The Pitchforks are Coming

[_canpakes]

Consider also that within the ideal libertarian business environment - little or no government regulation or taxation - there would exist no incentive (that I'm aware of, anyway) to create a more equitable ratio between CEO compensation and average employee wage, and every incentive to do just the opposite.

Labor is negotiated. The incentive for creating a more equitable ratio of CEO and average employee wage is the bargaining power of labor. Boards' don't have the capacity to set wages by fiat. They have to negotiate the terms of employment like everyone else. That the government artificially kneecaps the negotiating power of labor with anti-union legislation on anti-trust grounds is something that would not exist in a truly free market.

Outside of that, a very small % of the workforce is in min wage. You seem to think that if not for government dictated wage floors, businesses would be run by a ultra-wealthy plutocrats paying peanuts. Rather obviously not.

'Anti-union' legislation is a very broad descriptive term; individual cases can be examined to distill exactly what the effects and controls are that you mention. It is noted that the issue exists more for government employees than for the private sector. I'll leave it up to the reader to note which faction or entity within the government tends to promote this sort of legislation, and perhaps why.

Regarding your statement about minimum wage - I'm not sure if you are implying that I believe that without wage floors all wages would be 'peanuts' but I'll trust that this is not your conclusion, as that is not economically possible. However, I do believe that without wage floors, some businesses or industries would certainly negotiate ever-lower wages to the extent that they could do so. If such a thing were not likely then minimum wage positions would virtually disappear over the course of time and legislation like Florida's recent SPB 7210 would never see the light of day, and a black market labor force of folks being paid less than minimum wage would not exist.

There is no marketplace behavior demonstrating that removal of a wage floor leads to an increase in the number of people earning more than that wage floor's level of pay, and creates no increase in the number of folks earning less than it.

[_canpakes]

'Facilitating' in this case means nothing more than making something more appealing to some people. It isn't indicating a requirement or mandate to follow any strategy.

That's not true at all. When a government body intentionally gives Wal*Mart selective tax breaks it will not give to its competitors, taxes the local population to build roads, sewers, water, etc. to Wal*Mart, gives straight cash-subsidy incentives for Wal*Mart to build, offers a host of regulatory policies that give Wal*Mart's business model a distinct advantage over small-business competitors, or gives sweetheart contracts to Wal*Mart, the government is taking an active role in transferring wealth to the owners of Wal*Mart at the expense of the middle-income earners that comprise the small business base it is crushing. Either you are doing abuse to the notion of "make something more appealing" or you aren't getting the complaint.

I'm no fan of Wal*mart; I eschew it in favor of smaller operators and local businesses for a variety of reasons, just one of which includes their usually-successful attempts to secure favored tax treatment via negotiations with local jurisdictions or city governments.

Note that 'The Government' in this case is usually your lowest-level local representation (like your city council), which exposes that label to be what it actually is - your neighbors. As well, many of these special taxation schemes are voted upon in local elections.

Regardless of how these policies find their way into existence, let us also be honest about what is happening at Wal*Mart's end in all of this. In short, 'The government' is not transferring wealth exclusively to the owners of Wal*Mart. It is reducing the cost of operations to Wal*Mart as an entity. What 'Wal*mart' decides to do in light of reduced operational costs - be it that they would pay their employees a higher-level wage spectrum or retain the explicit gained wealth benefit for upper-level management or shareholders - is the purview and decision of Wal*Mart's management and no-one else's. They apparently have chosen the latter option.

True responsibility needs to be placed at the feet of those who actually make the decisions, not directed to a convenient-sounding scapegoat designed to fit one's political preference in order to satisfy their prejudice.

[_Kevin Graham]

I'm no fan of Wal*mart; I eschew it in favor of smaller operators and local businesses for a variety of reasons, just one of which includes their usually-successful attempts to secure favored tax treatment via negotiations with local jurisdictions or city governments.

Note that 'The Government' in this case is usually your lowest-level local representation (like your city council), which exposes that label to be what it actually is - your neighbors. As well, many of these special taxation schemes are voted upon in local elections.

Regardless of how these policies find their way into existence, let us also be honest about what is happening at Wal*Mart's end in all of this. In short, 'The government' is not transferring wealth exclusively to the owners of Wal*Mart. It is reducing the cost of operations to Wal*Mart as an entity. What 'Wal*mart' decides to do in light of reduced operational costs - be it that they would pay their employees a higher-level wage spectrum or retain the explicit gained wealth benefit for upper-level management or shareholders - is the purview and decision of Wal*Mart's management and no-one else's. They apparently have chosen the latter option.

True responsibility needs to be placed at the feet of those who actually make the decisions, not directed to a convenient-sounding scapegoat designed to fit one's political preference in order to satisfy their prejudice.

Great point. I would add that even if Walmart wasn't manipulating local politicians for competitive advantages, it would still be the low-paying mega corporation that it is today and the problems we're discussing would still exist. Skimming the government for a couple billion a year in subsidies affects the bottom line for shareholders, but has little effect on disparity in pay between CEO and their cashiers.

[_Kevin Graham]

The great thing about wage floors is that it provides a starting point during these wage "negotiations," which for most low-level workers, amounts to little more than the big guy telling the little guy how much he's going to get paid. It gets harder and harder for job hunters today as the process for hiring has become entirely automated. I can tell you that these people aren't "negotiating" anything. They're essentially taking the peanuts that's being offered because they have little choice.

Long gone are the days when a person interested in working for Company X can just walk in the front door, shake the manager's hand, and try to make a good impression. No, today the process is almost entirely left to the "online" application process. In most cases hiring has more to do with who you know as opposed to what you know.

When I returned from Brazil (for a year while working on wife's immigration papers) back in 2008 the economy was in shambles. I had hoped to work a temp job before returning to Brazil, but virtually every job I found online didn't even tell you what they were paying. You just had to find out what their "competitive pay" was after waiting weeks and sometimes months, once they've filtered you through their interview process. I remember Delta was hiring Portuguese speakers and so I applied online only to be called up three weeks later. They interviewed me for 20 minutes only to tell me that this was a three step process that would be done over the phone. If I passed that interview, then I would get a second phone call at some future point which would be step two. They wouldn't even tell me if I passed the first step, but apparently I did because they called me again three weeks later for the "second" interview. Four weeks later I got a third phone call which amounted to nothing more than a Portuguese "test." I spoke with an automated system that asked me a few questions in Portuguese and it was grading my responses in Portuguese.

I know my responses were in perfect Portuguese (a Brazilian relative was right there and assured me they were) yet I never received a call back. So I literally wasted three months for nothing and there was absolutely no one I could speak with about it. Had they not been leading me on in suspense with mystery calls I could have been taking interviews elsewhere. But I really liked the idea of speaking Portuguese at work and getting free flights to Brazil. They gave me no call back number, and I never met anyone face to face during that ordeal. I eventually got a job with my brother-in-law's company, which I applied for previously but was told by their HR dept that I didn't have a long enough work history they could verify because I was out of the country for so long. So I got in because of who I knew. He told me that it was all politics there, and that the people working in HR only hired their own friends and family members, no matter what their qualifications. He also said that this was true for virtually every company he's ever worked for, and he's been around.

So back to wage floors... I think companies would take advantage of applicants even more than they already do if there wasn't some kind of wage floor to use as a point of reference. If the MW was $15 then a company intending to pay a highly qualified applicant the usual $16/hr would have more pressure on them to up the ante. It essentially gives the applicant negotiating power without really having to do much by way of negotiation.

The theory that companies will go out of business if they pay people $15 to flip burgers is already refuted. Seattle will soon have a $15 MW and I haven't heard any news about fast food chains planning to pull out of the Seattle food market. Hmmmm. I wonder why that would be? These companies CAN afford to pay their low level workers a fair, livable wage in most cases. The reason they don't is because they have all the negotiating power without unions, and so they take those profits and distributed it to the top executives and share holders.

[_EAllusion]

Negotiating doesn't refer to a discussion over contracts necessarily. Prices of stocks are continually negotiated, and it's not as though those occur at the speed of conversational negotiation. What it refers to is the interplay between what people are willing to work for and what people are willing to pay for that work. Almost all wages exist above wage floors, not because of the existence of wages floors, but because government dictated price floors aren't necessary to mediate prices in order to prevent employers from dictating nonexistent salaries to employees.

[_EAllusion]

True responsibility needs to be placed at the feet of those who actually make the decisions, not directed to a convenient-sounding scapegoat designed to fit one's political preference in order to satisfy their prejudice.

I apologize for referring to governmental bodies as the government. It would seem you thought I believed that the government was run by a robot named governmento and not by the fallible citizens it is.

[_EAllusion]

'Anti-union' legislation is a very broad descriptive term; individual cases can be examined to distill exactly what the effects and controls are that you mention.

Unionization his highly controlled within the confines of US law. This is, in theory, to prevent the formation of a super-union that monopolizes labor and brings industry to a grinding halt. But laws nonetheless are very clear about limiting the ability of labor to organize collective bargaining power. This has a natural crippling effect on labor negotiating power. Intentionally so.

[_canpakes]

True responsibility needs to be placed at the feet of those who actually make the decisions, not directed to a convenient-sounding scapegoat designed to fit one's political preference in order to satisfy their prejudice.

I apologize for referring to governmental bodies as the government. It would seem you thought I believed that the government was run by a robot named governmento and not by the fallible citizens it is.

Oh, great. It's already bad enough that a certain subset of the population throws around the term, 'The Government' as if it is indeed some sort of nameless, faceless entity that is coming to take away everyone's guns, religion and rights, but now you've given it a name that clearly elicits a foreign identity. Certainly, this will further whip up the persecuted nativist crowd even more than usual when they realize that their oppressor sounds... latino..!

Unionization his highly controlled within the confines of US law. This is, in theory, to prevent the formation of a super-union that monopolizes labor and brings industry to a grinding halt. But laws nonetheless are very clear about limiting the ability of labor to organize collective bargaining power. This has a natural crippling effect on labor negotiating power. Intentionally so.

Like anything else, a union could abuse disruptive tactics. I have no problem with there being some limits or guidelines applied to their actions or activities, within reason.

Regardless, the presence of a union within a business or industry - or not - is not the major factor responsible for an ever-widening gap between CEO compensation and average wages. The existence of a union within the company structure may help mitigate a runaway increase in that CEO/average wage ratio but cannot prevent it, and the lack of a union would not necessarily lead to an excessive ratio. There are other, more direct factors.