Minimum Wage --Prevents-- Wealth Acquisition!

[EdwardBaiamonte]

He will have to pay higher wages why ?.

dear. I have explained it 132 times but you lack the IQ to understand.

Why? if he doesn't a competitor will, he will lose his best workers, and go bankrupt!!
that is why an average wage is $34 not $1. Did 133 time finally sink in??????

 

[EdwardBaiamonte]

A stable company usually expects to have a 10% utility over sales

too stupid you are not listening. No company is stable as competition is always driving profits toward $0 and bankruptcy.

See why we say a liberal will be stupid!!

 

[CultureCitizen]

He will have to pay higher wages why ?.

dear. I have explained it 132 times but you lack the IQ to understand.

Why? if he doesn't a competitor will, he will lose his best workers, and go bankrupt!!
that is why an average wage is $34 not $1. Did 133 time finally sink in??????

But all those workers are under minimum. Clearly there is an oversupply of labour. So he looses some and can hire new ones. No problem there.

 

[Andylusion]

He will have to pay higher wages why ?.

dear. I have explained it 132 times but you lack the IQ to understand.

Why? if he doesn't a competitor will, he will lose his best workers, and go bankrupt!!
that is why an average wage is $34 not $1. Did 133 time finally sink in??????

But all those workers are under minimum. Clearly there is an oversupply of labour. So he looses some and can hire new ones. No problem there.

You are talking about that, as if it is static.

The supply of labor is dynamic. The value of labor is dynamic.

Moreover, value of labor isn't monolithic, and nor is the supply of labor monolithic.

For example, there is a need for accountants in Columbus Ohio. You see ads for it all the time.

Maybe there is a massive supply of "labor", but that doesn't mean that because there are a million people looking for work, that these companies can pay $9/hr for an accountant.

But the value of the free-market capitalists system, is that the dynamic fluidity of the system compensates for changing economic reality.

When there is an over abundance of labor, wages fall, which allows more labor to be purchased. The number of jobs, and thus demand for labor will increase as wages fall.

Equally, as more jobs are created because labor is cheaper, the supply of labor will be used up, reducing the abundance. That will in turn, start driving up wages.

It's a self correcting cycle, that supplies the most benefit for the most people.

Minimum wage laws, and other regulations, break that system. We have tons of unemployed, and few jobs, because the price of labor is artificially driven up, even though there is a huge need for low-skilled jobs.

 

[CultureCitizen]

For example, there is a need for accountants in Columbus Ohio. You see ads for it all the time.

Maybe there is a massive supply of "labor", but that doesn't mean that because there are a million people looking for work, that these companies can pay $9/hr for an accountant.

Yes, but we are not discussing accountants, who are well above the MW.
We are only interested in those who would make less than MW.

He will have to pay higher wages why ?.

dear. I have explained it 132 times but you lack the IQ to understand.

Why? if he doesn't a competitor will, he will lose his best workers, and go bankrupt!!
that is why an average wage is $34 not $1. Did 133 time finally sink in??????

But all those workers are under minimum. Clearly there is an oversupply of labour. So he looses some and can hire new ones. No problem there.

You are talking about that, as if it is static.

The supply of labor is dynamic. The value of labor is dynamic.

Moreover, value of labor isn't monolithic, and nor is the supply of labor monolithic.

For example, there is a need for accountants in Columbus Ohio. You see ads for it all the time.

Maybe there is a massive supply of "labor", but that doesn't mean that because there are a million people looking for work, that these companies can pay $9/hr for an accountant.

But the value of the free-market capitalists system, is that the dynamic fluidity of the system compensates for changing economic reality.

When there is an over abundance of labor, wages fall, which allows more labor to be purchased. The number of jobs, and thus demand for labor will increase as wages fall.

Equally, as more jobs are created because labor is cheaper, the supply of labor will be used up, reducing the abundance. That will in turn, start driving up wages.

It's a self correcting cycle, that supplies the most benefit for the most people.

Minimum wage laws, and other regulations, break that system. We have tons of unemployed, and few jobs, because the price of labor is artificially driven up, even though there is a huge need for low-skilled jobs.

I do not disagree with the market principles, I give them for granted. But again you seem to be missing the rate of change. Market corrections are not immediate and oversupplies causes market failures.

It's a self correcting cycle, that supplies the most benefit for the most people.
No , this is not correct.
And it actually doesn't happen if the production efficiency grows faster than the market growth ( internal plus external ) .

