meetings!

There's nothing foreseeable that could increase the pay of "regular" workers to the relative level they were at in the 1950s and 1960s. That was a post-war fluke. People with no/low special skills had never commanded pay like that in the past, and might never again.

 

[travelover]

One side effect of high CEO pay is that the culture of a company is driven top down and the CEO sets the tone for attitudes of everyone on down to the floor sweeper. If that tone is greed, it does not go unnoticed.

 

[Chuckanut]

One side effect of high CEO pay is that the culture of a company is driven top down and the CEO sets the tone for attitudes of everyone on down to the floor sweeper. If that tone is greed, it does not go unnoticed.

+1 The underlings notice these things and it does color their actions and reactions.

Years ago a company I worked for had a special 'Executive Payroll System'. It seemed that the top dogs in the company got many extra benefits and perqs. The rational was that they were needed to keep their talent at the company.

I always found it interesting that the highest paid people with the biggest offices and nice expense accounts needed extras in order to insure their long term loyalty to the company while the remaining 99% were expected to be loyal simply because they got a pay check.

 

[explanade]

I think better education is necessary, but probably not sufficient. Lots of the industrialized world (and even some less developed nations) produce better educated people than we do, some turn out more STEM grads, etc. And it has been this way for years, but many of these countries still have chronically low economic growth rates and pay.
The absolute "gotta have" for higher pay is higher productivity. Education can lead to that, but so can investments in tools, better leadership, better utilization of the talents/skills people have (enhanced workforce mobility/flexibility, etc)--and maybe fewer meetings!

There's nothing foreseeable that could increase the pay of "regular" workers to the relative level they were at in the 1950s and 1960s. That was a post-war fluke. People with no/low special skills had never commanded pay like that in the past, and might never again.

That's somewhat of a rationalization.

Not everyone has the aptitude for STEM. Many people just can't go to college because of the costs, family finances requiring that they work right away, etc.

The middle class boom after WWII was not entirely due to more people going to college. There were good earning jobs to be had for the blue collar workers, until they decided to export those jobs to squeeze more profits upwards.

Germany has a well-educated workforce but they're not sending all of them to university to become engineers. Many are going into trades and one of their chief exports his high-end machinery which requires skilled machinists.

Anyways, the 1% isn't overrepresented by people who had STEM careers. In fact, what happens is that a lot of the engineers in technology are Asian or Indian but few of them become executives of tech companies.

 

[Chuckanut]

Germany has a well-educated workforce but they're not sending all of them to university to become engineers. Many are going into trades and one of their chief exports his high-end machinery which requires skilled machinists.

The over emphasis on college prep in the American K-12 system is one of the things that really bothered me as a teacher and still does. Unfortunately, the current demi-god of test scores soaks up so many resources that the idea of actually preparing a high school student to be a machinist, electrician, etc. is not even considered.

Students who struggle to read, write and and master math skills will learn these things quickly when they find they need them to build something, read a repair manual, or write up a proposal.

 

[HFWR]

So does anyone have any suggestions on how we could restructure earnings for sports stars, actors, pop stars (I hesitate to refer to some of them as 'musicians'), and CEOs . For some reason, the focus seems to be on CEOs and not those other high earners. Who might do more good for the Country - Elon Musk, or a boxer, or a 'performer'?

Dirk Nowitzki Passes Up Most Money In NBA History - Forbes

As stated in the article, Dirk has made over $200M during his career. Folks making tens or hundreds of millions of dollars holding out for more is, IMHO, just compensating for other "inadequacies"...

 

[samclem]

The middle class boom after WWII was not entirely due to more people going to college. There were good earning jobs to be had for the blue collar workers, until they decided to export those jobs to squeeze more profits upwards.

The boom was only minimally impacted by the GI Bill and education. It was because the US economy was the only industrial economy largely intact after the war, and we exported to countries that needed products. We had a limited number of workers, so they could ask for high wages and get them. This was a fluke of history, and as soon as the other economies in the world got up and running, US workers had to compete with them. They have continualy increased their pay, US workers have often lost ground in many cases. On the whole, it has been a giant "win" for humanity and lifted millions of people out of abject poverty, though US workers have lost some of the temporary pay advantage they had.

We could change things and have no free trade with the world, make and consume everything right here at home and don't "export jobs". That type of program is included in the philosophy of "Juche" (in the native tongue), which means "self reliance". For example, they largely eschew petroleum imports, instead relying on their own hydroelectric power. They build their own cars in country, from parts made in country. They have done everything possible to insulate themselves from the rest of the world economy. It's a marvel. Some say it is highly inefficient just because, for example, those very few cars they make are assembled virtually by hand (more jobs=good, right?), cost about 50 times the annual earnings of the typical worker, and are unsafe and shoddy to boot, but these people are ignoring the huge advantages of not exporting jobs, of avoiding all the evil that globalization holds for the average worker. Sure, few people have enough to eat, but it seems a small price to pay to be free of the whole oppressive idea of internal or external free markets.

 

[Which Roger]

One explanation I've heard, which I think has a lot of validity, is that the top 1% are getting richer because it's easier than ever for a single person to have a huge impact and therefore grab a bigger piece of the pie. The example that always comes to mind is from the Facebook movie, where the Zuckerberg character runs home from a party and with a few clicks of his mouse, adds "relationship status" to facebook. In a matter of minutes, he added millions of dollars of value to his product.

