Got the following email yesterday from MNB reader Mark Heckman about my continued coverage of the wage disparity issue:
Legislation and regulation, both new and old, have failed to narrow the gap between the haves and the have nots. This egalitarian approach, while virtuous as a notion, does not exist successfully in the world, despite government’s insatiable appetite to intervene and control. The underlying reasons for the growing “inequality of compensation” are socially and economically based and do not lend themselves to be solved by more rules and regulations that in many cases end up punishing those they are designed to help.
The formula is simple. The wage gap has a direct linear relationship with the disparity of value an individual has to the organization and the ability to replace that individual with someone of equal or superior talent. If we expect the service counter folks at McDonalds to make $15/hr as a means of manipulating “income equality”, instead of narrowing the wage gap the result will expensive fast food, poor service, fewer jobs, and a business death spiral for McDonald franchisees. No winners there. On the other hand, if the Feds stay out of the way and let businesses grow without undo punitive repercussions, the job market will tighten and McDonalds will have to pay higher wages to attract fewer available workers, who now have more options.
If the Federal government truly covets a meaningful role in narrowing the wage gap, they would do well in looking at reforming the existing “entitlement programs” that foster complacency, destroy the nuclear family, and produce a increasingly “uneducated and unqualified" work force. Good paying jobs are out there with our current social support system, qualified workers are not.
We do agree that CEO compensation packages should be made public and totally transparent. But we part ways if you advocate that the Feds need to legislate caps and ratios for how much they receive. That responsible should rest with the board of directors, the stockholders, and ultimately the customers of that enterprise.
I don’t think I’ve ever supported so-called living wage legislation, though I would not count myself among the people who even seem to think that minimum age legislation ought to be eliminated. I think there ought to be some protections against people being exploited, and they ought to make common sense.
The only place I would have government taking a specific stand would be when it comes to companies that are taking public money. It strikes me as farcical if a company bids for a government project, gets the project because of a low bid, but then pays people so little that they have to take public assistance, funded by taxpayers, in order to support themselves.
No, I think the pressure has to come from citizens who decide not to do business with companies that seem to be exploiting their employees, and investors who decide not to invest in companies that reward top execs in ways that seem totally out of whack compared to the people on the front lines.
I think that laws requiring disclosure of such patterns in a clear and transparent will pave the way for consumers and investors to make such decisions and to form such grass-roots movements. In the end, I think, that’s what some public companies really are afraid of … because special interests can spend a lot of money to lobby the government, but it is harder to lobby grass roots citizens, especially when they take up a cause that is just and right.
Make sense?
Another reader chimed in:
I learned, like most of us, early in life that “life isn’t fair” but after viewing the ‘Wealth Inequality in America’ video that you posted on Thursday I feel sick. I’m no economist but this distribution of wealth (and the rate at which it continues to progress) cannot be ideal for the overall well-being of our nation.
I’d love to be able to jump up on my soapbox and shout out the ideal answer, but I just don’t have it. Raising the minimum wage (unless it was increased to $50+/hr) wouldn’t begin to move the distribution needle (although I’m sure it would kill our economy). Perhaps it is the outdated and confusing tax code that has driven the economy (and wealth distribution) in this direction. Or, we can all point our fingers at Washington and blame the broken two-party system along with the lobbyists and the incredible amount of money that is poured into campaigns, etc. but what does that get us?
Are we (90% of Americans) just pawns, running around and getting excited about meaningless things (in the big picture), in a game that is being run by the wealthiest 1% of Americans?
It’s time to start the conversation – what should we do? Should we do anything? Is it possible to change the distribution of wealth? If we could, should we? Will we? Ugh!
On another subject, MNB reader Elizabeth Archerd wrote:
An MNB user yesterday said that GMO labeling would increase food prices. This claim gets repeated over and over by the GMO-using food companies, but several studies have indicated there is no truth to the matter. The companies already label GMO-containing products to ship oversees. Adding the wording to labels here will have no impact at all.
Good try, though.
On yet another subject, MNB reader Karen Trom wrote:
I forwarded your story about Kraft Foods attempting to attract younger workers by moving to downtown Chicago to my 29 year old daughter who is a logistics specialist in Chicago. Her response?
“The only problem with being here (downtown) is you get fresh out of college fools who still want to party and act like $40,000/year millionaires. They have zero experience and aren't motivated to do much because they're just happy to get a paycheck. I think it must've started happening with kids who went to college when the economy crapped out.”
If my daughter sounds like an old person, what am I?