Also in the specific cases I mention ( labour is a small fraction of production cost) , a decline of 50% in wayes will not duplicate the number of posts, there will probably be only 5% more jobs. Conversely an increas of 50% in wages will only decreasy by 5% the available jobs.

 

[Boss]

Poverty : Yes, there is a fuzzy standard of $10 per day person ( fuzzines comes from the fact that i heard that number 5 years ago and it has to be adjusted for inflation and purchase parity ) . There is a multidemensional definition of poverty ( see link )
- Access : Education , sufficient food, electricity, clean water, sanitation, finished floor in household.
- Assets : TV , Radio or Computer / Transport ( bike , horse or better ) .
When evaluating historical poverty, some components have to be discarded , like electricity and ownership of tv, radio .

I fully disagree with you regarding the number of poor in the US. Low poverty rates are a post-WWII situation ( see links ). Much of it is due to increased productivity.

Well Boss,
As it is usual I don't think we can agree on this one.

So you just explained beautifully why we can't really pinpoint a definition of "poverty" over time because the parameters for what one would consider poverty are constantly changing and pretty much subjective in nature anyway... but still... you don't think we can agree on this one? LOL

The point I made was, when you said we had "50% poverty" ...you are referring to over-hyped data which is subjective and you're specifically talking about at time in history where we were hurting severely on an economic level. Enter Socialism to save the day! This is how Socialism preys on societies. It catches them at their weakest point and plays on their emotions. It promises a better future if you'll only hand over your liberty and allow government to control more of your life. It never delivers on the promise.

I love this lyric in an Alabama song, from Song of the South:

Well somebody told us Wall Street fell
But we were so poor that we couldn't tell
Cotton was short and the weeds were tall
But Mr. Roosevelt's a gonna save us all

Economic historians have differing opinions on how we recovered from the Great Depression but most will admit the policies of FDR in his first term did not turn things around. The real turning point was when industry was mobilized for the war effort. Were ALL of FDRs policies bad? No, some were very great and successful programs, like TVA. But we can't rationalize what may have happened if FDR had been a free market capitalist instead of a socialist. We didn't take that road.

In other words, the only thing we have to measure FDRs "success" against is the condition which existed at the time he first took office.... the worst economic condition our nation had ever experienced. So this leads us to how we've gone through 82 years believing things like the minimum wage are great and wonderful, when that simply isn't necessarily true and I argue that it's patently false.

 

[CultureCitizen]

So this leads us to how we've gone through 82 years believing things like the minimum wage are great and wonderful, when that simply isn't necessarily true and I argue that it's patently false.

Well, I've already mentioned some conditions in which I could agree to drop the MW.
But you seem to have dodged my comment on aggregate demand, which I consider to be particularly important and delicate during a recession ( even more if it is a global recesion ) .

 

[Andylusion]

For example, there is a need for accountants in Columbus Ohio. You see ads for it all the time.

Maybe there is a massive supply of "labor", but that doesn't mean that because there are a million people looking for work, that these companies can pay $9/hr for an accountant.

Yes, but we are not discussing accountants, who are well above the MW.
We are only interested in those who would make less than MW.

He will have to pay higher wages why ?.

dear. I have explained it 132 times but you lack the IQ to understand.

Why? if he doesn't a competitor will, he will lose his best workers, and go bankrupt!!
that is why an average wage is $34 not $1. Did 133 time finally sink in??????

But all those workers are under minimum. Clearly there is an oversupply of labour. So he looses some and can hire new ones. No problem there.

You are talking about that, as if it is static.

The supply of labor is dynamic. The value of labor is dynamic.

Moreover, value of labor isn't monolithic, and nor is the supply of labor monolithic.

For example, there is a need for accountants in Columbus Ohio. You see ads for it all the time.

Maybe there is a massive supply of "labor", but that doesn't mean that because there are a million people looking for work, that these companies can pay $9/hr for an accountant.

But the value of the free-market capitalists system, is that the dynamic fluidity of the system compensates for changing economic reality.

When there is an over abundance of labor, wages fall, which allows more labor to be purchased. The number of jobs, and thus demand for labor will increase as wages fall.

Equally, as more jobs are created because labor is cheaper, the supply of labor will be used up, reducing the abundance. That will in turn, start driving up wages.

It's a self correcting cycle, that supplies the most benefit for the most people.

Minimum wage laws, and other regulations, break that system. We have tons of unemployed, and few jobs, because the price of labor is artificially driven up, even though there is a huge need for low-skilled jobs.