Contrast this example to Henry Ford. When Henry had a great idea, he would generally need to build more factories and hire thousands of people to implement it.

Another example is entertainment. 150 years ago, the only way to hear music was to hear it live. So there was a strong demand for local entertainers. Then recording and the radio came along, and now we have the internet, where you can watch a video of any entertainer for free whenever you want. So instead of the pie being divided between thousands of local entertainers, the top few globally end up with most of the pie.

Also regarding CEO and rank-and-file pay, it seems that a company that pays its employees "too much" or "too little" would suffer relative to its competitors who are paying "just right". If this is true, the market will punish the companies who overpay their CEOs (or underpay the rank-and-file), and the problem will correct itself. I don't know to what extent this is actually happening. If not, we then need to look at what forces are at work to prevent the free market from doing what it's supposed to do.

 

[robnplunder]

CEO pay: I'd like to see a higher percent of compensation as stock options that can't be exercised or sold for at least 10 years, and only a gradual schedule after that. The idea is to discourage short-term thinking and "meeting the numbers," and have the CEO benefit if he puts the long-term interest of the company (and stockholders) first. I want 'em thinking about how to put the company on a solid foundation and grow for decades (e.g. don't cut R&D to make next quarter's numbers)

+1. Too much of CEO $$$ is tied to next quarter's earning's report. My former megacorp execs keep coming up with short term solutions which never went anywhere. The company eventually got acquired but the CEO was rewarded with huge bonus for selling the company AND severance package worth over $10M.

 

[Walt34]

Students who struggle to read, write and and master math skills will learn these things quickly when they find they need them to build something, read a repair manual, or write up a proposal.

<rant mode on>

You are so right and that is the main reason I hated school so much K-12! I came very close to dropping out of HS for that reason.

I was supposed to expend all that effort learning all this (to me) esoteric "stuff" that I could see no practical application for but almost no one had a better explanation than "You'll need it someday".

Really? Tell me, exactly and precisely, how learning odd facts about the War of 1812 or calculating the passing time of two fictional moving trains on the other side of the country is going to be of any realistic practical use whatsoever to me five years from now. And if they didn't have an explanation I didn't make an effort to learn it. Whatever for?

Algebra was a complete waste of time to me. Until I wanted to learn to fly an airplane. Then of course it became essential, but I knew why.

I really didn't learn much about dealing with fractions until I took a shop class. Practical, useful stuff to know. Okay, I put effort into that.

Very few of the teachers could offer a useful, practical use for whatever it was they were teaching. So to me they were failures as teachers.

<rant mode off>

 

[Willers]

Laughable. This is all about publicity. Otherwise he would have been like my fellow alumni donors for a particular school. Half the donors are anonymous despite the fact that some of the donations dwarf what this dude gave up.

+100


Sent from my iPhone using Early Retirement Forum

 

[explanade]

The boom was only minimally impacted by the GI Bill and education. It was because the US economy was the only industrial economy largely intact after the war, and we exported to countries that needed products. We had a limited number of workers, so they could ask for high wages and get them. This was a fluke of history, and as soon as the other economies in the world got up and running, US workers had to compete with them. They have continualy increased their pay, US workers have often lost ground in many cases. On the whole, it has been a giant "win" for humanity and lifted millions of people out of abject poverty, though US workers have lost some of the temporary pay advantage they had.

We could change things and have no free trade with the world, make and consume everything right here at home and don't "export jobs". That type of program is included in the philosophy of "Juche" (in the native tongue), which means "self reliance". For example, they largely eschew petroleum imports, instead relying on their own hydroelectric power. They build their own cars in country, from parts made in country. They have done everything possible to insulate themselves from the rest of the world economy. It's a marvel. Some say it is highly inefficient just because, for example, those very few cars they make are assembled virtually by hand (more jobs=good, right?), cost about 50 times the annual earnings of the typical worker, and are unsafe and shoddy to boot, but these people are ignoring the huge advantages of not exporting jobs, of avoiding all the evil that globalization holds for the average worker. Sure, few people have enough to eat, but it seems a small price to pay to be free of the whole oppressive idea of internal or external free markets.

Or another way to look at it is that the owners of factories, the 1%, decided they could make more money for themselves by entering a race to the bottom, moving jobs offshore.

There are many examples where Asian competition was aided by American companies training them on how to build and essentially compete against them, even for relatively simple to manufacture products like furniture.

The factory workers lost good-paying jobs but the top shareholders made out fine.

 

[samclem]

Or another way to look at it is that the owners of factories, the 1%, decided they could make more money for themselves by entering a race to the bottom, moving jobs offshore.

There are many examples where Asian competition was aided by American companies training them on how to build and essentially compete against them, even for relatively simple to manufacture products like furniture.

The factory workers lost good-paying jobs but the top shareholders made out fine.

And many other cases where overseas companies taught their American counterparts a thing or two. Toyota and Honda aren't on the ropes, after all, and a lot of what they learned (from Deming et al) and put into practice had been rejected first by US corporations. That's another good thing about globalization--best practices spread, consumer goods improve/provide greater value.