I know the feeling.
Legislation and regulation, both new and old, have failed to narrow the gap between the haves and the have nots. This egalitarian approach, while virtuous as a notion, does not exist successfully in the world, despite government’s insatiable appetite to intervene and control. The underlying reasons for the growing “inequality of compensation” are socially and economically based and do not lend themselves to be solved by more rules and regulations that in many cases end up punishing those they are designed to help.
The formula is simple. The wage gap has a direct linear relationship with the disparity of value an individual has to the organization and the ability to replace that individual with someone of equal or superior talent. If we expect the service counter folks at McDonalds to make $15/hr as a means of manipulating “income equality”, instead of narrowing the wage gap the result will expensive fast food, poor service, fewer jobs, and a business death spiral for McDonald franchisees. No winners there. On the other hand, if the Feds stay out of the way and let businesses grow without undo punitive repercussions, the job market will tighten and McDonalds will have to pay higher wages to attract fewer available workers, who now have more options.
If the Federal government truly covets a meaningful role in narrowing the wage gap, they would do well in looking at reforming the existing “entitlement programs” that foster complacency, destroy the nuclear family, and produce a increasingly “uneducated and unqualified" work force. Good paying jobs are out there with our current social support system, qualified workers are not.
We do agree that CEO compensation packages should be made public and totally transparent. But we part ways if you advocate that the Feds need to legislate caps and ratios for how much they receive. That responsible should rest with the board of directors, the stockholders, and ultimately the customers of that enterprise.
I don’t think I’ve ever supported so-called living wage legislation, though I would not count myself among the people who even seem to think that minimum age legislation ought to be eliminated. I think there ought to be some protections against people being exploited, and they ought to make common sense.
The only place I would have government taking a specific stand would be when it comes to companies that are taking public money. It strikes me as farcical if a company bids for a government project, gets the project because of a low bid, but then pays people so little that they have to take public assistance, funded by taxpayers, in order to support themselves.
No, I think the pressure has to come from citizens who decide not to do business with companies that seem to be exploiting their employees, and investors who decide not to invest in companies that reward top execs in ways that seem totally out of whack compared to the people on the front lines.
I think that laws requiring disclosure of such patterns in a clear and transparent will pave the way for consumers and investors to make such decisions and to form such grass-roots movements. In the end, I think, that’s what some public companies really are afraid of … because special interests can spend a lot of money to lobby the government, but it is harder to lobby grass roots citizens, especially when they take up a cause that is just and right.
Make sense?
Another reader chimed in:
I learned, like most of us, early in life that “life isn’t fair” but after viewing the ‘Wealth Inequality in America’ video that you posted on Thursday I feel sick. I’m no economist but this distribution of wealth (and the rate at which it continues to progress) cannot be ideal for the overall well-being of our nation.
I’d love to be able to jump up on my soapbox and shout out the ideal answer, but I just don’t have it. Raising the minimum wage (unless it was increased to $50+/hr) wouldn’t begin to move the distribution needle (although I’m sure it would kill our economy). Perhaps it is the outdated and confusing tax code that has driven the economy (and wealth distribution) in this direction. Or, we can all point our fingers at Washington and blame the broken two-party system along with the lobbyists and the incredible amount of money that is poured into campaigns, etc. but what does that get us?
Are we (90% of Americans) just pawns, running around and getting excited about meaningless things (in the big picture), in a game that is being run by the wealthiest 1% of Americans?
It’s time to start the conversation – what should we do? Should we do anything? Is it possible to change the distribution of wealth? If we could, should we? Will we? Ugh!
On another subject, MNB reader Elizabeth Archerd wrote:
An MNB user yesterday said that GMO labeling would increase food prices. This claim gets repeated over and over by the GMO-using food companies, but several studies have indicated there is no truth to the matter. The companies already label GMO-containing products to ship oversees. Adding the wording to labels here will have no impact at all.
Good try, though.
On yet another subject, MNB reader Karen Trom wrote:
I forwarded your story about Kraft Foods attempting to attract younger workers by moving to downtown Chicago to my 29 year old daughter who is a logistics specialist in Chicago. Her response?
“The only problem with being here (downtown) is you get fresh out of college fools who still want to party and act like $40,000/year millionaires. They have zero experience and aren't motivated to do much because they're just happy to get a paycheck. I think it must've started happening with kids who went to college when the economy crapped out.”
If my daughter sounds like an old person, what am I?
I know the feeling.
- KC's View:
