CEOs made nearly 200 times what their workers got paid last year

[Twilight Hue]

Yes, but it reaches a point when it's not sustainable and social trust breaks down. It's more the perception of unfairness than mere wealth inequality. There's always going to be wealth disparities but when it gets too extreme, it's dangerous for society. When you have people working multiple jobs and still can't make ends meet, people being thrown out in the street because they can't afford rent, etc. but CEOs and other fatcats getting raises and getting richer and richer with a corrupt government who rewards said fatcats at the expense of the rest of the people, you have a bomb waiting to explode. We're at that point, and it's only a matter of time before it goes off. A revolution is coming and it ain't gonna be pretty. You can only **** people out of being able to survive for so long before they've had enough.

Rising inequality: A major issue of our time

Zia Qureshi discusses the recent trend of rising inter- and intra-country inequality and what policies could help mitigate it.

www.brookings.edu

Inequality decimating social trust in Europe, finds WHO report

Governments and policymakers should heed the report's "ominous warnings", said the institution's regional director for Europe.

www.euronews.com

Why do inequality and deprivation produce high crime and low trust? - Scientific Reports

Humans sometimes cooperate to mutual advantage, and sometimes exploit one another. In industrialised societies, the prevalence of exploitation, in the form of crime, is related to the distribution of economic resources: more unequal societies tend to have higher crime, as well as lower social...

www.nature.com

Problem is that people will always be powerless in face of the elites who are the only ones calling the shots. Even if gains are made, it will always be in the short term and temporary, and not in the long term.

Wealth inequality will always be here because we meaning us common folks are the ones that created this In the first place.

The only way that wealth inequality will ever be defeated proper is just not to take any more jobs with dismally poor pay that is instrumental and key in keeping wage inequality alive and well for the elites.

 

[Saint Frankenstein]

Problem is that people will always be powerless in face of the elites who are the only ones calling the shots. Even if gains are made, it will always be in the short term and temporary, and not in the long term.

Wealth inequality will always be here because we meaning us common folks are the ones that created this In the first place.

The only way that wealth inequality will ever be defeated proper is just not to take any more jobs with dismally poor pay that is instrumental and key in keeping wage inequality alive and well for the elites.

Most jobs available are relatively low pay. If that's all there is, people are going to take them to try and survive. You cannot live without an income now, especially since the government is throwing people off welfare by the millions right now.

It doesn't matter what the so-called elites want. There's more of us than them and we're past the point of denying that there's a cataclysm on the horizon. All the data and what's going on in the world points to it. Just in the US, we're headed for even worse economic times. The economy is going to crash again within a year, and they're starting to admit it. The global economic system we have is not sustainable and is coming apart now. As soon as we went to a debt based financial system, the writing was on the wall. Every American household has a share of $100,000 of the national debt. It will never be paid off.

So they'll go hide in bunkers but they'll be found and pulled out of them. I guess they better hope that Elon's and Bezos' space phalluses actually work.

 

[sun rise]

Well maybe workers shouldn't keep encouraging this type of behavior by accepting the job at dismal pay rates.

When the alternative is starvation, that is not a real choice.

 

[Vinayaka]

I've always found the Gini coefficient interesting when seen by country. Income inequality: Gini coefficient

 

[Twilight Hue]

When the alternative is starvation, that is not a real choice.

Then the unfairness will just have to continue on then.

You know as well as I do that is just the reality of it. It's been that way since civilization started.

 

[Soandso]

Then the unfairness will just have to continue on then.

You know as well as I do that is just the reality of it. It's been that way since civilization started.

Not for all civilizations. Some had pretty cool ideas about economics

A potlatch involves giving away or destroying wealth or valuable items in order to demonstrate a leader's wealth and power.

Potlatch - Wikipedia

en.m.wikipedia.org

During potlatch ceremonies the richest people would throw a massive party and literally give away almost all of their material wealth and spread it among their neighbors in a big event just to show off their wealth and to throw a good party. They'd make their wealth back through land use fees from property they owned and other such methods so they could throw another massive potlatch the next year and do it all over again. Imagine if all the wealthiest people in America gave away all of their wealth to their communities instead of just endlessly hoarding all of their wealth

 

[Brickjectivity]

Is this fair?

