2021 - Is inflation finally back in the conversation?

[bernorange 8362]

2 hours ago, 52-80 said:

* ... should their relative pay remain constant?

* secondly, the "bubble" implies a downside risk, which the CEO's equity is then exposed to (it's a "risk asset"). 

* thirdly, such equity appreciation lifts non-CEO-exclusive savings...like 401ks.  don't you have one?  are you complaining about that?

* finally, the Fed policy is determined by board members elected by the country's president.  what responsibility does the CEO share in that?

you surely own equity.  you have a vote.  you want CEO pay to be fair (its literally coming out of your equity).  what is your alternate proposal to make it fairer?

1 - Pay (salary) isn't so much the issue as bonuses/equity if you understand that the Fed has been purposely driving an equity asset bubble

2/3 - There is zero downside risk for the handful of companies that the PPT/Fed proxies are pumping to keep the indexes up and the common folk watching their 401ks happy.  I'm pointing out that CEO compensation is not, as you posited, rationally tied to their performance.  They are beneficiaries of our insane monetary system.  When the Fed creates money from thin air and that new money flows into their pockets disproportionately to everyone else, that's a problem with the monetary system and something I may have griped about once or twice here and there.

4 - I did not posit that CEOs have responsibility/blame for the equity bubble.  They do have some control over how their company's equity compensation is managed don't they?

4* - My alternate proposal is to impose constraints on the Fed to enforce a more rational monetary policy (which in turn would constrain Congress on fiscal policy):  click if you dare

 

[bernorange 8362]

I forgot to mention, the chart posted recently about CEO compensation that started this tangent - it's no coincidence that it went parabolic after 1971.    It would be interesting to see that chart  overlayed with charts of the Fed's balance sheet and/or the money supply.

[52-80 19205]

Investor who puts $10k into ATVI at the start of Bobby Koticks tenure now has $85k. One who put it into Nintendo now has $15k. 
 

Which one should complain about his compensation, and on what grounds?

[Trey3216 15350]

2 hours ago, Cheeseweasel said:

Sure helps your economy when the West rebuilds all of your factories and infrastructure after you go full regarded

And when you get to use the US treasury debt you acquired in trade to fund your negative interest government bonds.  

[Cheeseweasel 26438]

5 minutes ago, Trey3216 said:

And when you get to use the US treasury debt you acquired in trade to fund your negative interest government bonds.  

We should get China to drop a Nuke on Baltimore to solve our economic problems. (And our Baltimore problems)

[Captainant 27690]

36 minutes ago, 52-80 said:

Investor who puts $10k into ATVI at the start of Bobby Koticks tenure now has $85k. One who put it into Nintendo now has $15k. 
 

Which one should complain about his compensation, and on what grounds?

You're quite nicely demonstrating the disconnect here I think: if all that you care about in the world is building a bigger, fatter pile of lucre - then kotik is a great CEO! But if you give a single shit about the human cost of what's driving those profits - including actively concealing and covering up RAPES that otherwise would have been very expensive and harm that stock valuation - then it starts to seem more appropriate to complain about his compensation relative to the people who are actually producing the products that activision sells

[Captainant 27690]

6 minutes ago, Cheeseweasel said:

We should get China to drop a Nuke on Baltimore to solve our economic problems. (And our Baltimore problems)

ahhh, you want to give em the 'ol Tulsa treatment huh? It's a classic!

[Fudge Nuggets 19209]

Just now, Captainant said:

You're quite nicely demonstrating the disconnect here I think: if all that you care about in the world is building a bigger, fatter pile of lucre - then kotik is a great CEO! But if you give a single shit about the human cost of what's driving those profits - including actively concealing and covering up RAPES that otherwise would have been very expensive and harm that stock valuation - then it starts to seem more appropriate to complain about his compensation relative to the people who are actually producing the products that activision sells

Has he given you any indication that he gives one flying fuck about anything other than corporate profits and general "Captain of Industry" ass-licking?

[Cheeseweasel 26438]

10 minutes ago, Captainant said:

ahhh, you want to give em the 'ol Tulsa treatment huh? It's a classic!

[52-80 19205]

1 hour ago, Fudge Nuggets said:

Has he given you any indication that he gives one flying fuck about anything other than corporate profits and general "Captain of Industry" ass-licking?

Were you coerced into capitalizing atvi or tricked into buying their products? 
 

Show us on the doll where these “captains of industry” touched you. 

