Labor Unions and The Problem of "more"

[Diogenes]

Is that what you say to wealthy people when they want tax cuts that add to our deficit? That the money has run out?

Their money belongs to them. Not you.

A tax obligation beyond ten percent is theft.

[Diogenes]

Yeah! Unions, composed of those greedy people! They've managed to raise their wage demands at the same rate as CEOs. Oh, wait, no, they haven't.

http://www.slate.com/id/2290510/pagenum/2

The relevant quote: "If a CEO can make a lot in the short-term, regardless of what happens in the long-term, then he would require superhuman integrity to care sincerely about the long-term."

And we know CEOs have superhuman integrity, right?

Example: I have been made aware of a company which is not doing well and the CEO has received a bonus more than double his annual six-figure salary. This same bonus is almost half the total for the company bonuses (for executives and managers because they haven't gotten raises for three years).

This company is losing money and they're giving bonuses?! And the CEO has the gall to take a bonus more than double his salary?! Clearly, union greed is the problem here. Oh, wait, no, this same company's unions have been making concessions and just got a three percent raise.

The really fun part is the bonuses were awarded because the rank-and-file got a three percent raise and the executives were envious. I bet the other executive's bonuses weren't as nice as 200%, but better than three percent of salary.

Those blasted unions! They should learn from their betters and demand even _more_ money!

Why must you play the envy game? What business is it of yours what money someone else makes as long as they aren't doing anything illegal?


Your attitude reminds me of that old Russian joke about being granted a wish by a Genie. Instead of wishing for a cow of his own, the Russian wished his neighbor's cow would die.

[rjaypeters]

Why must you play the envy game?

Not me. I don't envy the CEO because he is doing something wrong!

What business is it of yours what money someone else makes as long as they aren't doing anything illegal?

It isn't my business, but I thought I'd share here because it is an example of greed. Greed which should be constrained by a sense of proportion, decency and fear of the board of directors because the CEO and executives are NOT increasing shareholder value.

It would be my business if I was a stockholder, wouldn't it?

I was being sarcastic about how the unions should demand more money. Since the company is losing money, why is anyone getting more money?! Because they can! Because the executives of this firm granted a pay-raise to employees and then felt envy!! Kill the (not-so) golden goose? You can't, right? The money won't run out, will it?

Your attitude reminds me of that old Russian joke about being granted a wish by a Genie. Instead of wishing for a cow of his own, the Russian wished his neighbor's cow would die.

Wrong, completely. I'd rather this company and all the others were well enough run they wouldn't have these problems, but they do.

[Diogenes]

Why must you play the envy game?

Not me. I don't envy the CEO because he is doing something wrong!

Perhaps morally, but not legally. There was a time when the two things were mostly the same, but that time is past.

What business is it of yours what money someone else makes as long as they aren't doing anything illegal?

It isn't my business, but I thought I'd share here because it is an example of greed. Greed which should be constrained by a sense of proportion, decency and fear of the board of directors because the CEO and executives are NOT increasing shareholder value.

It would be my business if I was a stockholder, wouldn't it?

Yes, and you would have a vote to affect the outcome.

I was being sarcastic about how the unions should demand more money. Since the company is losing money, why is anyone getting more money?! Because they can! Because the executives of this firm granted a pay-raise to employees and then felt envy!! Kill the (not-so) golden goose? You can't, right? The money won't run out, will it?

Your attitude reminds me of that old Russian joke about being granted a wish by a Genie. Instead of wishing for a cow of his own, the Russian wished his neighbor's cow would die.

Wrong, completely. I'd rather this company and all the others were well enough run they wouldn't have these problems, but they do.

My apologies. I wish the companies were run better too. I personally think that the CEOs of the American car companies made unsustainable deals with Autoworkers Unions knowing full well that they would wreck the company in future years, yet they did so knowing that by the time their malfeasance developed consequences, they would be long gone with their bag full of money.

The CEO's traded their convenience in dealing with the Unions for the future of their companies.

[rjaypeters]

Where is the leadership executives are supposed to supply? Why weren't, aren't all of them reducing their salaries, foregoing bonuses, etc.

Silly question, sorry, so much easier to lay-off substantial percentages of workers, squeeze the same amount of work out of fewer people, and reward the executives for their business acumen. Those actions are something shareholders will like.

[Diogenes]

Where is the leadership executives are supposed to supply? Why weren't, aren't all of them reducing their salaries, foregoing bonuses, etc.

