Monday, March 17, 2008

Salaries

I don't usually expect philosophy from the San Francisco Chronicle, but on today's sfgate.com I saw a column with the arresting title: No Offense, but You Don't Deserve Your Salary.

Kind of catches your eye, doesn't it?

I strongly recommend the piece. I've actually considered writing something on this subject, spurred by disgust at the absurd salaries paid to CEOs and baseball players, but the columnist, Chris Colin, has really said it all much better than I could.

The reader comments are fairly interesting, too.

12 comments:

  1. I don't really agree with the general premise of the article, since it seems to totally ignore basic economics - which really isn't about 'deserve' so much as what something is worth to the person doing the paying.

    But I do agree with you that CEOs are massively overpaid. And while I'm no sports fan and would be just as happy if all professional sports were eliminated, I don't feel that professional athletes are overpaid, simply because, well, they ARE the widgets being sold. People pay tickets to go to the games (or for ads on the game on TV) - and so that money goes, in part, to the players, without whom, there would be no game and no money.

    Nobody pays money to buy crackers because they like the cracker company's CEO or want to see him or her perform. The CEO, in actual fact, doesn't really produce anything. And their salary is, in essence, a leech of money off of the parts of the company that DO produce revenue. Sure, management is needed, but one could find a competent manager for far less money than the leech CEOs pay themselves.

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  2. There are good forms of capitalism, and bad forms.

    Is Microsoft good capitalism, and is Bill Gates a deserving fellow?

    Does Alex Rodriguez contribute to the world's good to the tune of, say, $250,000 per game played?

    I think there's gotten to be a disconnect between performance and rewards. It was always there, of course. Accidental windfalls, speculative bubbles, etc.

    But the problem with our economy of corporate culture is that managers and CEO's and their colleagues all believe that they deserve to be made rich, no matter how well their company performs. In fact, if the company folds, they usually get to raid the treasury and walk away with several lifetimes' worth of booty, even as their companies collapsed in bankruptcy. How can this be "fair" or "just" compensation?

    So the arguments about competition and winners and losers kind of falls apart. And what about cheaters? Every day on Wall Street, insiders set up huge deals behind the curtains, surreptitiously transferring great fortunes to numbered accounts in Switzerland or the Caribbean. Cheating comprises so much of our present day high stakes business world, that it hardly matters who's ethical or not: Winners walk.

    I don't think we have the brains or the will to make democracy work the way it should, or to keep business and industry in line. Every so often, almost by accident, we nab some audacious nerd who manipulated investors and the public out of millions (or billions). But most of them get away, and live lives of appalling excess.

    Last weekend there was one of these real estate programs on television. A couple with three children were showing off a house they'd renovated on the Malibu shore. It wasn't at all obvious how they'd become rich, but neither of them seemed particularly intelligent, or sensitive, or shrewd. The house was as big as a hotel--perhaps 10,000 square feet, and had a dozen superfluous rooms, including guest "suites" and exercise rooms, walk-in closets as big as most living rooms, etc. Watching it, we wondered what life people like this imagine they are having: One without intimacy or warmth, no focused energy, no utility or purpose. In short, one of pointless, mindless consumption of materiality.

    One mildly fun game is imagining what you'd do, how you'd live if money were literally no object. How many and what kinds of houses, and where, how many cars (and what kinds), how many nights at the opera, how many toys and gadgets and vacations and hobbies can one person pursue?

    There comes a point where you must hire someone to watch the people who are watching your money. At that point, it would seem to have become a trifle absurd. You become a prisoner of your own wealth, and unable to truly live.

    I'm against government funding of the arts, and firmly believe in the privilege of private philanthropy: Foundations, trusts, co-operatives, etc., all provide society with great good.

    But, given a choice, most rich people don't do much good with their riches. They exploit, and waste and consume, well beyond common sense.

    It's a problem that's never been truly addressed in the history of economic theory. When boards and partnerships collude with management to bilk the employees, the public, and the government, then we need regulation. Capitalism shouldn't just be legalized theft.

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  3. Well, I always felt that I worked hard for my salary, and in that sense "deserved" it. I don't actually agree with the columnist, except on the overpaid CEOs (we all seem to agree on that!) - I just thought the article was thought-provoking.

    I have wondered why people feel they need such huge houses. I'll confess I'd like to have one more room to store my books, but our house is such a perfect layout that adding one would ruin it. And it isn't even 2,000 square feet. But then, I've always been sort of the anti-consumer. I even hate to shop. (Un-American!!)

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  4. My one shopping weakness is books, but then, I'm a book dealer and have a built-in excuse. Before I traded them, I collected, and before that I just browsed for content. It seems I've spent most of my life around books. Worked in the county library as a teenager, spent countless hours in libraries as a college student.

    Shopping for wine can be fun, if you're into the complexities of vintages and terroirs.

    My most despised shopping is lady's clothing. I can still remember the overwhelming ennui and impatience of accompanying my mom on her trips to San Francisco in the early 1950's. I would literally pull her coat off her back, trying to drag her out of the store (there must be a New Yorker cartoon for this scene). Second worst: Having to be in the lady's hair salon. Mirrors, mirrors everywhere. I think self-consciousness is a terrible thing. Unless you're one of the .0000000001% of humanity beautiful enough to be rationally vain.

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  5. I love the mental image of you dragging your mother out of the Emporium by her coat collar. I'm sure there's a New Yorker cartoon for it somewhere.

    I actually hate shopping for women's clothing too, and do most of mine online.

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  6. Boggart6:20 PM

    What about being paid for your time? I'm paid to spend time in certain areas. Yes, there are things I am supposed to do, but if I don't finish those things within the time, then I continue them on my own time. So, that is time I'm not paid for. If I finish early, I am still expected to hang around until I have spent the correct amount of time at work. So, since I can't just leave if my work is done as I have to stay around until the time is up, I must be paid for my time.

    Now, true, I am given things to do during this time. A quiet check is kept, periodically, to ensure I am doing what I have been assigned to do adequately. I'm not paid any extra if I do things I'm supposed to do in a way that is determined stupendous. If I do the things I am supposed to do very poorly, I could potentially, be let go. Then I wouldn't be coming into the work place to spend time, and I wouldn't get paid.

    Not everyone at work is given the same things to do, although some people are. What they are paid depends on the job title AND the amount of time they have spent with our employer. If a person has spend 20 years worth of time working for our employer, he or she is paid more than someone doing the same things who, being newer, has spent less time working for our employer. Again, we are being paid on the basis of time.

    Deserving has nothing to do with it. We are simply being paid for our time. I may not be worth my salary, but the time I spend at work is determined to be worth my salary. In fact, the more years I continue with the same employer, the greater value is assigned to my time. It is a kind of barter. Someone pays me to stay more or less in one spot or area for a designated length of time. My time, is would appear, is worth something.

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  7. Our present concept of wages was invented in the early days of the industrial revolution, when measurable quantities of time and function were assigned to specific tasks and duties. Of course, wages as compensation has been around for thousands of years, but the idea of dividing days up into hours with hourly rates, etc., is much newer.

    During the 20th Century, unionization and collective bargaining advanced the cause of labor, making settled permanent wage-earning a source of general prosperity. Over the last 35 years or so, capital has been steadily gaining ground lost during that earlier phase, and now we see the erosion of worker power and rights, privileges and benefits. Increasingly, "employees" are being seen as independent units. The compact envisioned by the post-War economists, between labor and capital, has been abandoned. Exploitation is on the rise, across the globe, with populations (and local economies) played against one another, driving down pay and conditions.

    During the 1990's, American workers were told to work harder and faster, that this would result in their continued prosperity. Their reward, of course, was the export of manufacturing and technical jobs overseas. A bill of goods, as we say.

    The Hershey Chocolate Company recently closed its Oakdale, California plant, laying off 575 employees. Those jobs won't be coming back. If I were a senator, I'd introduce a bill to penalize Hershey 5% premium on its federal taxes, as punishment. That might get their attention. People don't seem to realize that one of the primary causes of imbalance of payments is sending jobs and capital abroad through foreign manufacturing. All the profits from overseas production end up in the hands of owners and investors here, but the wages and other investment activity all benefit the foreign country and its people.

    Don't know about you, but I won't be buying Hershey's candy in the future. G*d D*mn them!

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  8. Well, I suppose we could go back to feudalism, where the poor work for the rich and in return are provided food, lodging, and one new set of clothing per year... It's hard to outsource much in a feudal society.

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  9. Anonymous8:13 PM

    Within a context, earning one's pay can be made to make sense. But the crux of the argument is valid to me: it all starts with random chance.

    I have long thought that the reasons for holding people responsible for their actions are that society requires it to function and that most people find the concept acceptable. But the argument that we are responsible for who and what we are falls flat on its face as soon as we are not of the norm within our particular context. And we generally accept that reality with regard to the clearly mentally abnormal, but as a society we are as yet unable to accept the biological imperatives which drive homosexuals.

    The only conclusion I can come to is that we can earn, we can deserve, within whatever context chance has thrust us, if we are both mentally and physically able. The stories that move us most, of course, are the stories of people who achieve these social normatives in the face of great adversity. The stories we most hate are the stories of those who don't.

    But then we are not individuals in any absolute sense, we are members of societies (or outcasts from same), and our essential being is not of our own making. I also don't happen to think it is of a god's making, in any orthodox sense. Beyond that, I really think it is a mystery about which we make absolute statements at our own peril.

    The guy was a co-editor of the Blue Book? Cool.n

    Anonymous David

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  10. Boggart9:48 PM

    I trust I am not disillusioning anyone, but feudalism involved taxes – lots of taxes, which is one of the reasons peasants stayed poor. Let’s see. There was the tax you owed the lord or monastery or bishop whose land you were privileged to live on and work. If you had a banal lord, who was supposedly a public official, but things often happened, well this territorial form of lordship also involved taxes. Originally taxes were a tax in kind, but as money got going again a few bushels of wheat or days spend on the lord’s demesne didn’t cut it any more. By money getting going again, I mean after the decrease in the use of coins after the fall of the Roman Empire. (It’s an entire story on its own, so google it, or trust me.) Of course, if you had a tenancy, well you paid for that as well. Forget getting a bye when there was a bad harvest. That was between you and God. The lord got what was due regardless. (Hmmm, does this sound familiar?) There was also a domestic lordship, where a peasant commended himself to a lord for protection. This wasn’t free either.

    Unfortunately, none of these were mutually exclusive. The banal lord, for example, could more or less knock on your door and announce your and yours were under his jurisdiction. If he had the might, he had the right. The bad part is all three could ask for and receive taxes and not just once a year. Of course, a schedule was set up, for the convenience of the tax gatherer. The banal lord could even run a kind of company story as well as collect taxes. Need to buy flour? You purchased flour from his mill. Need to bake bread? You baked your bread, made by your efforts, and the flour you’d purchased from his mill, in his ovens. None of this was free. It was another subtle type of tax.

    I won’t bore you with more, but unless you are discussing the Society for Creative Anachronism with the Middle Ages as they should have been, not as they were, don’t envy feudalism. As a matter of fact, it was all these taxes that encouraged, among other incentives, peasants to run away to towns where after a year and day they were free of their various lords and could now work and pay taxes in the town of their choice.

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  11. Actually, boggart, that was an (obviously unsuccessful) attempt at sarcasm. I've noticed before that it's hard to convey tone of voice in an electronic conversation.

    And I always thought that working all year for leftovers at dinner, a bed on the floor with the dogs, and one new suit of clothes a year, was a pretty lousy setup. The middle ages were only remotely tolerable if you were male, well-born, and rich. The absence of any of those three attributes was disastrous.

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  12. Anonymous David, I see your point about mental and physical ability within a social context. But I find this statement odd:

    "But then we are not individuals in any absolute sense, we are members of societies (or outcasts from same), and our essential being is not of our own making."

    I agree with you that there's no particular intervention from a god, but I don't think you can separate human beings from the societies they live in. Human beings are deeply social creatures, and have always been so - even our immediate relatives the great apes are still social creatures. A human being completely separated from any human society is on the road to insanity. (Which is why the way we treat incarcerated prisoners is a problem, but that's a whole post in itself.)

    That doesn't mean that we can't exert any influence over our own essential being; we can and do. But we exert that influence within the bounds of society. I'd argue that the tension between society's demands and our own urges to become more individual are what drives both our own individual development, and society's.

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