Sunday, August 15, 2010

Working (or not) for a Living in The Great Recession


Apparently, some jobs just aren't worth it, even during the Great Recession.


In typical blog fashion, Flint Expats has hovered around a ton of issues related to workers, employment trends, compensation and economics without ever attempting to pull it all together into one neat package. (We've done a much better job providing an over-arching treatment of Flint bars and lounges. Yee haw!) Well, I'm not going to try and and adopt a holistic approach with this post, but I did run across two items today that seem to provide a lot of insight into U.S. employment trends in a short amount of space. I know that this is a very unrigorous approach that will no doubt be shredded in the comment section, but just consider these two bits of info:


First, here's a heart-warming graph that charts the ratio of CEO pay to average worker pay. It only goes up to 2005, but you get the idea. In 1965, U.S. CEOs in major companies earned 24 times more than an average worker. By 2005, the CEOs were making 262 times the average worker. (Click to enlarge.)

Second, check out Daniel Gross's great piece in Slate on the growing dissatisfaction of workers who actually have a job:
The economy has been growing for a year, and corporate profits have surged—Standard & Poor's estimates that profits of the constituents of the S&P 500 rose nearly 52 percent in the second quarter of 2010 from 2009. Much of that impressive profit growth has been driven by the remarkable gains in efficiency and productivity that corporate America has notched since the recession took hold. Last year, productivity—the ability to produce more with less—soared 3.5 percent, up from 1 percent in 2008 and 1.6 percent in 2007. Yes, companies embraced the Gospel of Cost Cutting with missionary zeal—printing on both sides of the paper, eliminating bottled water, turning off the lights. But most of the gains came straight out of payroll. Companies slashed salaries and curtailed benefits, all while asking shell-shocked veterans to pick up the slack for downsized colleagues. Even as business has picked up, companies have been extremely slow to hire; the private sector has added just 630,000 jobs so far this year. And when it comes to wages and benefits, corporate America's bean counters could make Scrooge blush. Many of the firms that slashed pay or cut 401(K) matches haven't restored them even though their balance sheets are in [good] health.

3 comments:

  1. Hats off to this guy for not taking that crap. I would imagine being in the service industry provides little pay and respect from those you serve. Perhaps this will spark more debate over working conditions. With regard to the charges, to hell with them.

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  2. Old guy from MillingtonAugust 20, 2010 at 12:01 PM

    What the graph proves to me is that today its better to be a CEO than an average worker. Heck, it was better in 1965 too!

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  3. I agree with Oldie that it has always been good to be the king; although now is especially glorious.

    The book, Ill Fares the Land, says the CEO of Walmart earns 900 times the average Walmart employee. But that is only one year's income. In terms of accumulated wealth, the Walton family owns more money ($90b) than the combined wealth of 40% of Americans (120m people).

    If there's a need for a minimum wage to correct market distortions, why not a maximum wage? CEO pay is perversely distorted.

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