Elizabeth Barrette (ysabetwordsmith) wrote,
Elizabeth Barrette
ysabetwordsmith
  • Mood: busy

Payment for Work

I came across this article today, which discussed changes in the proportion of CEO earnings to average worker earnings:

This brings us to the topic of CEO pay. We saw an explosion in CEO pay that began in the eighties and has continued into the current decade. While the ratio of the pay of CEOs to an average worker had been around 30 to 1 in the sixties and seventies, by the end of the eighties it stood at more than 70 to 1. It crossed 100 to 1 in the early nineties. The ratio has been perched between 200 to 1 and 300 to 1 since the late nineties, with CEOs at major companies routinely pulling down pay packages in the tens of millions, and running into the hundreds of millions in good years.


Payment for a job should take into consideration how laborious it is (physically/mentally exhausting), how unpleasant it is, how demanding it is (of time, resources, and attention especially if it spills out of on-the-clock time), and how much skill/experience is required to perform it properly. Those things add up to "how hard" a job is. Hard jobs should pay more than easy jobs.

Now, I can wrap my mind around the fact that the guy in charge of an entire company might have a job 30 times as hard as, say, a secretary. If he's got a Ph.D. (or several) and he has to do all the visionary planning and keep everyone coddled into working together and people call him on his cell phone at the beach so they can nag him to solve their problems ... yeah, that's a hard job. (At my Grey School job, I happen to do a LOT more work as an administrator than as a teacher; that's not a typical educational arrangement, but it can happen. So I figure such things are possible elsewhere.) But it's not 300 times harder than being a secretary, and shouldn't be compensated at that rate.

Not all CEOs necessarily work that hard. Not all companies have moderately difficult 'average' jobs. The CEO of a manufacturing company is not going to be working 30 times harder than a factory worker who's totally wiped out at shift-end; the CEO job requires more education but is less laborious. Plus which, not all CEOs have a hefty education; some of them just have hefty connections. That's absurd.

Basically what has happened is that America has made good progress, and a small number of people have creamed off an unfairly large share of it -- rather like feudal lords used to do with their peasants -- and now the average workers are so broke that they can't afford to buy things, which is how far the situation has to deteriorate before the people at the top of the economic pyramid start to give a fig about it.

If the foundation isn't solid, the structure won't stand up to stress no matter how sturdy the top of it is. Ford understood this when he arranged his factories so that his workers would usually be able to afford the cars they were making. That's good economic planning.

For what it's worth, one of my science fiction settings, the Common Ground colony, has a law that the highest paid person in a company can make no more than 100 times what the lowest person makes. That means sometimes the janitor gets a raise if the CEO wants one.
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  • 8 comments
xterminal

xterminal

January 15 2008, 19:19:20 UTC 13 years ago

Payment for a job should take into consideration how laborious it is (physically/mentally exhausting), how unpleasant it is, how demanding it is (of time, resources, and attention especially if it spills out of on-the-clock time), and how much skill/experience is required to perform it properly. Those things add up to "how hard" a job is. Hard jobs should pay more than easy jobs.

Ever since a very short, nasty, and brutish stint I did at the Dept. of Labor back in the mid-nineties, I have been of the conviction that the secretary has the hardest job in any office. The secretary has to know everything. (And, subsequently, has all the power in any given office that actually matters.) They should definitely make as much as CEOs, considering if the CEO drops dead of a heart attack, the sole person in any given office who could immediately take over with no interruption in anything is the secretary.
je_reviens

je_reviens

January 16 2008, 02:00:22 UTC 13 years ago

Actually there have been studies that show that typical office work is far far FAR more exhausting and difficult than your typical laborer or factory worker job. Just because it's not as physical, doesn't mean it's less tiring.

The mental strain on someone who is responsible for the jobs of hundreds or thousands of workers is immense. And while a factory worker may work hard, at the end of their shift they leave and go home, leaving the work at work.

A CEO -- or any high level manager -- is never ever truly "not working". They are responsible for an entire company or entire division or even an entire project, and that burden never goes away.

I can't say whether 300 times more is fair or not, but I felt your logic here was intrinsically flawed. You are comparing the outsides only. Compare insides to insides -- there *is*no comparison.

i would argue that anyone who doesn't see that has never had a mid to high level management job in corporate America.
ysabetwordsmith

ysabetwordsmith

January 16 2008, 02:10:07 UTC 13 years ago

Those factors were indeed accounted for in my analysis, for example in the mention of a CEO being called while at the beach. I understand that high-level management can be insanely exhausting and time-consuming; I'm doing it, and I'm not making anything like a CEO makes. That doesn't mean it's fair, or safe, or economically viable, for a CEO to make 200 or 300 times what an average worker does.

I'm still wondering how public-school administrators manage to sit on their asses and do so little work, and still get paid more than teachers who work till they drop. I've seen that, too.
je_reviens

je_reviens

January 16 2008, 16:52:08 UTC 13 years ago

I saw that you mentioned simply being called at the beach... but I was talking about the pressure of having responsibility for dozens or hundreds or thousands of peoples' livelihoods, plus being accountable to thousands of shareholders as well as having a dozen or more bosses aka The Board. I didn't see the correlation between that and how your work life is set up.

I was mainly disagreeing with your premise that people who work at office jobs have it relatively cushy as opposed to factory workers and laborers. I think that idea is a paradigm in our society and it's simply not true. More anectdotally I have known several people who left corporate careers for jobs like working for the postal service or hairdressing or even factory work and they all said they were much happier -- precisely because being able to leave work at work was much less physically and mentally draining on them.

As for the public school thing... well you got me. I am a product of the Chicago Public School system. The union also keeps teachers on the payroll who would have been fired at any other job. The system is rather flawed -- I have absolutely no idea how to begin improving it. So I do what I can -- make the best product I can and make it as useful as possible for the good teachers and the bad ones too. And hope the administrators will buy it.
moon_ferret

moon_ferret

January 16 2008, 18:44:43 UTC 13 years ago

I once did a graph to show that I make less than one quarter of the pay working for people that I am four times smarter than.

Only the Shadowy Conspiracy of Admins was allowed to see that graph. *They* all loved it...
ysabetwordsmith

ysabetwordsmith

January 16 2008, 18:48:35 UTC 13 years ago

Sadly, this is often true.

On the other hand, this was my high school's cheer, which was also often true:

Tangent, secant, cosine, sine
3.14159
We don't care if you win today --
You're gonna work for US some day!
the_7th_guest

the_7th_guest

January 17 2008, 02:08:48 UTC 13 years ago

I read the article-pretty interesting topic. As an admin assistant, I have often felt the strain of working my butt off and sometimes feeling like I am not being compensated fairly, but in my company in particular, our CEOs work very hard and our company consistently gives out shareholder dividends each year to our shareholders. This is because our company is a consistenly good company. So in the article, while it does state that 'typical' CEOs aren't making much for their shareholders, I guess my company is not typical as it were. I agree that 300 percent more pay for a CEO is a bit outrageous, considering how much work that your typical secretary/admin does on a daily basis. Good topic!
ysabetwordsmith

ysabetwordsmith

January 17 2008, 02:35:13 UTC 13 years ago

There are plenty of things that companies can do to encourage loyalty and hard work, such as:

When profits rise, share the bounty with raises, bonuses, or other perks for most or all workers, not just the top layer.

Express appreciation when people are doing a good job. Everything from a casual word to a framed certificate counts.

Have some flexibility in the schedule to account for family needs.

Make the workplace environment pleasant and tolerable. That alone can make you hugely popular with any group that frequently gets stomped.

You can also *save* a lot of money, sometimes, by taking suggestions from workers who are in a position to spot more efficient ways of doing things.

Basically, people will protect and promote a company that makes them feel important and part of its community. But if they feel like they're being screwed, then they'll loaf when they can and steal your paperclips when you're not looking and photocopy their backside on office equipment. That's human nature. You want your employees to be on *your* side.