I found it hard to sample just one of the intriguing charts in the post by Jonathan Rothwell at Brookings questioning the prevailing wisdom on why the 1% earn so much more than the rest of us. I settled on this one. In the post the author rejects the usual explanations—capital vs. labor share, skills, and technology:
As economist Dean Baker points out, politicians and intellectuals often champion market competition—but what they mean by that is competition among low-paid service workers, production workers, or computer programmers who face competition from trade and immigration, while elite professionals sit behind a protectionist wall. Workers in occupations with no higher educational requirements see their wages held down by millions of other Americans denied a high-quality education and competing for relatively precious vacancies.
For lawyers, doctors, and dentists— three of the most over-represented occupations in the top 1 percent—state-level lobbying from professional associations has blocked efforts to expand the supply of qualified workers who could do many of the “professional†job tasks for less pay.
Don’t bother appealing to market forces. There is no effective market in any of the sectors in which most of the top earners work. Various forms of market restriction preclude it.
IMO that’s explanation for what has happened over the last 35 years. Wages have risen in jobs that have been protected; they haven’t (or even declined) when they haven’t.
If you’re at all concerned about income inequality, that suggests several possible strategies for remediation:
- Tax or otherwise constrain wage growth in the protected jobs.
- Stop protecting the protected jobs.
- Protect all of the jobs.
Which of those strategies do you think will generate the least push-back? Or do you have a different solution to propose?
Most of the “protected” jobs are in the public service sector or under the powerful and oftentimes immovable fist of union rule and it’s highly paid leadership. I think undercutting such power would help, allowing salaries to be more proportional in all private/public sector jobs. It would also remedy some of the fiscal abuses rendered on local/ state economies. Lastly, muting the union stronghold would implement the notion that job performance does count, giving the opportunity for merit-based increases of salaries rather than solely on seniority and tenure. This covers everything from production line workers, government employees, those in manufacturing, and importantly in the area of teachers and health care providers.
For instance, my God son works in a S. CA government job, repairing military vehicles. He has a super-changed work ethic, but is repeatedly criticized for working too hard, not wanting to go on breaks before he’s finished a piece of his assigned project. Others around him he calls “lazy,” and loving the slow, lackadaisical pace that such a government job “demands” of them. I suspect he won’t last long on the job….
Jan:
http://nation.foxnews.com/politics/2011/03/03/fat-cat-union-salaries-exposed
The average auto worker:
And the average teacher earns about 45k a year. Add, say, 50% for benefits and you get $75k a year, give or take. Fair enough?
Now, compare the union boss’s salary to that of the workers. The head of the UAW earns about three times what the workers earn, and the head of the teachers union earns about five times as much as the average teacher.
The CEO of Starbucks earns 150 million. The average Starbucks barista makes less than 20k. So the CEO earns 7,500 times as much as his employees. Not three times as much, not five times as much, seven thousand five hundred times as much.
You need to rethink that “highly paid leadership” bull. While you’re at it, rethink your reflexive hostility to unions – they are the only voice workers had to counter the depredations of employers who pay themselves fortunes.
In Chicago the starting pay for a new teacher with bachelors only for a ten month position is $50K. Median salary for Chicago teachers is $80K for a ten month position. They don’t pay Social Security and the CPS picks up their contribution to their pensions. Pensions are defined benefit. And they get tenure.
Yes, the few professions that are actually necessary (doctors and teachers, for example) are the real burdens to us all. If only these parasites would take pay cuts I would not have to pay taxes, and we could make America even crappier and more like Mississippi. I mean, I’m not going to send my kids to the Trump K-12 school system, or go to a doctor who spent a year ‘at’ the University of Phoenix, but that’s not really important right now. The important thing is to cut costs; otherwise our feudal system of child labor will never take flight!
Just for a comparison, the median salary of a teacher is 56K and the median salary of a marketing manager is 127K (according to US News). So the idea that teachers are getting away with anything compared to what somebody who sits in on creative meetings and adds a few comments is laughable.
Maybe the reason nobody is sticking around in Chicago is less economic than spiritual–you can’t live in a place where everybody spends their time stewing in bile about how overpaid public servants are.
I think adage adequately covered Chicago Teachers. Hard to imagine it’s fundamentally different elsewhere.
I left the steel industry in 1986 and am dated, as is this link. But the products I made served the auto and appliance industries so I spent a lot of time in and around those industries as well as steel. The number about mid-way through the link article at about $55/hr is the one in would have picked if asked to guess. The highs are propaganda because they amortize retiree costs over the current work force. A real cost, but not compensation to current workers. The lows are propaganda because they don’t count the obvious role of benefits and bonuses in compensation.
http://www.factcheck.org/2008/12/auto-worker-salaries/
As for the question posed, the second dot point is certainly the correct approach. The other two would be disasters; butchered beyond all recognition. But Dave did ask for the least pushback: none of the above. But best to work on the second.
You would apparently be surprised to know, Michael, there is an active market for executive talent, and that they don’t “pay themselves.” I’d also be wary of owning Starbucks stock if one of those baristas, whose primary skill seems to be inquiring about light or dark roast and how much room to leave for cream, should be placed in charge of the organization.
I’m not stewing in bile, MM. I’m just pointing out that the city can’t afford to pay the compensation that non-performing teachers are demanding. The median income for a family of four in Chicago is less than $40K.
How do I know the city can’t afford it? CPS is borrowing to pay operating expenses at usurious interest.
Guarneri:
Really? They don’t pay themselves? CEO’s don’t often sit on the board that sets compensation? Tell me another.
In any event, my point is made without refutation: Jan’s parrot-like repetition of the Fox/Limbaugh/Reagan lie about overpaid union execs is refuted.
This of course will in no way change what she believes.
http://www.kansascity.com/news/business/workplace/article67097907.html
Read and cry for me.
There are a lot of possible reactions but I guess I should just leave it at that’s terribly sad.