[Fudge Nuggets 19209]

So, no denial that you are nothing more than a corporate ass-licking simp.

Got it.  Thanks for the confirmation.

[52-80 19205]

3 hours ago, bernorange said:

1 - Pay (salary) isn't so much the issue as bonuses/equity if you understand that the Fed has been purposely driving an equity asset bubble

2/3 - There is zero downside risk for the handful of companies that the PPT/Fed proxies are pumping to keep the indexes up and the common folk watching their 401ks happy.  I'm pointing out that CEO compensation is not, as you posited, rationally tied to their performance.  They are beneficiaries of our insane monetary system.  When the Fed creates money from thin air and that new money flows into their pockets disproportionately to everyone else, that's a problem with the monetary system and something I may have griped about once or twice here and there.

4 - I did not posit that CEOs have responsibility/blame for the equity bubble.  They do have some control over how their company's equity compensation is managed don't they?

4* - My alternate proposal is to impose constraints on the Fed to enforce a more rational monetary policy (which in turn would constrain Congress on fiscal policy):  click if you dare

 

Your main issue isnt with ceo pay per se, its with fed reserve policies, and 1971 move away from the more-rigid gold standard …which *manifests* itself in the apparent pay ratio through ceo pay structure.

Thats fine, but its a separate discussion. Also that train left the station decades ago, and its not going to return. Economic activity and potential shouldnt be ~constrained by finite supply of some tangible good. 
 

Also, uhm, we kind of dont want to design such that Australia and Russia become the richest countries on earth?

[52-80 19205]

27 minutes ago, Fudge Nuggets said:

So, no denial that you are nothing more than a corporate ass-licking simp.

Got it.  Thanks for the confirmation.

Whats wrong with your own life that youre aggrieved by how much other people earn?

[Fudge Nuggets 19209]

Nothing, it's chodes like you that think they can do no wrong that makes no sense.

[52-80 19205]

4 hours ago, Bozo_Casanova said:

First of all, your never responded to the gravamen of Bern's question, which is whether the compensation is in fact a function of performance, BUT:

* Productivity has increased across the whole economy, largely as a result of automating routine work, which enhances the value of any individual worker. Thus, why would any individual executive in any particular company benefit from the value created to a greater extent than the workforce as a whole? 
** So? (This is also a trick question)
*** Are you asserting that senior executive compensation is in fact broadly correlated to stock price performance? (Not a trick)
**** Are you saying that normalizing executive compensation would be amount to punishing executives for Fed policy?

As a stockholder, I see equity compensation as something that comes at my expense, much like cash compensation. And that's fine as far as it goes, and beneficial to the extent that it aligns to my interest but it can become problematic if it is excessive, like the compensation of any other employee. 

1. Public executive pay is in fact reflective of performance, as the largest component of pay is variable, and conditioned on clearly defined performance metrics

2. Increased productivity of worker is accretive to the increased responsibility/purview of their supervisors. An individual with productivity potential exceeding their current pay seeks pay elsewhere; rise to/beyond level of their supervisor; venture off on their own. Doesnt this happen in tech everyday. 

3. Im saying *because* the largest component of their pay is in the form of equity, the worth of their pay is *ipso facto* a function of equity valuation

4. I didnt imply anything regarding normalizing pay or not. I said principally comparison between 1960s vs 2020s needs to be normalized to company size/scope for valid comparison. And that ceo are not responsible for fed action. And finally, those criticizing the pay structure are free the propose alternative pay structure. 

Which of course they never do.

I know you exercise your shareholders right, and i do too. The rest…peanut gallery. 

[52-80 19205]

28 minutes ago, Fudge Nuggets said:

Nothing, it's chodes like you that think they can do no wrong that makes no sense.

Siri, play a piano concerto for me hurting this guys feelings. 

[washparkhorn 9939]

4 hours ago, bernorange said:

I forgot to mention, the chart posted recently about CEO compensation that started this tangent - it's no coincidence that it went parabolic after 1971.    It would be interesting to see that chart  overlayed with charts of the Fed's balance sheet and/or the money supply.

The Friedman Doctrine (1970, the sole social responsibility of business is to increase profits) provided the excuse; executives gaming the system was the result. 

[Fudge Nuggets 19209]

29 minutes ago, 52-80 said:

Siri, play a piano concerto for me hurting this guys feelings. 

Yawn.

No hurt feelings at all, just amusement that someone can constantly ass-lick at the rate you do and have no shame about it.

