Remarkably, this week even The Economist has decided to face the fact that some of us are getting “shafted by globalised capitalism”.
The lead article discusses the fact that in the recent years of sustained GDP growth, profits have soared while wages have remained stagnant. In the 1980s, American executives already earned 40 times what the workers they commanded were earning. That ratio has now climbed to a 110-fold difference.
The massive corporation I work for has 40,000 employees, and makes a yearly profit running at around US$2,000,000,000. Guessing that the average wage among employees might be somewhere between $30,000 and $40,000, a crude calculation shows that far more money is being creamed off by shareholders and as executive stock-options, than the total that goes to the workers. But aren’t the workers the ones who are actually doing the work that makes the money?
Comments 7
I myself work for the very same corporation that you cite.
I can confirm that I earn extremely well, as does everyone else in the ineffectual management chain above you.
It’s precisely by exploiting workers, like yourself, that I’m enable to draw my well-earned 10-figure salary from the corporation. The work I do is extremely important, such as dressing up requests for lists as equations and receiving training on how to tie up my own shoelaces.
Despite my corpulent wage packet, there would be more than enough to go round, but all additional profits are swallowed up by project costs spiralling out of control. This is purely and simply the fault of the editorial department, who have maliciously and insidiously manipulated my (in)actions on the project via the darkest Voodoo black majick.
I’d like to give you the opportunity to discuss this matter in a professional, adult fashion, but I’m simply too lazy/important to lower myself to communicate with peasants.
Posted 24 Jan 2007 at 1:37 pm ¶Thankyou for your insights Mr Thomas. I consider myself appeased.
Posted 24 Jan 2007 at 2:11 pm ¶So let’s hear some solutions, Mr Poo-poo’er! How can we make a difference?
Posted 25 Jan 2007 at 1:12 am ¶Whoa! Big question! Just off the cuff: how about diverting a greater share of revenue to wages of “regular” workers, and less to top execs and shareholders’ dividends?
… Actually, the economics going here seems to be very complicated. Though I would be interested to know just why the above, quite direct solution is not widely seen as a sensible option. It seems very simple to me on paper - so why doesn’t it happen that way?
Posted 25 Jan 2007 at 5:25 pm ¶Right - I think the economics here are quite complicated. Paying the low end more and the high end less isn’t addressing the underlying cause of the gap, which is about companies needing to pay lots to attract top talent. (And not neededing to pay much for more common talent.)
In an ideal world, what would you have ratio be of highest salary to lowest? How would you calculate what ratio is rightest? (I don’t agree with big ratios myself - I’m curious about how you’d set it if you could.)
Posted 26 Jan 2007 at 1:07 am ¶I think that the shareholders dividends division is probably that if they didn’t get such good dividends, they’d sell their shares and buy shares in which paid better dividends. I would, as the reason you buy shares is to make money from the investment.
I guess the high executive wages… well they decide who gets paid what as they are the executive is probably one thing… and I guess a good business person can make huge profits for a company, so its worth keeping them… as they come up with such clever ideas as ‘we can get away with just paying people this much.. this will mean profits will be higher, so dividends will be good (even better as not much of profit taken by wages) and stocks will be valuable. I wonder, could basically be as simple as that?
Maybe we should all buy shares in this company… seems like it could be the only good thing to come out of it?
Hmm… I am wondering about the whole shafted by global capitalism thing. I do think it’s in a lot of ways true… and lots of people definitely get get shafted by it, big time… but not us maybe. i was thinking this as I went for a weekend away… I was eating something in a cafe, waiting for a train… and I think that in a lot of ways we just shaft ourselves. Advertising and the media are so good now at getting you to spemd your money on things… we just don’t say no to ourselves, lets face it, we go out to eat all the time, buy music or go to clubs a lot, travel a lot, live in the centres of towns rather than the burbs or less nice areas… and so we live, then say that we are getting shafted by this life?? I dunno… maybe would be better not to get sucked into things and save more money, get yourself more freedom that way…
Posted 03 Feb 2007 at 10:55 pm ¶Hmmm… the economist… wonder if could have been more appropriate to put put a picture of one of the 2oo thousand odd american worker employed in a sweat shop in california, as an image of being ’shafted’ by this system, rather than this dude?
On those lines, I wonder how shafted the person working in the sweat shop that made the jeans (and probably everythign else) I’m in now thinks I am??
Posted 03 Feb 2007 at 11:03 pm ¶Post a Comment