I do not disagree with the market principles, I give them for granted. But again you seem to be missing the rate of change. Market corrections are not immediate and oversupplies causes market failures.

It's a self correcting cycle, that supplies the most benefit for the most people.
No , this is not correct.
And it actually doesn't happen if the production efficiency grows faster than the market growth ( internal plus external ) .

Also in the specific cases I mention ( labour is a small fraction of production cost) , a decline of 50% in wayes will not duplicate the number of posts, there will probably be only 5% more jobs. Conversely an increas of 50% in wages will only decreasy by 5% the available jobs.

Well if you are talking about black market labor, the point is mute, since no labor laws will ever control the black market.

In fact, one would argue that labor laws actually help to grow the black market labor. Greece being the biggest example, where people routinely work in the black market, specifically to avoid the laws.

No, I accept that market changes are not fun, and have problems. No, I don't accept that a change in the market is a "market failure". It's not a failure. It's a change. Change happens. It's natural and normal.

All of your assumptions about the factory, are based on short-term effects. A given factory will have an invested capital with a fixed point of labor cost. In other words, when they design the factory, they will base the level of automation, on the level of labor costs at that given time.

Short term wage changes, will likely not effect the employment level at the factory.

They are not going to hire an additional person to sweep the floors, because wage rates went down. Nor are they going to fire a line technician because wages went up.

The entire setup requires a specific number of workers, with limited flexibility, to operate the factory.

We're looking at the long-term aspect.

In the long term... a 5% increase in wages, means a decline in profitability of the product.

One fatal flaw in the entire thought experiment, is that when you look at the average 'factory', you are limiting the scope of labor you refer too. Yes, only about 15% of a cars price is labor into building the car.

25% is materials for the cars.
50% is overhead (Marketing, HR, administration, engineers)
10% is sunk capital costs (the building, the equipment, the setup)
And somewhere in the rough number...
1% to 3% is profit. Ford latest numbers are a 2.3% profit margin.

Now here's the problem.... if you drive up labor costs by 5%... you virtually eliminate the profit margin.

But let's even say it's still profitable..... You tend to ignore that those materials to build the car... they include labor at their sources.

The company who builds the radiators.... they have labor costs. Does that 5% increase in labor cost only effect the car factory, and not the radiator factory that provides parts to the car factory? What about the engine factory? Or the car seats, or the stereo, or the computerized systems, or the fenders or doors?

All of those parts, nearly all of them with few exceptions, have a strong labor component. A 5% increase in labor costs would drive up all of those parts, which would also drive up that material costs.

That profit margin shrinks and shrinks, and it was only 2.3% to begin with.

And by the way, what about the labor costs of the company? The labor used to build the manufacturing plant. Does that 5% increase effect those people?

So when the company decides whether or not to build a new product, they will have to consider will building it be worth it? Well the new higher labor cost make building the new plant uneconomical? Will the cost to support the new plant be unaffordable? Will getting materials be impractical?

And will the new, smaller profit margin, be worthwhile?

See, the existing plant... might be safe, not because the higher labor cost isn't harmful, but rather because the capital costs already invested is so high, they can't get their money out of it. So even if 0.5% profit margin isn't worth it.... since the plant is already built, they keep going as long as it's profitable. Short term.

But future growth, future employment, and future jobs... all of those in the long term are harmed.

 

[Boss]

Well, I've already mentioned some conditions in which I could agree to drop the MW.
But you seem to have dodged my comment on aggregate demand, which I consider to be particularly important and delicate during a recession ( even more if it is a global recesion ) .

Again, my argument is not that we should drop the MW. Perhaps we should... but is it even politically possible? Toothpaste is out of the tube. Eliminating it now might be even worse policy because ostensibly, it would then not apply for some capitalists while others continued to use it as a baseline that never changed or "rule of thumb" even though it was no longer law of the land. So I think we are sort of stuck with it whether we like it or not now.

My OP argument is that it hasn't worked as planned or we wouldn't see liberals screaming the same "living wage" mantra, 82 years later. What it has effectively served to do is limit wealth acquisition... whether intentional or not. Labor cost is no longer subject to laws of supply and demand, the cost is baselined according to an arbitrary number set by government. This replaces the individual's ability to negotiate the value of their labor according to supply and demand.