[jimmyjazz 46000]

5 hours ago, Bozo_Casanova said:

As a stockholder, I see equity compensation as something that comes at my expense, much like cash compensation. And that's fine as far as it goes, and beneficial to the extent that it aligns to my interest but it can become problematic if it is excessive, like the compensation of any other employee. 

Pull up a chair and let me tell you about the public company I worked for that was busting ass to become profitable.  One year we were there, except executive bonuses pushed us negative.  At that point I knew we were fucked, and we were.

[Bozo_Casanova 26510]

45 minutes ago, 52-80 said:

1. Public executive pay is in fact reflective of performance, as the largest component of pay is variable, and conditioned on clearly defined performance metrics

2. Increased productivity of worker is accretive to the increased responsibility/purview of their supervisors. An individual with productivity potential exceeding their current pay seeks pay elsewhere; rise to/beyond level of their supervisor; venture off on their own. Doesnt this happen in tech everyday. 

3. Im saying *because* the largest component of their pay is in the form of equity, the worth of their pay is *ipso facto* a function of equity valuation

4. I didnt imply anything regarding normalizing pay or not. I said principally comparison between 1960s vs 2020s needs to be normalized to company size/scope for valid comparison. And that ceo are not responsible for fed action. And finally, those criticizing the pay structure are free the propose alternative pay structure. 

Which of course they never do.

I know you exercise your shareholders right, and i do too. The rest…peanut gallery. 

1) Eh, not really. 
 

Quote

We found that, while the best-performing CEOs (the top fifth of our sample, based on annual average total shareholder return) earned 70% more in realized pay than the worst-performing CEOs, they earned only 4% more than CEOs who oversaw average corporate stock performance, relative to our sample and on an annual average basis. And, contrary to intuition, CEOs who oversaw the strongest returns in our sample received the lowest awarded pay.

2) Eh, after 25 years in tech I don't think that's true. It's typically employees who are entrepreneurial who venture out, not the ones who deliver the most value or highest performing. And besides - HR departments benchmark comp extensively. While changing companies is often the only way to get a meaningful bump in income, even as a result of promotion, it's nothing like the accelerated wealth that comes from the top couple of tiers, well above middle management, which is where strategic and tactical choices are framed for decision. In practice income seems mostly tied to span of control. 
 

3) Again, not really, see above. 

4) No offense but I can't parse this. Rephrase?

[52-80 19205]

25 minutes ago, Bozo_Casanova said:

1) Eh, not really. 
 

2) Eh, after 25 years in tech I don't think that's true. It's typically employees who are entrepreneurial who venture out, not the ones who deliver the most value or highest performing. And besides - HR departments benchmark comp extensively. While changing companies is often the only way to get a meaningful bump in income, even as a result of promotion, it's nothing like the accelerated wealth that comes from the top couple of tiers, well above middle management, which is where strategic and tactical choices are framed for decision. In practice income seems mostly tied to span of control. 
 

3) Again, not really, see above. 

4) No offense but I can't parse this. Rephrase?

1. paper methods shows a broad positive correlation between total stock return and ceo pay.  it also didnt prove/disprove our claim of pay vs "performance", as performance metrics arent just == stock price. they're different for each company -- some can target stock price, but some can be sales, market share, key operating milestone, etc, which are not directly translatable to stock performance. 

if the shareholder class wants to grant equity based on TSR (like apple does with its vesting), go for it.

2. wealth accrues to those with span of control....isnt that just repeating my point about the nature of a 2020 corporation vs 1960 corporation in size and scope?

4. modern ceo earns more because modern ceo has larger span of control.  the 5th largest company in 1960, US Steel, generated 37B of revenue in 2023's dollar.  that is equivalent to Nucor steel, which now represents the 100th largest US company.  how about we compare the CEO-Worker ratio of those companies instead of vs Google or United Health or Costco

[NotActuallyALonghorn 4976]

I think a key factor we are missing in this discussion is pay for workers. Yes, it is alluded to, but the fact that wages have stagnated is really the elephant in the room. I could care less if CEO's were making record amounts of money if workers were also doing the same. The ever expanding pie of capitalism works decently enough I everybody gets an ever expanding piece of it. But when CEO's are getting the ever expanding share and the share that the workers get stays the same while inflation bumps up key things like the cost of housing up 40% in one year and when food is a major driver of inflation (affects those with more kids disproportionately), then we have a serious problem. We have fewer workers doing more work because workers are generally more skilled, but those extra skills aren't translating into more income despite the extra education they have to acquire along with the associated debts to get those jobs.

