Executives receive one-third of all pay in the U.S.

[marmar]

from ThinkProgress:



Executives receive one-third of all pay in the U.S.

According to a Wall Street Journal analysis of Social Security Administration data, more than one-third of all pay in the U.S. now goes to executives and other highly-paid employees:

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

Between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent, compared to 21 percent for families in the middle income quintile. Despite these numbers, Democratic leaders, “bowing to unease among lawmakers and governors in their own party,” are reconsidering the House Ways and Means committee’s proposal to implement a surtax on the richest one percent of Americans as a way of financing a portion of health care reform. The Wonk Room has more.


http://thinkprogress.org/2009/07/21/executive-pay-wsj/

[applegrove]

1. That is the kool aid they drink.

[Xipe Totec]

2. How much are you willing to bet they don't pay one-third of all taxes? n/t

[The European]

44. They actually pay more....

http://www.ntu.org/main/page.php?PageID=6

Way more...

[Blue_Tires]

46. and yet the offshore tax-avoidance industry is bigger than ever...

[The European]

49. Good thing...

... I never claimed the world was ever perfect... Do you think that will ever be avoidable? Will executive pay limits help on this issue of yours?

BTW. might your argument not be a sign that taxes are too high? Need I remind you of the Bush tax cuts that increased government income? (Bush is not my favorite guy in the world, but this was what happened)

[Blue_Tires]

50. 11 posts in and you're already apologizing for Bush policies...

:thumbsdown:

[The European]

51. Apologizing?

I only said he's not my favorite guy. There's a lot of people out there who would have tackled things differently and more to my liking. I never said I didn't like him. He's just not my favorite guy - he's not an outspoken economic libertarian like Reagan, for instance. And the way he handled the economic crisis was down-right wrong.

That aside, why don't you address what I posted, instead of attacking me personally or try to 'catch' me on the minutest of details? Neither of my points so far have been addressed.

[rucky]

52. Why are you citing a Grover Norquist organization?

Pushing a flat tax?

http://en.wikipedia.org/wiki/National_Taxpayers_Union

[The European]

54. I was not...

... familiar with neither organization before posting my link. I guess it wouldn't matter, as I was only referring to the numbers. I guess it's hard to give such numbers a right-wing slant. Numbers are numbers...

But while at it, I think the tax code should be revised and government spending habits reversed. Details as to how to go about doing that, I'm not sure as of yet. A flat tax might be a solution. Might not be. I'm no expert, and I've not really been looking into the issue.

[Ignis]

55. On'tday easetay ethay olltray.

;)

[DJ13]

3. ........

[marmar]

4. That's priceless.....

:thumbsup:

[Wapsie B]

5. Cue the Rand-nuts,

It's because they're worth it! :sarcasm:

[MisterP]

12. maybe the Randroids will volunteer to give happy endings at AIG's Regis Dana Point n/t

[HughBeaumont]

21. " . . .and. . . . and . . . and they jest WERK'D HAWRDER then yew!"

"It's called Capituhlism. Yew don't like yer lot in life, yew hafta WERK HAWRDER!!"

The joke is I'm not kidding. This is exactly what those assvacuums believe. That if we just worked a little bit harder than we're already working, we'll be rich someday too!!

Reality, however, proves to be a nice cold sledgehammer to the balls.

Despite Sowell’s insistence that tax brackets tell the real story of income distribution and economic mobility, the increasing wealth disparities between upper-class and working-class Americans confirm that indeed, the rich are getting richer at the expense of the rest of the U.S. population.

The real median income on has increased steadily since 1947, from $22,000 to just over $50,000 in 2003. Since 1979 then incredibly divergent income patterns have developed between the rich and the poor. There has been an almost negligible growth for the median and 20th percentile, with explosive growth at the top 95th percentile. The increase in income inequality since the 1970s can be described as the middle class squeeze, with the greatest changes in the bottom third and the top third. In the bottom third, income is generally as it was almost 30 years ago. The top 1% of the population have seen their incomes more than double. Among the poorest people, income grew during 1995 and 2004 due to the increase in annual hours worked, but the increase was very small. The opposite is true for the elite. According to Gregory Mantsios, director of Working Education at CUNY, “the wealthiest 20 percent of the American population holds 85 percent of the total household wealth in the country,” a statistic that does not offer much hope for the remaining percentage of the population.<10>

The poor are becoming poorer and owing more money. In 1985, the average working-class citizen owed $500, compared to $8,000 today. For the top 5%, wealth (income and assets) has increased from about $500,000 to about $1,000,000. In 2005, the average family had a net worth of $80,000. The poverty level is also much too low for the Horatio Alger myth to be applied in modern society: “a total of 14 percent of the American population – that is, one of every seven – live below the government’s official poverty line (calculated in 1996 at $7,992 for an individual and $16,209 for a family of four)”.<11>

(snip)

Evidently, as Dalton proclaimed, we are living in an era of diminished opportunities for most; this is especially true for minorities and women.

[Wapsie B]

23. That's right. We don't want success bad enough.

[handmade34]

6. maximum wage

http://www.toomuchonline.org/articlenew_2009/june8a.html

“The business world tends to breed overconfidence in CEOs. There is dumb luck in everything. But people who are successful tend to think that their success is a product of their own abilities, which leads them to overestimate those abilities. The sycophantic nature of the corporate culture at most large companies only reinforces this delusion.”
James Kwak, CEO Psychology,

[chill_wind]

7. K & R

[timeforpeace]

8. wjw

[Odin2005]

9. That is just criminal.

:puke:

[Rex]

10. Suits are still robbing the working class.

And will until the end of days...

[Lady Effingbroke]

11. Fuck 'em.

Parasites.

[lumberjack_jeff]

13. One-third, huh?

Should someone warn them about the mutant star goat about to ravage our planet?

Quickly, there's no time to lose! Away to the evacuation spacecraft!

It worked for Golgafrincham.

http://www.bbc.co.uk/cult/hitchhikers/guide/golgafrincham.shtml

[lumberjack_jeff]

14. self delete

sorry

[OhioChick]

15. That's fucked up. n/t

[HamdenRice]

16. I've never understood why rich people don't rebel against executives

It's so bad that a huge amount of corporate profits are drained off into executive compensation leaving shareholders with trivial dividends. Most rich people are not managers, so they have no interest in high executive salaries.

Why don't they rebel?

I think a lot of it is that it's not just rich who own stocks. A huge portion of stockholders are pension funds, non-profit endowments and 401Ks. The owners of wealth are being ripped off by the managers of wealth.

[Kid Dynamite]

24. That is a very strange question

why don't POOR people rebel against executives?

[HamdenRice]

27. dupe delete

[Kid Dynamite]

29. When did we veer off into talking about Revolutions

Dialing back executive pay a bit is hardly revolutionary

[HamdenRice]

35. Perhaps I should not have used revolution -- but any major social/political change

Getting stockholders angry about what insiders were doing is what led to the Securities Act and Securities Exchange Act in the 30s.

It's a resource for reform.

[HamdenRice]

28. Because they don't have power. Every revolution has begun because the ruling class was split.

I'm just puzzled that the owners of the corporations put up with looting by executives. I studied corporate finance at university in the 1980s, and one of my professors, who was already an old man and had been a close observer of this problem for maybe 50 years, always said it was a mystery to him. 25 years on, and it's the same thing.

The poor and working class have generally managed to seize power -- at least electoral power -- when the upper classes are split. This would seem to be an issue to split them, but it never does.

[lexanman]

39. Who do you might suppose are the "owners" ?

CEO's, Boards of Directors and managing partners of huge hedge funds own majority stakes in these corporations. Its like asking why are they putting up with themselves? Very odd question.

The upper classes are on the same page and control the political power structure. The poor and working class have not generally managed to seize anything. I respectfully think you may be a bit confused on the point.:hi:

[HamdenRice]

43. The class of owners is vastly, vastly bigger than the class you describe

The managers, hedge fund owners, etc., are a tiny fraction of the total number of owners of corporations.

[lexanman]

56. they are the majority owners

the guy with 100 shares in his 401k is also an owner. He however, effetively no say in how the company is run.

The class of owners that control things are precicely the group that I said before.

[HamdenRice]

59. I don't think we disagree as much as you think we do, but I wouldn't use the term, "majority owner"

I think what you are saying is that they are the controlling owners. But the thing is that they own a tiny minority of shares. The point is that they leverage their small (usually less than 1%) ownership into control.

This does not apply to so-called equity funds, which take over majority ownership in order to restructure or sell off assets. But even equity funds have as their goal carrying out these transactions and then selling the entire company back to "the public."

"The public" -- the millions of shares not owned by management are owned by wealthy individuals, mutual funds, pension funds, endowments of universities and other non-profits, and yes, the little guys with their 401Ks or playing the stock market.

Restoring corporate democracy -- the power of shareholders to vote shares and affect corporate behavior -- would be one tactic in the much broader struggle of bringing some sanity back to the economy. My old prof once said, however, that most stockholders meetings consist of a junior corporate lawyer with a suitcase full of proxies in a hotel room in Wilmington, Delaware. (Proxies are papers that give him to right to vote other peoples shares.)

[JHB]

36. Exactly...

How many people have enough stock to make it worth their while to attend stockholder's meetings and use their shareholder's votes? And compare that to the number who hold only a little bit and it's not worth their time and money to vote, so they let managment retain their proxy votes?

And there's one of the problems with the "ownership society". If ownership is so diluted that the owners don't actively fulfil their role in the managment of the company, the managers can insulate themselves to thoroughly they can do almost anything they want.

[leftstreet]

37. Oh please. They're paid frontline soldiers in The Class War

They keep the rest of us at bay.

But then you know this.

[Vidar]

17. And virtually every measure of societal dysfunction is directly proportional to this disparity.

[Hannah Bell]

22. precisely.

[redqueen]

18. Sick and indefensible. And VERY bad for the economy. (nt)

[Lars39]

19. Pay of Top Earners Erodes Social Security

OP by question everything: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6119131
Source: WSJ Read more: http://online.wsj.com/article/SB124813343694466841.html

The nation's wealth gap is widening amid an uproar about lofty pay packages in the financial world. Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data -- without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don't include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

The pay of employees who receive more than the Social Security wage base -- now $106,800 -- increased by 78%, or nearly $1 trillion, over the past decade, exceeding the 61% increase for other workers, according to the analysis. In the five years ending in 2007, earnings for American workers rose 24%, half the 48% gain for the top-paid. The result: The top-paid represent 33% of the total, up from 28% in 2002.

The growing portion of pay that exceeds the maximum amount subject to payroll taxes has contributed to the weakening of the Social Security trust fund. In May, the government said the Social Security fund would be exhausted in 2037, four years earlier than was predicted in 2008. The data suggest that the payroll tax ceiling hasn't kept up with the growth in executive pay. As executive pay has increased, the percentage of wages subject to payroll taxes has shrunk, to 83% from 90% in 1982. Compensation that isn't subject to the portion of payroll tax that funds old-age benefits now represents foregone revenue of $115 billion a year.

(snip)

Lifting the earnings ceiling could result in higher Social Security benefits payments to higher-income individuals, since benefits are based on a worker's highest 35 years of earnings. But the additional tax revenue would have decades to earn a return, thus offsetting the cost of the additional payments. Social Security Administration actuaries estimate removing the earnings ceiling could eliminate the trust fund's deficit altogether for the next 75 years, or nearly eliminate it if credit toward benefits was provided for the additional taxable earnings. Employers oppose changes that would increase their share of payroll tax. In addition, eliminating the ceiling would prevent employers from using a controversial but common technique, based on payroll taxes, to award additional benefits to executives who participate in rank-and-file pension and 401(k) plans.

[redqueen]

20. Thanks for cross-posting that here. (nt)

[Uncle Joe]

25. Kicked and recommended.

Thanks for the thread, marmar.

[ProdigalJunkMail]

26. this begs the question, however

what denotes a 'highly paid employee?' i could be considered highly paid in comparison to some...but not so much in comparison to others. How can a statement like that stand with such vague verbiage?

sP

[KittyWampus]

32. over 10x what lowest earning employee in an organization or company makes = highly paid

[ProdigalJunkMail]

38. so, i guess i am evil-rich if i make more than that?

riiiiiiight...

sP

[Sentath]

41. Evil? I don't know you, couldn't guess.

Is your business structure exploitative?

Seems likely.

[ProdigalJunkMail]

42. well, it would seem that many here look at ANYONE

who earns more than their 'ok' amount as evil. I make money from work that I do (I don't own the company) and from side work as well (in a little company that I do own). But, there are plenty of companies out there that have minimum wage employees...should all of those companies never have anyone making more than $72.50 per hour? That works out to only about $150K a year...and, yes, some jobs ARE worth more than that...

sP

[anonymous171]

30. Fuck them. That is all. nt

[KittyWampus]

31. now, now. Show some respect to our over-lords

[Orsino]

33. Missing number: HOW MANY executives is that?

Just how pitifully few individuals took a third of that US$6.4 trillion? And if we looked at only the last few years, would the proportion be even smaller? Was the Journal snowing us by including numbers that preceded Reagan?

[jgraz]

34. But... but... but they contribute SOOO much to society

:banghead:

[The European]

45. How about managing competitive companies that supply goods and add jobs to the American economy?

As well as improving standard of living for everyone when they're expanding the American economy...

[Quantess]

57. This one's granite pizza was well deserved.

[jgraz]

58. You don't actually think they do that, do you?

:rofl:

[troubledamerican]

40. That's "Swine Wealth" ... Oink Oink

[4dsc]

47. WE should go back to taxing them at 70%..

This wasn't a problem before the Reagan era lower the top rates..

[redqueen]

48. ...

:kick:

[Karmadillo]

53. That will come to an end as soon as the Democrats take back the White House and the Congress

nt