It is a question of more or less fair. It seems more fair than ratios in non capitalist countries, however there are ways to make it even better in capitalist places. Some places are more fair than others.

In the past there have been several ways to make it more fair and also more profitable for all.

Spoiler: Improving fairness both for workers and businesses

#1 legal unions for workers.
#2 prevention of price-setting
#3 trust-busting, limitation of business sizes
#4 limited taxes and no invisible taxes
#5 Block non-compete clauses placed upon individuals.
#6 Enforce patents and copyrights.
#7 Regulate banks and punish bad loan policies
#8 Observe the failures of economic mistakes and learn from them

I would add a #9 that the courts need something. There's no excuse for the amount of frivolous litigation. We cannot support this increasingly burdensome amount of frivolous litigation. Lawyers are in such demand that they are priced out of reach.

#3 the limitation of business sizes almost never happens sufficiently. We have national food chains, national franchises, national automakers, national employers, national banks etc. Some businesses serve millions of people or hundreds of millions. This is subsidized by government taxes of individuals. Trust busting means keeping businesses smaller than that -- a lot smaller. This forces competition, division of markets at the expense of some inefficiency. Trust busting first appeared as a result of robber barons and trusts who formed monopolies that worked to make life suck for citizens. This was bad for the union, and so trust busting laws were made.

 

[Shaul]

This is a distortion. It only includes CEOs whose companies made profits. Most companies don't make such profits. Furthermore it ignores that many companies take years before the CEOs see those profits. These compensations should be averaged with the many previous years where many CEOs made no money at all. It also ignores all the CEOs who lost money (their investments). CEOs aren't paid a salary. They receive a portion of the profits. Which they "earn" by taking risks of losing money.

 

[TagliatelliMonster]

The median pay package for CEOs rose to $16.3 million, up 12.6%, according to data analyzed for The Associated Press by Equilar. Meanwhile, wages and benefits netted by private-sector workers rose 4.1% through 2023. At half the companies in this year’s pay survey, it would take the worker at the middle of the company’s pay scale almost 200 years to make what their CEO did
CEOs made nearly 200 times what their workers got paid last year

Is this fair?

Define "fair".

I'ld require more context to see if it is "fair" and I'ld evaluate it on a case by case basis.

If the workers are all underpayed in terms of free market wages for similar jobs, then no.
If the workers however earn a reasonable or let alone above average pay in terms of free market wages for similar jobs, then yes.

 

[TagliatelliMonster]

Of course it isn't fair. It's exploitative!

Is it?


Suppose I as a CEO make 30x what my workers make.
Suppose my workers make double of what similar jobs in other companies pay.

Am I then "exploiting" my workers, even though I'm paying them double of what they would earn doing the same thing elsewhere?

 

[TagliatelliMonster]

This is a distortion. It only includes CEOs whose companies made profits. Most companies don't make such profits. Furthermore it ignores that many companies take years before the CEOs see those profits. These compensations should be averaged with the many previous years where many CEOs made no money at all. It also ignores all the CEOs who lost money (their investments). CEOs aren't paid a salary. They receive a portion of the profits. Which they "earn" by taking risks of losing money.

Exactly!

It's election time here in Belgium.
There is this one party, generally referred to as the communists, who have made a big point about how the salaries of workers of companies who made monster profits last year should all be raised. I was in the audience of a debate and managed to ask a question. I asked the commie "if a company doesn't have high profits or worse even: takes a loss, can it then reduce the salaries of the workers?"

Received a very political babbling non-answer off course. Dodgeball of the highest level.
I guess they don't consider it a two-way street.

The CEO and the board is the "big bad wolf" and success thanks to hard work and high risk apparently should be punished.
And when setbacks occur and the companies take a loss, then the CEO and the share holders off course should just take the hit and shut up, while continuing to overpay their workers who do their thing from 9 to 5 and don't have to worry about anything else.

 

[anotherneil]

I wouldn't want it any other way; I'd rather have a job working for someone who's making 1000x what I make than not have a job at all.

If people knew what was in their best interest, they also wouldn't want it any other way.