Silly question, sorry, so much easier to lay-off substantial percentages of workers, squeeze the same amount of work out of fewer people, and reward the executives for their business acumen. Those actions are something shareholders will like.

Unfortunately yes. Shareholders always love it when companies lay off workers. That normally improves the companies fiscal position.

[seedload]

Where is the leadership executives are supposed to supply? Why weren't, aren't all of them reducing their salaries, foregoing bonuses, etc.

Silly question, sorry, so much easier to lay-off substantial percentages of workers, squeeze the same amount of work out of fewer people, and reward the executives for their business acumen. Those actions are something shareholders will like.

The ratio of CEO compensation to average worker compensation has been declining since 2000. It is now less than half of what it was in 2000. Most of that decline happened while ... wait for it ... Bush was in office.

What source? Freaking right wing blog web site? Nope, the AFL-CIO...

http://www.aflcio.org/corporatewatch/paywatch/pay/

So, you may want to claim that it-isnt-enough, but please stop with the it-aint-happening.

[rjaypeters]

So, you may want to claim that it-isnt-enough, but please stop with the it-aint-happening.

No, it's-not-enough and the statistics cited are from a small sample.

When I read the page you reference, I read about laws requiring limits on executive pay at companies that received "exceptional assistance" from companies in (under?) the TARP.

I didn't write about laws, I wrote about leadership. Did the executives cited above do so voluntarily?

Also, the example I gave was a non-S&P 500 company. How many are there of those compared to the S&P 500?

[seedload]

So, you may want to claim that it-isnt-enough, but please stop with the it-aint-happening.

No, it's-not-enough and the statistics cited are from a small sample.

When I read the page you reference, I read about laws requiring limits on executive pay at companies that received "exceptional assistance" from companies in (under?) the TARP.

I didn't write about laws, I wrote about leadership. Did the executives cited above do so voluntarily?

Also, the example I gave was a non-S&P 500 company. How many are there of those compared to the S&P 500?

Sorry, you are right, it was silly for me to give an example with a sample size of 500 when you had already provided an example with a sample size of 1. My bad.

[rjaypeters]

Thank you for answering the points of my post.

[seedload]

Thank you for answering the points of my post.

Really? Think this through carefully now. You made no points. You asked questions.

I didn't answer the "questions" of your post because they were nothing more than requests for me to go and do further research. Not your slave, sorry. If you want to refute what I pointed out, then go and answer your own questions.

But, if you require answers, here they are.

Did the executives cited above do so voluntarily?

I don't know

Also, the example I gave was a non-S&P 500 company. How many are there of those compared to the S&P 500?

I don't know.

[rjaypeters]

This is a useful page: Statistics about Business Size (including Small Business) from the U.S. Census Bureau

http://www.census.gov/epcd/www/smallbus.html

Code: Select all

                          Firms        Paid Employees
Employer firms           5,885,784    115,074,924

Firms with 10,000              890     30,438,785
employees or more

I gave an example which I don't even claim to be a sample. The S & P 500 are five hundred firms out of about 5.885 million.

Is that a representative sample?

Yes, the essence of a conversation is answering the points of the correspondent. I have been writing about leadership from the executives.

I have read of a few examples of executives voluntarily reducing their salaries and bonuses during the recession. They are cited as the exceptions, rather than the rule.

[seedload]

This is a useful page: Statistics about Business Size (including Small Business) from the U.S. Census Bureau

http://www.census.gov/epcd/www/smallbus.html

Code: Select all

                          Firms        Paid Employees
Employer firms           5,885,784    115,074,924

Firms with 10,000              890     30,438,785
employees or more

I gave an example which I don't even claim to be a sample. The S & P 500 are five hundred firms out of about 5.885 million.

Is that a representative sample?

Yes, the essence of a conversation is answering the points of the correspondent. I have been writing about leadership from the executives.

I have read of a few examples of executives voluntarily reducing their salaries and bonuses during the recession. They are cited as the exceptions, rather than the rule.

Look, I didn't realize that you were speaking exclusively about 'leadership'. I probably got confused because you didn't say 'leadership' until your fourth post or so. Maybe it was the topic of the thread that mixed me up as well, I thought that your points on executives not having declining compensation was interesting relative to worker compensation given the thread context, but again, I just didn't realize that 'leadership' was what we were exclusively talking about. My bad.

Oh and, sorry for the sarcasm in my posts. I assumed that since you started off exceptionally sarcastic in your first post, that it was allowed. But again I am wrong because sarcasm and leadership don't even belong in the same sentence. Crap, there I go again. Sorry.

And about my accidentally calling your example a sample, that was my mistake because when I read your response comparing your sample (I mean example) to my referenced sample, I assumed that you were the one doing the comparing, but really you were talking about leadership, so I am really off base here. Sorry for that.


BTW, I am not really anti-union except for specific practices. Unions get the best deal they can. I don't like violence or intimidation, but otherwise, collectively working out a deal for the benefit of skilled workers can be a good thing.

Similarly, I don't see a problem with an executive working out a contract that gets him/her the best deal the he/she can get. The contract happens in advance and contains what happens in good times and bad. I can't see why someone should give back the bad time money if it was in the contract to begin with. The contracts are generally performance based after all. Maybe not as weighted as you would like them, but they are performance based. If you want it to be a winner take all match, then you beef is with the owners (stock holder/ board) and not with the executive.

regards

[rjaypeters]

The example I have given is about bonuses given ex-contract. The recent bonuses were triggered by executive envy of three percent raises for the non-managerial rank and file.

Indeed, boards are supine. From my original posting:

http://www.slate.com/id/2290510/pagenum/2

quote: Why do we pay CEOs so much more than they deserve? "Ratchet, ratchet, ratchet," Buffett said in his interview with the Financial Crisis Inquiry Commission. "That's the name of the comp[ensation] board." unquote.

I wasn't complaining about the CEO's six-figure salary*, I was complaining about the bonus that is more than 200% of his salary, ex-contract.

Just for fun, think about worker attitude if the details of this executive's recent compensation got to the work force of this company. Excellent leadership.

For the record, I don't love unions any more than I should. They tend to be smelly, dirty things riddled with corruption which favor practices and individuals who should be eliminated or disciplined for bad work and attitudes. They are also ripe targets for takeover by organized crime. They are, at best, a necessary evil and I would join one only if I must.

*Another matter. See your comment about boards of directors and their sub committees. I agree.

[Skipjack]

I am in a very young industry and I have directly been able to watch the formation of unions and what lead to this.
I am a 3D artist (doing more development work right now, but I am still a 3D artist). This industry is really only about 2 decades old and I have been part of it from the start.
Being a 3D artist requires a good education, quite a bit of intelligence, talent and much more. It used to be a really well paid position, but wages have gone down lately.

So what happened:
It got really popular to do this line of work and so a lot of people started doing it. There also was and still is a very high demand for this line of work as well.
That is not the problem though. This industry did not have a union and so people were abused, really badly. There were accounts of artists working at Electronic Arts (the largest and richest game developer in the entire world at the time) that had to work long overhours night shifts and much more during crunch times that were never compensated in any way.
The account of the wife of one such artist on a public blog shook the industry.
There were reports of artists being promised bonuses after a game ships, so they would work overhours for free, only for them to be fired right after the game went goldmaster.
Artists were fired right before a game went gold, or a movie was released and their legitimate place in the credits was denied to them.
The demands on the visual effects departments have been going up, up, up. The salaries have been going down. Entire visual effects businesses went out of business because of the situation.
The unfair part is that the salaries for actors that ARE organized in unions have been going up at the same time. One has to understand though that compared to the actors, the visual effects have been contributing more and more to movies and TV- shows. One might even want to claim that visual effects have made the jobs of everybody else easier. We can fix everything, bad direction, bad acting, etc.
Many badly written movies were watched simply because of the promise of visually stunning effects.
Despite the 3D and visual effects artists not having a union, their jobs have been going overseas as well. Artists were sometimes even forced to go work overseas and build the departments that would ultimately cost them and others their jobs.
Within an environment like this, it is natural for a counter- movement to develop. It is only natural for those that have been ripped off and mangled by the system to organize themselves.
Are you really surprised by that?!
It is still a slow process and even among the artists people are not sure about whether they want it or not. What everyone is agreeing on is that the current situation has become unbearable. So something will happen, or the entire industry will crumble, the quality of work will suffer from that too. Though some CEOs obviously care more about a couple of extra cents saved than the quality of the work. This is quite visible in the car industry, actually. Cheap work from China and India does save a couple of cents per car, but it will backfire at some point...
Well its all good as long as some CEO gets an extra fat bonus for that, I guess. He wont be in office anymore when the whole thing starts breaking apart.
My point being: You push to hard into one direction, you will generate a force in the oposite direction. You push your employees to hard, they will organize themselves and push back. It is the nature of things.