[Judge Roybeanbag 11819]

17 hours ago, 52-80 said:

Whats wrong with your own life that youre aggrieved by how much other people don’t really earn pocket for filling a space.

FIFY.  

[Cheeseweasel 26438]

7 hours ago, NotActuallyALonghorn said:

I think a key factor we are missing in this discussion is pay for workers.

Honest question--how do we change this? What moves the dial? 

[Captainant 27690]

6 minutes ago, Cheeseweasel said:

Honest question--how do we change this? What moves the dial? 

[Cheeseweasel 26438]

[52-80 19205]

7 hours ago, NotActuallyALonghorn said:

I think a key factor we are missing in this discussion is pay for workers. Yes, it is alluded to, but the fact that wages have stagnated is really the elephant in the room. I could care less if CEO's were making record amounts of money if workers were also doing the same. The ever expanding pie of capitalism works decently enough I everybody gets an ever expanding piece of it...

But when CEO's are getting the ever expanding share and the share that the workers get stays the same while inflation bumps up key things like the cost of housing up 40% in one year and when food is a major driver of inflation (affects those with more kids disproportionately), then we have a serious problem. We have fewer workers doing more work because workers are generally more skilled, but those extra skills aren't translating into more income despite the extra education they have to acquire along with the associated debts to get those jobs.

You are correct on the first part.  What the workers earn is of societal interest and importance.

What is not so correct is the 2nd part, especially illustrated by the CEO vs worker chart.  What someone else (the CEO) earns is inconsequential, unless they are eating into YOUR pie.  If the rate of growth of the pie exceeds the loss of share, you still have more pie in absolute terms.

Actual numbers here: the average income per capita exceeds the change in costs.  Note that index referenced to 1971, mentioned upthread.

you can make the case the per capita is an average which skews away from the typical person. 

so here is the MEDIAN income, already adjusted for cost of living

This picture is a composite, which is a bit messier to do on FRED, but you can divide income by expenditure on food (or housing, or whatever)

 

[Snake Diggity 4626]

6 minutes ago, 52-80 said:

You are correct on the first part.  What the workers earn is of societal interest and importance.

What is not so correct is the 2nd part, especially illustrated by the CEO vs worker chart.  What someone else (the CEO) earns is inconsequential, unless they are eating into YOUR pie.  If the rate of growth of the pie exceeds the loss of share, you still have more pie in absolute terms.

Actual numbers here: the average income per capita exceeds the change in costs.  Note that index referenced to 1971, mentioned upthread.

you can make the case the per capita is an average which skews away from the typical person. 

so here is the MEDIAN income, already adjusted for cost of living

This picture is a composite, which is a bit messier to do on FRED, but you can divide income by expenditure on food (or housing, or whatever)

 

Dude are you serious?  Your argument against the idea that executive/ownership compensation is out of control is that because worker standards have increased by any measure, there’s no issue?  Damn.

[52-80 19205]

If I'm a janitorial service engineer, my focus is on how well i can feed my family.  Not how well my neighbor's boss' boss can feed his/her family.  And I'd rather be one in 2020, than in 1960.

[Neonmoon 38130]

Russia seems...suspect

[52-80 19205]

2 minutes ago, Snake Diggity said:

Dude are you serious?  Your argument against the idea that executive/ownership compensation is out of control is that because worker standards have increased by any measure, there’s no issue?  Damn.

Why do you care how much Kevin Durant, Angelina Jolie, or Jeff Bezos gets paid?  You can express your opinion by not buying his jersey, her movie, or from his store.

I think a wealth tax should be implemented to redistribute excesses of upper n'th earning, but the precise earnings each person get is a function of the market. 

[jimmyjazz 46000]

So, 3%?

[bolverk 29695]

7 minutes ago, jimmyjazz said:

So, 3%?

June Inflation Report
Inflation Continues to Cool: Live Updates
Consumer prices rose 3 percent in the year through June, another decline in the pace of inflation. The deceleration in “core” inflation, a measure closely watched by the Federal Reserve, was also notable.

Inflation cools sharply in June, good news for consumers and the Fed.
Inflation data released on Wednesday showed a pronounced cooling and offered some of the most hopeful news since the Federal Reserve began trying to tame rapid price increases 16 months ago.

The Consumer Price Index climbed 3 percent in the year through June, less than the 4 percent increase in the year through May and just a third of its roughly 9 percent peak last summer.