The reason they get paid so much is because they have what it takes to make a company run successfully; that means it's providing useful goods and services to society, and that's a good thing, not a bad thing; it also means they're providing jobs.

Furthermore, they're using that money for goods and services for themselves & guess what that means? Yes, that's correct! That means more jobs for those who work for other companies that produce the goods and services that they're buying.

Anyone can make what they make if they can offer the talent, knowledge, skills, experience, etc. that they have to earn and deserve such a pay rate.

If someone with the skills they have doesn't get paid what they demand, then they're not going to want to put their time & effort into making any company run successfully, and that means that company won't be producing goods and services that we all need, and it won't be creating jobs for people to have.

If everyone got paid the same regardless of occupation or position, then no one would want to take a risk to invest in starting their own business or go through years of college and going into debt to pay for tuition to become physicians, dentists, nurses, engineers, research scientists, lawyers, accountants, business experts, etc., when they'd be much better off working a menial job since they can start sooner and it's not as risky, but in that case who's going to be setting up and running a business to offer anyone menial jobs?

Not only are income and wealth inequality not problems that need to be solved, it's an economic necessity in order for things to happen.

Is it necessary to be a rocket scientist to understand any of this?

 

[Stevicus]

Is it necessary to be a rocket scientist to understand any of this?

No, I think this topic would be more in the realm of political science. That's part of the problem in discussions like this, since a lot of people approach economics as if it's a hard science, while it is actually a social science.

I suppose the perceived value of a person's vocation might be a factor in determining their actual salary, in addition to how rare their abilities might be. For example, a rocket scientist would have to have years of education and training to become qualified for such a position - something that only a few people might be willing or able to do. Thus, a high salary for a rocket scientist would make sense.

This is especially true if there are actual shortages of qualified personnel in various jobs. Where there are shortages in personnel, the principle of supply and demand would dictate that the perceived value of those occupations would increase. There are, indeed, reported shortages in numerous areas, such as healthcare and various skilled occupations. If there aren't enough skilled plumbers to go around, then one might have to pay more to hire a plumber.

On the other hand, those with degrees in business administration and accounting seem rather commonplace in comparison to rocket scientists. There are even people who run businesses even without having an advanced college degree.

And there doesn't appear to be any shortage of people applying to become CEOs. There are lots of people fighting tooth and nail to get up the corporate ladder, so it would seem that the fact that they're easily replaceable should reduce their perceived value.

Of course, no one is arguing that everyone should get the same compensation regardless of occupation or position, but I'd like to see the mathematical model which can logically define what each profession and job category is "worth." If economics was the hard science that so many imply it is, then it should be no problem to do this. Trouble is, capitalists and other conservative economists refuse to admit that economics is a social science, and more in the realm of philosophy, politics, and history - not physics or mathematics.

 

[TagliatelliMonster]

No, I think this topic would be more in the realm of political science. That's part of the problem in discussions like this, since a lot of people approach economics as if it's a hard science, while it is actually a social science.

I suppose the perceived value of a person's vocation might be a factor in determining their actual salary, in addition to how rare their abilities might be. For example, a rocket scientist would have to have years of education and training to become qualified for such a position - something that only a few people might be willing or able to do. Thus, a high salary for a rocket scientist would make sense.

This is especially true if there are actual shortages of qualified personnel in various jobs. Where there are shortages in personnel, the principle of supply and demand would dictate that the perceived value of those occupations would increase. There are, indeed, reported shortages in numerous areas, such as healthcare and various skilled occupations. If there aren't enough skilled plumbers to go around, then one might have to pay more to hire a plumber.

On the other hand, those with degrees in business administration and accounting seem rather commonplace in comparison to rocket scientists. There are even people who run businesses even without having an advanced college degree.

And there doesn't appear to be any shortage of people applying to become CEOs. There are lots of people fighting tooth and nail to get up the corporate ladder, so it would seem that the fact that they're easily replaceable should reduce their perceived value.

