Thursday, April 17, 2014
Workers are worth precisely what the labor market says they're worth, not a penny more
A friend of mine was complaining about how much more undeserving CEO's, entertainers, and pro athletes make compared to the working stiffs at the bottom and how that income disparity is what's wrong with America. Here was my response:
Seriously? Working class jobs taken individually aren't worth much to a company because anybody can do them. CEO jobs are worth 100s of times more because very few people can do them well.
LeBron James, Jay Z, and Jen Aniston make tens of millions a year for two reasons, because millions of people want to watch them do what they do and because only a few people, if any, can do the same thing. The CEO's of Wal Mart, Amazon, and GE make tens of millions a year because the stockholders of those companies know that not everybody is capable of shepherding $Billion companies into profitability and if the guy at the top makes decisions that make their stock rise, then he deserves a fat reward.
The guy who bolts bumpers onto F-150's makes a 1,000th of what the CEO of Ford makes for the same two reasons, nobody wants to pay to watch him bolt bumpers on F-150's and there are literally millions of people who can do that same job tomorrow if he decides to quit because he feels underpaid.
Unless you don't believe in the laws of supply, demand,and price in the free labor market, and prefer that some governing body impose income equability onto private companies, then to make more money, become more valuable to your employer.
Who are we to tell somebody else that they aren't worth what they earn?
Every employee, from the Fortune 500 CEO to the guy who refills condom machines at interstate truck stops, is worth exactly what the labor market will bear for his effort.
Anybody like to tell me where I'm wrong?