That overall metric catches big declines in gas prices and a few other products that could prove ephemeral, which is why policymakers closely watch a different measure: the change in prices after stripping out food and fuel costs. That measure, known as the core index, offered news that was even better than what economists had expected, sending stocks higher as investors bet that the news would allow the Fed to raise interest rates by less than they otherwise might have.

The core index climbed 4.8 percent compared with the previous year, down from 5.3 percent in the year through May. Economists had forecast a 5 percent increase. And on a monthly basis, the core index climbed at the slowest pace since August 2021.

“This is very promising news,” said Laura Rosner-Warburton, senior economist and founding partner at MacroPolicy Perspectives. “The pieces of the puzzle are starting to come together. But it’s just one report, and the Fed has been burned by inflation before.”

Slower inflation is unquestionably good news, because it allows consumer paychecks to stretch further and inflicts less pain at the gas pump and in the grocery aisle. But Federal Reserve officials are still trying to assess whether the cool down is likely to be quick and complete. They do not want to allow price increases to linger at slightly elevated levels for too long, because if they do, consumers and businesses could adjust their behavior in ways that makes more rapid inflation a permanent feature of the economy.

Given that, they may be cautious in interpreting the news. Officials have signaled in recent weeks that they are likely to raise interest rates at their July 25-26 meeting.

Ms. Rosner-Warburton said she thought a July move was still likely, but that the fresh inflation data could lay the groundwork for “a more extended pause” after. She added that a cooling in car prices and slower rent increases should keep the moderation in inflation underway, and she forecast that the Fed would not raise interest rates again this year following the July change.

The June inflation slowdown came as a few key products and services posted steep price declines. Airfares fell 8.1 percent compared with the previous month, and used cars and trucks were down 0.5 percent. New vehicle prices were flat compared with May.

Not all of those changes will necessarily last: Airline tickets, for instance, are not expected to continue to decline as sharply as they did in this report. But for the Fed, there were other encouraging signs that the cool-down is broad enough to prove sustainable.

For one thing, the cost of housing as measured by the Consumer Price Index — which relies on rent prices — is coming down sharply. That is expected to continue in coming months. An index tracking the rent of primary residences slowed to a 0.46 percent change in June, the weakest increase since March 2022.

Car prices are also cooling. After years in which semiconductor shortages and other parts problems limited supply, making it hard to meet booming demand, discounting is making a comeback on car dealer lots. Inventories are rebounding, and consumers have a less voracious appetite for new cars in particular.

“It’s different from the past couple of years, and even different from the fall,” said Beth Weaver, who runs a Buick GMC car dealership in Erie, Pa. “Interest rates have certainly weighed on demand.”

And more broadly, price increases for a basket of services excluding energy, food and housing costs — a metric that the Fed watches very closely — continued to slow in June.

But in spite of all of the recent progress, inflation remains above the rate of increase that was normal before the 2020 pandemic. And the economy still retains momentum, with strong job and wage growth, which could give companies the wherewithal to keep raising prices. That is why Fed officials are hesitant to say they have won the battle against inflation.

“It would be a mistake” to “declare victory” too early, Loretta Mester, the president of the Federal Reserve Bank of Cleveland, said on a call with reporters this week.

The Fed officially targets 2 percent inflation on average over time, though it defines that goal using a separate inflation measure, the Personal Consumption Expenditures index. That gauge is also slowing notably, and its June reading is scheduled for release on July 28.

Even if central bankers are likely to interpret the slowdown cautiously — cognizant that price increases have slowed and then accelerated again before — many commentators welcomed the fresh data point as the latest sign that the economy may be able to slow gently.

Officials at the Fed have been trying to engineer a “soft landing” in which inflation slows gradually and without requiring a big jump in the unemployment rate. Interest rates increases work partly by slowing the job market and cooling wage increases, so the Fed’s fight against inflation and the strength of the labor market are closely tied.

“The sustained decline in inflation is encouraging news for the U.S. labor market outlook,” Julia Pollak, chief economist at ZipRecruiter, wrote in response to the fresh release. “It increases the likelihood that the Fed will be able to pause rate hikes after one final July increase, and gradually lower rates through 2024.”

[Cheeseweasel 26438]

3 minutes ago, bolverk said:

Consumer prices rose 3 percent in the year through June, another decline in the pace of inflation.

God bless the writer of this article who understands rates vs. actual numbers.