Of course, no one is arguing that everyone should get the same compensation regardless of occupation or position, but I'd like to see the mathematical model which can logically define what each profession and job category is "worth." If economics was the hard science that so many imply it is, then it should be no problem to do this. Trouble is, capitalists and other conservative economists refuse to admit that economics is a social science, and more in the realm of philosophy, politics, and history - not physics or mathematics.

I think what you describe is only one part of the equation. Another part is also supply and demand of the services / products the company you work for has to offer.
There's also the economic feasibility of actually paying the worker. There's budgeting involved there. You can have the rarest skill in the world, if your skill is not in demand - or if there are alternatives that aren't rare - then you will not be earning a premium.

I like to compare this with professional athletes as an analogy.

Take soccer players vs tennis players. Both relatively popular sports.
But only the top 5 of ATP ranked players will earn what easily the top 1000 of soccer players earn.
As a tennis pro, you will be rather lucky if you manage to break even if you are only ranked top 300. If you're lower then that, chances are enormous that you will not be able to make a decent living playing tennis.

Meanwhile, a soccer player playing in 2nd or 3rd division in a "soccer country" will still be earning 500k a year easily.

At the same time, I can guarantee you that being a tennis pro (of any level) requires a LOT more dedication and work then a soccer pro at even the highest levels.

Off course, sports a species of their own as "professions", I realize that. But it makes for a nice analogy. The same is true in business to a great extent.
You can be extremely skilled, your skill can be extremely rare... but it will eventually come down to in how high demand your skill is.

Yes, there are a LOT more business consultants then there are rocket scientists.
But there are MILLIONS of businesses that require business consultants, while there is only a handful of companies that require rocket scientists.
Rockets scientists are most certainly outnumbered in absolute numbers. But are they also that outnumbered when it comes to actual available jobs?

Rarity of skillset isn't really measured in absolute numbers. It's measured in terms of "how many individuals vs how many available jobs".

Back when I started in IT, it was the number 1 choice of students in college and university. My school delivered double the amount of programmers to the job market every year compared to the amount of business consultants, marketeers, etc. But in the job market there were a LOT more vacant jobs in IT then there were in those other sectors. So even though programmers outnumbered all others in absolute numbers, they were "rarer" on the job market because even in those huge numbers, there still weren't enough of them to fill all available jobs.

So it needs to be put into perspective. There's a lot more factors then mere absolute rarity of skill and even amount of work it requires to get to that level of skill.

 

[Stevicus]

I think what you describe is only one part of the equation. Another part is also supply and demand of the services / products the company you work for has to offer.
There's also the economic feasibility of actually paying the worker. There's budgeting involved there. You can have the rarest skill in the world, if your skill is not in demand - or if there are alternatives that aren't rare - then you will not be earning a premium.

I like to compare this with professional athletes as an analogy.

Take soccer players vs tennis players. Both relatively popular sports.
But only the top 5 of ATP ranked players will earn what easily the top 1000 of soccer players earn.
As a tennis pro, you will be rather lucky if you manage to break even if you are only ranked top 300. If you're lower then that, chances are enormous that you will not be able to make a decent living playing tennis.

Meanwhile, a soccer player playing in 2nd or 3rd division in a "soccer country" will still be earning 500k a year easily.

At the same time, I can guarantee you that being a tennis pro (of any level) requires a LOT more dedication and work then a soccer pro at even the highest levels.

Yes, this makes sense. It largely comes down to popularity, viewership, ticket sales, promotions, etc. It may be a matter of skill - or sometimes it can be a matter of showmanship. Ultimately, athletes are entertainers more than anything else. But at least, their value can be easily discerned, since what they do is public and easily measurable. Sports celebrities might also have a set of stats, such as batting average, rushing yards, or whatever may apply to their sport. Same with entertainers like Taylor Swift. They can measure her music sales, the number of people streaming her videos, concert attendance - all measurable and easily presentable figures which most people can understand. However, with other occupations, measuring their skill level or actual "value" may be more nebulous.

Or even with awards, such as the Grammy Awards or the Heisman Trophy. These are merits which are decided subjectively (and often whimsically) by a select group of people. They don't use statistics or any real objective measurement; it's just what they feel. (The fact that "Winchester Cathedral" won a Grammy in 1967 kind of proves just how flawed such a whimsical and subjective evaluation system actually is, and it might give a clue as to why CEO salaries are so lopsidedly absurd.)