Meanwhile, every time things get bad economically, liberals run around screaming, "raise the MW!" And eventually, we do! ...Have we EVER gone back and lowered it when economic times were good? Nope! So it has served as a ratchet policy, ultimately ratcheting up inflation for everyone. It does not work to improve or achieve a "living wage" because that mythical number continues to change as we continue to chase our tails with a failed policy.

Now you might be asking, Boss, what do want? You're saying it's failed policy but you also don't think we can get rid of it... I think we should render it obsolete and irrelevant. Stop pretending it's some kind of magical solution or fix, which it hasn't been for 82 years. Realize that the only benefit has been to prevent corporatists from overtly exploiting advantage in bad economic times. Understanding that creating more demand for labor is the only real solution for better wages.

 

[CultureCitizen]

Now here's the problem.... if you drive up labor costs by 5%... you virtually eliminate the profit margin.

Well this actually depends on what you mean by driving up labour costs by 5% ?
Giving a 5% rise to factory workers or a 30%?
A a general increase of 5% over a 15% is 0.75% which can probably be solved by rising prices 0.75%.
BUT we are not even talking of increasing the salary for everyone , just those whose wage would be belos the MW. So the number is actually a lot smaller.

Of course, many entrepreneurs assume that everything will rise proportionally ( materials and services), so the quick and dirty solution is to increase prices accordingly.

I used the pharma example because I saw the cost breakdown , in their case selling and marketing costs represented a whooping 20% - 30%. While labour ( production labour ) should be kept below 3%. That's ingrained in the business model.

 

[CultureCitizen]

Meanwhile, every time things get bad economically, liberals run around screaming, "raise the MW!" And eventually, we do! ...Have we EVER gone back and lowered it when economic times were good? Nope! So it has served as a ratchet policy, ultimately ratcheting up inflation for everyone. It does not work to improve or achieve a "living wage" because that mythical number continues to change as we continue to chase our tails with a failed policy.

Well, I think MW should be more flexible, in that we agree. I've worked with phosphorous mining companies where labour costs were not high , but utility margins were very , very low (Comodity trading is a tough business), while I've seen other companies who keep many of their employees on MW squander resources at many levels ( which really pisses me off).
No, not all industry sectors are created equal.

 

[CultureCitizen]

That profit margin shrinks and shrinks, and it was only 2.3% to begin with.

And by the way, what about the labor costs of the company? The labor used to build the manufacturing plant. Does that 5% increase effect those people?

Well Andy,
My problem are those companies who :
A) Have an extremely large variation between salaries or
B) Have a very healthy profit margin.
2.3% is not a healthy profit margin for a mature company ( yes, I've seen companies with a similar profit margin , but they trade with comodities which have no differentiator). There is probably something wrong in their operation. Other car manufactures have healthier profit margins. Again , as a rule of thumb this should be closer to 10% ( see link for example ).

A) During the early 90's it used to be that top executives earned on the average 80 times the average income of employees, high , but still acceptable.
That proportion has been increaing a lot lately and I certainly doubth that CEOs efficiency has increased proportionaly during the last 10 years.

B) Companies that continue to expand are not a problem. The problem comes when they stop investing and go into an asset buying frenezy creating asset bubbles ( that's going on right now as I mentioned in another post).

In general a highly unequal income distribution has that effect : asset bubbles. Wealthy people tend to secure their wealth ( which is normal ) usually in the form of real estate, but it can be any high value asset ( diamonds, gold , silver ). This diverts resources from production and creates asset bubbles. Those same resources could increas production if allocated at the lower quintile

Financial Statements for Toyota Motor Corp (ADR) - Google Finance

 

[Andylusion]

Meanwhile, every time things get bad economically, liberals run around screaming, "raise the MW!" And eventually, we do! ...Have we EVER gone back and lowered it when economic times were good? Nope! So it has served as a ratchet policy, ultimately ratcheting up inflation for everyone. It does not work to improve or achieve a "living wage" because that mythical number continues to change as we continue to chase our tails with a failed policy.

Well, I think MW should be more flexible, in that we agree. I've worked with phosphorous mining companies where labour costs were not high , but utility margins were very , very low (Comodity trading is a tough business), while I've seen other companies who keep many of their employees on MW squander resources at many levels ( which really pisses me off).
No, not all industry sectors are created equal.

Which companies?

 

[CultureCitizen]

Which companies?

Which companies what ? squander resources?
Oh , phararma. I can't say the specific name of the company, sory, I signed a confidentiality agreement.