[52-80 19205]

30 minutes ago, Cheeseweasel said:

God bless the writer of this article who understands rates vs. actual numbers.

one day we hope surly commentators reach this level of competence

[Bozo_Casanova 26510]

1 hour ago, 52-80 said:

If I'm a janitorial service engineer, my focus is on how well i can feed my family.  Not how well my neighbor's boss' boss can feed his/her family.  And I'd rather be one in 2020, than in 1960.

What a weird perspective.
First, I can assure you that the vast majority of human beings are quite interested in the financial condition of their neighbors. 

Second, this is a highly "sorted" society, meaning that Americans are increasingly likely to live, work, recreate and move with people who look, think, vote, worship, and behave similar to ourselves, for better or worse*.  His neighbor's boss's boss is likely to be just like his boss's boss, and people think a lot and talk constantly  about what their senior management makes, and there are lots of examples of how it impacts work and productivity. There was a reason why people who busted their asses for Lew Platt got on a glide path under Carly Fiorina. Lew Platt only made 5-10X what they did, ate in the cafeteria and flew coach. Resentment is a real thing and hurst productivity, especially with a high-skill workforce. 

Third, the working class was far better off in terms of how close they could get relative to the median standard of living in 1960 than they are in 2024.  In 1960 my grandfather was a non-union carpenter subcontractor a notch or two up from a janitor but not far. One one income he could buy a tract home home 3 miles from downtown Dallas, raise two kids, afford two cars, save for college, go on road trip vacations, buy fixer uppers to rent out to janitors, etc et al. 
Show me a growing city in Texas where that's possible for anybody below management in a private company. 

*much worse, I think. The traditional big-city middle class neighborhood with all kinds of people from all walks of life has almost disappeared, and with it the role of the neighborhood public schools as community "glue." Pretty terrible. 

Edited July 12, 2023 by Bozo_Casanova

[washparkhorn 9939]

Team Transitory for the win!*
 

 

* Everything is temporary if you give it enough time. ~Cormac McCarthy’s ghost, probably

[bernorange 8362]

For those interested:

https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/

Fiat flows to the top.

[Cheeseweasel 26438]

9 minutes ago, washparkhorn said:

Team Transitory for the win!*
 

 

* Everything is temporary if you give it enough time. ~Cormac McCarthy’s ghost, probably

Supercore Inflation sounds scary as shit.

[Bozo_Casanova 26510]

30 minutes ago, Cheeseweasel said:

Supercore Inflation

upcoming 100 gecs single

[Gatorubet 30274]

These rates will result in a Social Security COLA raise that will piss off the olds.   Their expenses increased for a large part of the year, but the 2024 COLA will be based just on this last good info.  I think. 

 

[Bozo_Casanova 26510]

30 minutes ago, Gatorubet said:

These rates will result in a Social Security COLA raise that will piss off the olds.   Their expenses increased for a large part of the year, but the 2024 COLA will be based just on this last good info.  I think. 

 

Shoulda voted for Mondale

[pearlandhorn 3274]

On 7/11/2023 at 7:40 AM, Captainant said:

This isn't backed by reality. Workers are significantly more productive than they were 50 years ago. That line worker is doing a hell of a lot more in 2020 then they were in 1960, and they're probably way better educated with student loan debt to boot

Probably don't need a degree to be a line worker.

[Cheeseweasel 26438]

2 minutes ago, pearlandhorn said:

Probably don't need a degree to be a line worker.

Pass a drug test. Show up to work on time. Don't fight with the other line workers.

[52-80 19205]

4 hours ago, Bozo_Casanova said:

What a weird perspective.
First, I can assure you that the vast majority of human beings are quite interested in the financial condition of their neighbors. 

Second, this is a highly "sorted" society, meaning that Americans are increasingly likely to live, work, recreate and move with people who look, think, vote, worship, and behave similar to ourselves, for better or worse*.  His neighbor's boss's boss is likely to be just like his boss's boss, and people think a lot and talk constantly  about what their senior management makes, and there are lots of examples of how it impacts work and productivity. There was a reason why people who busted their asses for Lew Platt got on a glide path under Carly Fiorina. Lew Platt only made 5-10X what they did, ate in the cafeteria and flew coach. Resentment is a real thing and hurst productivity, especially with a high-skill workforce. 

Third, the working class was far better off in terms of how close they could get relative to the median standard of living in 1960 than they are in 2024.  In 1960 my grandfather was a non-union carpenter subcontractor a notch or two up from a janitor but not far. One one income he could buy a tract home home 3 miles from downtown Dallas, raise two kids, afford two cars, save for college, go on road trip vacations, buy fixer uppers to rent out to janitors, etc et al. 
Show me a growing city in Texas where that's possible for anybody below management in a private company.

Wrong interpretation: i didn't say people aren't interested in their neighbors' financial conditions.  I said they shouldn't be.  Specifically in the context of the numerical outliers - the pay of the people who represent 0.003% of SP500 employees is not what determines my wage and livelihood or not.  It's a reductive, populist distraction.

SP500 employee count 35,000; Pay ratio 300:1; Employee earns 60k per year, CEO earns 18M.  If pay ratio goes back down to 50:1... each employee now earns... $60,400.  That's a 0.7% raise for anyone counting.  Can we now move beyond catchy headlines numbers designed to rile up cable TV audiences?

***

The relative measurements keep getting brought up and its flawed.  Example: your 1960 working-class grandpa provides sufficiently for his family.  But now everyone above him raises their standard of life tremendously .  The median has just gone up.  (1) did your grandpa just get closer, or farther away from the median?  (2) does everyone else living better suddenly make his life insufficient?

***

So from 1960 to 2020 what has happened to the real, median income in America?  it's gone UP- posted above.  What's happened to real disposable income per capita?  UP (FRED series A229RX0)

What's happened to home ownership rate? UP (FRED series RHORUSQ156N)

What's happened to poverty rate in America? DOWN (US Census 2021, using both traditional poverty measure and modern SPM)

Those are authoritative government sources, so people are welcomed to dispute them. 

***

Fact is in a gigantic country with natural distribution of talent and achievement, there will never be equal outcomes. The most important thing is the country provides opportunity for capable people to move up -- which it does in spades.  The second most important thing is a safety net against the bottom from falling out -- which it also does (I would know, my family were former recipients of all the programs).  In between there's a slot for everybody. 

[Bozo_Casanova 26510]

52-80, you're making ideological points to somebody who really hates and distrusts ideology. 
 

27 minutes ago, 52-80 said:

Wrong interpretation: i didn't say people aren't interested in their neighbors' financial conditions.  I said they shouldn't be. 

We live with what is, not what should be (which is debatable)
 

27 minutes ago, 52-80 said:

SP500 employee count 35,000; Pay ratio 300:1; Employee earns 60k per year, CEO earns 18M.  If pay ratio goes back down to 50:1... each employee now earns... $60,400.  That's a 0.7% raise for anyone counting.  Can we now move beyond catchy headlines numbers designed to rile up cable TV audiences?

 

Honestly this seems like a strawman. The important thing isn't that workers should necessarily make more. Let's imagine that CEO only made 10MM.  Is the CEO 8mm less productive? Or rather, what's the value of a 10mm CEO, plus the return on 8mm additional CapEx? 
You don't need to answer this - it's a board/governance question at any given company, enabled by the tax code.  What I'm pointing out is the possibility that it might not be a good idea to give out these enormous packages of what amounts to founders pay to senior management, particularly hired guns who may or may not deliver value. See also, Carly Fiorina. 

27 minutes ago, 52-80 said:

The relative measurements keep getting brought up and its flawed.  Example: your 1960 working-class grandpa provides sufficiently for his family.  But now everyone above him raises their standard of life tremendously .  The median has just gone up.  (1) did your grandpa just get closer, or farther away from the median?  (2) does everyone else living better suddenly make his life insufficient?

Not necessarily.  You say the relative measurement doesn't matter, and that it's flawed while also invoking it to prove a point. Either way, the median is a less abundant point  than it was 65 years ago relative to the perceived standard of living AND those below the median are farther from it than they wore 60 years ago AND there are fewer people clustered around the median. And given that people care a lot about that (see above), the relative measurement seems important. 
 

 

27 minutes ago, 52-80 said:

Fact is in a gigantic country with natural distribution of talent and achievement, there will never be equal outcomes. The most important thing is the country provides opportunity for capable people to move up -- which it does in spades.

Eh, not really It should though. I wish it did. 
"

Summary

In recent decades, new research on intergenerational economic mobility has established an important set of new facts that should inform our thinking about opportunity and mobility in America. The U.S. has relatively low rates of intergenerational income mobility, especially when compared with other advanced economies, and mobility appears to have declined since 1980. There are also important differences in intergenerational mobility by race or ethnicity and location. In particular, Black families are disadvantaged relative to White families when it comes to both upward mobility from the bottom and downward mobility from the top.

27 minutes ago, 52-80 said:

The second most important thing is a safety net against the bottom from falling out -- which it also does (I would know, my family were former recipients of all the programs). 

I would argue that the safety net often provides a floor for subsistence while also obstructing upward mobility, however well intended, but it's beyond the scope of this thread. 

Edited July 12, 2023 by Bozo_Casanova

[52-80 19205]

47 minutes ago, Bozo_Casanova said:

(1) 52-80, you're making ideological points to somebody who really hates and distrusts ideology.

(2) Honestly this seems like a strawman. The important thing isn't that workers should necessarily make more. Let's imagine that CEO only made 10MM.  Is the CEO 8mm less productive? Or rather, what's the value of a 10mm CEO, plus the return on 8mm additional CapEx? 
You don't need to answer this - it's a board/governance question at any given company, enabled by the tax code. 

(3) Not necessarily.  You say the relative measurement doesn't matter, and that it's flawed while also invoking it to prove a point. Either way, the median is a less abundant point  than it was 65 years ago relative to the perceived standard of living AND those below the median are farther from it than they wore 60 years ago AND there are fewer people clustered around the median. And given that people care a lot about that (see above), the relative measurement seems important. 
 

(4)

In recent decades, new research on intergenerational economic mobility has established an important set of new facts that should inform our thinking about opportunity and mobility in America. The U.S. has relatively low rates of intergenerational income mobility, especially when compared with other advanced economies, and mobility appears to have declined since 1980. There are also important differences in intergenerational mobility by race or ethnicity and location. In particular, Black families are disadvantaged relative to White families when it comes to both upward mobility from the bottom and downward mobility from the top.

(1) For this reason I enjoy chatting with you.  But I don't know what ideology you suggest im proselytizing (or harbor), because my thing is mostly that the angry doomer class-warfare anticapitalist takes here are disappointingly low grade hogwash for what is supposedly a TX alum crowd.

(2) Is it a strawman when it's a direct refutation of the chart that sparked this conversation off but putting actual number behind the ratios?

(3) Any widening of relative measure is a consequence of the country growing its economic opportunity and growing its people (2x since 1960) with different potentials who capture different shares of that marginal opportunity.  That's neither unnatural or "unfair" (not your claim, but implied by other people).  1960s NBA had milkmen probably making very similar money and todays NBA has Lebron James $ vs Andre Drummond on league-minimum, but that is not an indictment of Lebron nor injustice on Andre.

The bottom line is that there are fewer people in poverty, is that not true?

(4) This is a great example of the flaws in the methodology, when comparing US vs other advanced economies (EU).  The underlying method for these studies is % mobility within income deciles (say, 3rd to 7th or whatever), and the problem is the US has more stratified incomes than other countries.  Top EU lawyers and doctors and senior managers earn not much more in relative terms vs their in-country median; and very little in absolute terms vs the US.

What this means is, in Europe, if your father was a janitor, and you are standard mechanical engineer, you are now very close to the earnings of a doctor.  You have met the %mobility criteria.  In America, as a mechanical engineer, you are still far below the doctor/faang swe/whatever.  You have not met the %mobility criteria, so it appears you are immobile.

And yet your situation have just improved the most in America, as measured by absolute terms within country ($eng - $janitor).  And it's also the best cross country ($eng - €eng).

 

That fact often gets missed in this comparison

 

Edited July 12, 2023 by 52-80

[Captainant 27690]

1 hour ago, 52-80 said:

But I don't know what ideology you suggest im proselytizing (or harbor), because my thing is mostly that the angry doomer class-warfare anticapitalist takes here are disappointingly low grade hogwash for what is supposedly a TX alum crowd.

You're a follower of trickle down economics, and deride anyone who disagrees with you as a leftist. Doesn't matter how much data, empirical evidence, and refutation of old hypothesis we bring - you'll simply internalize it as "class warfare anticapitalist takes"

Gimme a fuckin break dude. 

[troph 24893]

The newly posted annual inflation number has been predictable for a while. It’s a rolling twelve months and the worst months are dropping off.  Some of us have been saying this for months. The actual month over month increases are the more important numbers. 

[Cheeseweasel 26438]

12 hours ago, troph said:

The newly posted annual inflation number has been predictable for a while. It’s a rolling twelve months and the worst months are dropping off.  Some of us have been saying this for months. The actual month over month increases are the more important numbers. 

Truth. Any comparative economic data measured against The Covid Years is going to be weird and not tell a true story.