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Even me, being about the largest "free market" and capitalism advocate around, hate that with a passion. The issue is the private club of ivy league college graduates that end up in each others board of directors - voting each other outragious packages and benifits even when the company does not perform. It's a flaw in the system and it indeed should be addressed through law legistlature.
At least, to a certain small degree, the stockholders themeselves are starting to press the issue. Look at that bum CEO in Home Depot, Nardelli, making $200 million a year and he was about the most hated incompetent worthless CEO in the industry. Home Depots stock sucked in his tenure. BOD kept on giving him salary raises. Finanly, the stockholders said enough is enough and forced his worthless a** out. So, maybe the system is working.
Come on now! Small businesses are the backbone of this country. A good CEO does more for the American economy than the $250 million dollar professional atheletes, actors, pop stars and other celebrities. A good CEO helps a company succeed and employees thousands of people. Most celebrities are all about themselves. In fact, their often bizarre lifestyles have negative consequences on impressionable members of our society who are captivated by the decadence of their fame (infamy???).
Yes, the system does work, imagine that. The Free Market will typically work everything out in the long run, thus the reason Unions have faded in recent decades.
That's pretty dogmatic... the idea that the free market creates this sort of perfect meritocracy where everybody eventually gets what they deserve. Maybe that could be the case if all labor markets and other markets were perfectly competitive, but they're not -- market failures like monopolies & oligopolies naturally come into being absent of government regulation, sometimes allowing companies to pay their employees far less than what their labor is worth in order to maximize profits. Unions help prevent this from happening, although they may take it too far some times --- but the labor force should always have a voice. It creates a better balance of power in the market.
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I'm from a textile/furniture town. When the Unions were voted into one of the nation's largest textile manufacturers, it was just a matter of time before the company couldn't compete and had to close its doors. This is what truly affects the middle and lower classes.
With unions, people may end up losing some jobs, especially if they're forced to compete with sweatshop workers and the like...
Without unions, there may be more jobs available but they start becoming a lot more similar to those sweatshop jobs.
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Put the blame on the Home Depot BOD if anyone, for agreeing to the employment contract, not the CEO for negotiating for what was in his best interests.
That's the problem with capitalism... every man for himself. There's no incentive for companies to turn increased profits into higher wages or lower prices unless it increases their profits even further.
Come on now! Small businesses are the backbone of this country. A good CEO does more for the American economy than the $250 million dollar professional atheletes, actors, pop stars and other celebrities. A good CEO helps a company succeed and employees thousands of people. Most celebrities are all about themselves. In fact, their often bizarre lifestyles have negative consequences on impressionable members of our society who are captivated by the decadence of their fame (infamy???).
Okay... but if a CEO makes $100,000,000 a year and his employees make $20,000 a year, in all likelihood has he really, honestly worked literally 5000 times harder throughout his life than all those workers?
That's pretty dogmatic... the idea that the free market creates this sort of perfect meritocracy where everybody eventually gets what they deserve. Maybe that could be the case if all labor markets and other markets were perfectly competitive, but they're not -- market failures like monopolies & oligopolies naturally come into being absent of government regulation, sometimes allowing companies to pay their employees far less than what their labor is worth in order to maximize profits. Unions help prevent this from happening, although they may take it too far some times --- but the labor force should always have a voice. It creates a better balance of power in the market.
With unions, people may end up losing some jobs, especially if they're forced to compete with sweatshop workers and the like...
Without unions, there may be more jobs available but they start becoming a lot more similar to those sweatshop jobs.
That's the problem with capitalism... every man for himself. There's no incentive for companies to turn increased profits into higher wages or lower prices unless it increases their profits even further.
That's the point. Companies are profit-driven. Without profit, there would be no economic expansion, no jobs, no wages. Free competition is what keeps the markets honest. Isn't it ironic that the entity you say prevents monopolies actually participates in and funds the largest monopoly in the World, Public Education. This is the prime example of the shortcomings of governmental regulations limiting free market competition and the substandard products it produces.
Why should the labor force have any say into how a company operates, who it hires, how much it pays? The owners of the company should have sole responsibility in these aspects of a company's operations. If the company doesn't pay enough, then it will lose good workers to a competitor, thus its incentive to pay a fair, but productive wage.
Okay... but if a CEO makes $100,000,000 a year and his employees make $20,000 a year, in all likelihood has he really, honestly worked literally 5000 times harder throughout his life than all those workers?
Maybe not harder, but probably smarter. In most cases, the employer, be it the BOD or shareholders, will pay an employee his/her perceived value to the company. Sometimes it works out, sometimes not. Sure, they could hire Joe Blow off the street at $40,000 to be CEO, but would that be good for the company? Not likely.
That's the point. Companies are profit-driven. Without profit, there would be no economic expansion, no jobs, no wages.
In a capitalist society, yes, this is true.
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Isn't it ironic that the entity you say prevents monopolies actually participates in and funds the largest monopoly in the World, Public Education.
I'm not sure if I would classify U.S. public education as "the largest monopoly in the world," but governments can both create monopolies and prevent them from forming (trust-busting). Without that intervention competition declines as companies can take over a large share of the labor/consumer market and set wages below what they're worth, or prices above what they should be.
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This is the prime example of the shortcomings of governmental regulations limiting free market competition and the substandard products it produces.
Government public education works a lot better in other countries where they put a little more effort into it.
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Why should the labor force have any say into how a company operates, who it hires, how much it pays?
Because we've seen throughout history what happens when they don't.
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If the company doesn't pay enough, then it will lose good workers to a competitor, thus its incentive to pay a fair, but productive wage.
Only in a perfectly competitive labor market. If the company has any degree of monopsony power then it can maximize profits by paying employees less than what their labor is worth. As long as corporations/companies have the ability to pay employees less than what their labor's worth without losing profits, laborers should have the equalizing ability to demand that it be brought up to what it actually is worth (even if it brings the risk of raising wages too high and increasing unemployment... better 8 people working for a decent wage than 10 people being exploited for pennies...)
If the company has any degree of monopsony power then it can maximize profits by paying employees less than what their labor is worth. As long as corporations/companies have the ability to pay employees less than what their labor's worth without losing profits, laborers should have the equalizing ability to demand that it be brought up to what it actually is worth (even if it brings the risk of raising wages too high and increasing unemployment... better 8 people working for a decent wage than 10 people being exploited for pennies...)
It's governmental restraints and bureucracy that limits competition. Are you familiar with the stesses on upstart businesses with the amount of regulations and taxes involved. Once these are lifted, when a market emerges, new businesses could easily be started to compete with those companies who fail to compensate their workers accordingly. Abiding by an employment agreement is not exploitation. If the employer doesn't abide by the agreement the employee has redress through the court system.
Or possibly he just had more money to start out with.
That's possible, but unlikely, considering the owners of the company are more likely interested in hiring someone who will benefit the company to make them money.
"It's governmental restraints and bureucracy that limits competition. Are you familiar with the stesses on upstart businesses with the amount of regulations and taxes involved. Once these are lifted, when a market emerges, new businesses could easily be started to compete with those companies who fail to compensate their workers accordingly. Abiding by an employment agreement is not exploitation. If the employer doesn't abide by the agreement the employee has redress through the court system." --
Without government restraints, the biggest companies can simply buy up the new competitors as they arise and maintain their monopoly/oligopoly power. Paying employees less than their market value because of a lack of options on the employees' part is certainly exploitation.
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