 

[Wyatt earp]

Meanwhile, every time things get bad economically, liberals run around screaming, "raise the MW!" And eventually, we do! ...Have we EVER gone back and lowered it when economic times were good? Nope! So it has served as a ratchet policy, ultimately ratcheting up inflation for everyone. It does not work to improve or achieve a "living wage" because that mythical number continues to change as we continue to chase our tails with a failed policy.

Well, I think MW should be more flexible, in that we agree. I've worked with phosphorous mining companies where labour costs were not high , but utility margins were very , very low (Comodity trading is a tough business), while I've seen other companies who keep many of their employees on MW squander resources at many levels ( which really pisses me off).
No, not all industry sectors are created equal.

Where and what companies?

 

[Boss]

Meanwhile, every time things get bad economically, liberals run around screaming, "raise the MW!" And eventually, we do! ...Have we EVER gone back and lowered it when economic times were good? Nope! So it has served as a ratchet policy, ultimately ratcheting up inflation for everyone. It does not work to improve or achieve a "living wage" because that mythical number continues to change as we continue to chase our tails with a failed policy.

Well, I think MW should be more flexible, in that we agree. I've worked with phosphorous mining companies where labour costs were not high , but utility margins were very , very low (Comodity trading is a tough business), while I've seen other companies who keep many of their employees on MW squander resources at many levels ( which really pisses me off).
No, not all industry sectors are created equal.

Well I think MW is an abomination that should have never existed. It destroys free market capitalist principles and places our individual liberty to negotiate in the hands of government... And over time, this has resulted in a lower standard of living that could have potentially been realized by average Americans using free market principles.

Not all industry sectors are equal, not all industries are equal, not all companies or bosses are equal and not all employees or people are equal. So what makes anyone think a standardized wage is fair?

 

[Andylusion]

That profit margin shrinks and shrinks, and it was only 2.3% to begin with.

And by the way, what about the labor costs of the company? The labor used to build the manufacturing plant. Does that 5% increase effect those people?

Well Andy,
My problem are those companies who :
A) Have an extremely large variation between salaries or
B) Have a very healthy profit margin.
2.3% is not a healthy profit margin for a mature company ( yes, I've seen companies with a similar profit margin , but they trade with comodities which have no differentiator). There is probably something wrong in their operation. Other car manufactures have healthier profit margins. Again , as a rule of thumb this should be closer to 10% ( see link for example ).

A) During the early 90's it used to be that top executives earned on the average 80 times the average income of employees, high , but still acceptable.
That proportion has been increaing a lot lately and I certainly doubth that CEOs efficiency has increased proportionaly during the last 10 years.

B) Companies that continue to expand are not a problem. The problem comes when they stop investing and go into an asset buying frenezy creating asset bubbles ( that's going on right now as I mentioned in another post).

In general a highly unequal income distribution has that effect : asset bubbles. Wealthy people tend to secure their wealth ( which is normal ) usually in the form of real estate, but it can be any high value asset ( diamonds, gold , silver ). This diverts resources from production and creates asset bubbles. Those same resources could increas production if allocated at the lower quintile

Financial Statements for Toyota Motor Corp (ADR) - Google Finance

I thought we were talking about a factory. Not the entire company. The entire company incorporates many different business aspects, many that produce a profit.

I was looking at a factory, because you said "factory".

The individual profit margin on a single average factory, is very low.

Ford Motor company, the corporation, makes a higher profit margin, because they operate different businesses with better profitability. A significant chunk of the profits Ford, GM, Toyota and others make these days, is with their financing.

But for companies that do not do different businesses, profit margins are often not very high.

Wal-Mart Stores Inc. (WMT) | Profitability

Walmart rarely makes 4% profit margin. Lately, it's 3.3%.

And by the way, the Toyota 10% profit margin is a fluke.
Toyota Motor Profit Margin (Quarterly) (TM)

If you look over the broader time line, Toyota averages about 5%.

Fiat Chrysler Automobiles Profit Margin (Quarterly) (FCAU)

Fiat, 3.5% roughly.

Nissan Motor Profit Margin (Quarterly) (NSANY)

Nissan about 4.5%

Honda Motor Profit Margin (Quarterly) (HMC)

Honda 4.5% on average.

Mazda Motor Profit Margin (Quarterly) (MZDAY)

Mazada 4.5%. (maybe lower)

Volkswagen Profit Margin (Quarterly) (VLKAY)

Volkswagen, 5%

In fact, very few of the companies have profit margins near 10%.

So either half the corporations in the world are all not healthy, or maybe you can have a completely healthy company, while making very slim margins.

Now to your complaints

1A: Who cares? It shouldn't matter to you how much the CEO makes, and his "efficiency" doesn't matter.

American was a much better country, when people minded their own business, and pulled their noses out of other people's butts. My brother-in-law just bought a house, and was putting up a fence in the back yard, when out came this dirty old man, and started lecturing him that he didn't like the type of fence he was putting up. MIND YOUR OWN BUSINESS.

My uncle owns his own company. If he wants to hire me, to sit on my butt and watch TV at the office, for $20/hr.... he can do that. It's *HIS* business. Not yours. You don't get a say in the matter. Either buy him out, and then you can make that call, or open your own business, and you can make up any rules you want.

Can I come to your home and tell you how you must live? No? Why not? Because you own it, and it's your home, and you're in charge.

Well the corporations are owned by the share holders, and they determine how much the CEO makes, and you don't have the moral authority to tell either the shareholders or the CEO, how much you think they ought to make. Mind your own business.

2A: CEOs don't make nearly as much as you think they make, and relative to the number of employees, it doesn't matter.

The CEO of Walmart made $19 Million. Walmart has 2 Million employees. That's $9.50 per employee.... less than a dollar a month.... less than 1/2 of a penny an hour.

The idea that somehow the employees are being ripped off because the CEO is getting $19 Million, is a joke. If you confiscated the entire compensation, and distributed it to all the employees, it would barely buy a value meal at Wendy's for the whole year.

See the problem? It's called math. And by the way, that's counting the entire compensation, which most of that is not money, and thus couldn't be dished out in employee wages. Walmart CEO cash payment is only $4 Million in cash, and thus only about $2 dollars a year, and pennies a month.

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

B: Companies do not invest, simply because they have money. Companies expand and grow, because there is profit that can be derived from doing so.

When you change the economic incentives, companies react to those changes.

For example, when you increase the minimum wage, you reduce the profitability, and thus the incentive to build a new store, or open a new plant, or invest in the country.

When you jack up health care costs, by mandating increased coverage, you reduce profitability and thus the incentives.

When you pass laws that make getting ride of bad employees costly, such as unemployment compensation, and other things, you reduce profitability, and thus the incentives.

When you pass regulations that control how you operate your business, you increase the cost of doing business, thus reducing the profitability, thus the incentives.

Companies do not invest in things, just because they have money in a bank account. They invest when there is a reason to invest.

Make conducting business in America more profitable, and these other issues you mention, will go away.

 

[Boss]

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

Because their whole entire argument is centered on juvenile jealousy and envy. These are spoiled little brats who never were disciplined as children. They never learned to be thankful for what they had or to have respect for what others had. Their parents were terrible role models who constantly complained about "the man keeping them down" and that's how they were raised to think. Most of them have no religion or ties to God whatsoever. They never were instilled with the values of virtue, they think it's perfectly normal to covet the belongings of their neighbors... this fuels their movements and drives their policies.

 

[CultureCitizen]

1A: Who cares? It shouldn't matter to you how much the CEO makes, and his "efficiency" doesn't matter.

Well all the free market system's goal is that : the efficient allocation of resources.

Frankly I couldn't care less about any CEO's performance , but, whenever I hear someone complaining that there are no incentives to invest or that profit margins are low , well franky I have to point out that consumer' don't have money to spend while proffits are going into re-purchasing of assets, so it is not a lack of resources preventing investment. It's just that climbing the asset bubbles is more profitable ( In this case the Fed is equally guilty for maintaining ZIRP ) ... until they burst.

... and frankly if households are in debt and have no money who do you expect to be buying the goods created by companies? and why would anyone invest in a shrinking debt ridden market?

The only way out , other than increasing debt is increasing the exports to a countries which currently has positive trade balances.

 

[CultureCitizen]

So if we can establish that the salaries paid to CEOs isn't even remotely harming the pay of employees.... then what exactly is the purpose of pointing out CEO pay? You just don't want them to earn more..... just because you can't stand others earning more? What's the point? If the CEO only made $200,000 a year, that wouldn't raise the pay of a single employee. So what is the purpose of complaining about it?

1) I don't really care how much an CEO earns.
2) That doesn't mean it doesn't harm the economy as a whole:
Lately much of the consumption has bee driven by an increase in private debt. This situation is not sustainable in the long run.
In order to have a stable economy an increase in productivity must be coupled with an increase in median wages.