Off course, sports a species of their own as "professions", I realize that. But it makes for a nice analogy. The same is true in business to a great extent.
You can be extremely skilled, your skill can be extremely rare... but it will eventually come down to in how high demand your skill is.

Yes, there are a LOT more business consultants then there are rocket scientists.
But there are MILLIONS of businesses that require business consultants, while there is only a handful of companies that require rocket scientists.
Rockets scientists are most certainly outnumbered in absolute numbers. But are they also that outnumbered when it comes to actual available jobs?

Rarity of skillset isn't really measured in absolute numbers. It's measured in terms of "how many individuals vs how many available jobs".

Back when I started in IT, it was the number 1 choice of students in college and university. My school delivered double the amount of programmers to the job market every year compared to the amount of business consultants, marketeers, etc. But in the job market there were a LOT more vacant jobs in IT then there were in those other sectors. So even though programmers outnumbered all others in absolute numbers, they were "rarer" on the job market because even in those huge numbers, there still weren't enough of them to fill all available jobs.

So it needs to be put into perspective. There's a lot more factors then mere absolute rarity of skill and even amount of work it requires to get to that level of skill.

Not sure about IT, as I've encountered a number of people in that field who have expressed difficulties in finding a good job in their field. In a way, it might be comparable to sports, since at least the average user can tell the difference between a program which operates smoothly and efficiently versus one that's klunky and glitchy. Or, one might be able to discern which search engines give them more productive results. Even if people don't know about algorithms or what goes on under the hood, they still can tell what works better than others, which would govern their choice as to which service to use. A typical end user might be able to tell the difference between the "major leaguers" who design user-friendly, smooth-running programs versus the "bush leaguers" who offer a sub-standard product. Just as in sports, even if one doesn't know what goes on behind the scenes, the fans can easily tell who hits a home run and who strikes out.

The key thing is that their perceived value is visible, measurable, and can be easily justified using tangible criteria which can be discerned by the end user. In other professions, it may not be all that easy to tell.

For example, an all-star might be a great athlete and seen to be such, but does that reflect on the coach or the owner of the team? Does the coach warrant a salary 200 times higher than the all-star athlete, merely because he or she is in a higher-ranking position and thus credited with the skills and talents of his/her players? Can one show a direct causal, visible link between the two?

With other professions, it can be a bit more nebulous. Like with lawyers. If I see that someone is legally allowed to practice law, then it's assumed that they must have gone to law school, passed the bar exam, and were deemed "qualified" to work in that profession. It's often similar in other professions, like doctor, plumber, electrician, mechanic, etc. They have to be able to demonstrate some level of competence in that field before they're allowed to offer their services to the general public. But beyond that, the public may not be able to easily know who is a "major league" lawyer versus a "bush league" lawyer. To the public, a lawyer is a lawyer is a lawyer. As long as they can get the job done, that's all that matters. In most situations, no rare or special skill or talent is required beyond basic competency.

 

[TagliatelliMonster]

The key thing is that their perceived value is visible, measurable, and can be easily justified using tangible criteria which can be discerned by the end user. In other professions, it may not be all that easy to tell.

For example, an all-star might be a great athlete and seen to be such, but does that reflect on the coach or the owner of the team? Does the coach warrant a salary 200 times higher than the all-star athlete, merely because he or she is in a higher-ranking position and thus credited with the skills and talents of his/her players? Can one show a direct causal, visible link between the two?

I would say Yes.
There's a reason why, say, a Guardiola earns more as a coach then, say, Preudhomme. One has X trophies of La Liga, Supercups, FA cups, Premier League, Champions League... while the other has... none.

Experience and results. Coaches as well as CEO's are positions of leadership and their pay tends to go hand in hand with performance as well as scale of the organizations they are at.
In fact, many CEO's won't even get a normal salary and will in fact be paid based on performance, or their pay will be conditional upon hitting certain milestones.

These perfomance marks might indeed certainly get more technical or covert as such that the "general public" won't be able to discern them. Or will be able to discern them but they won't realize how big of a difference "seemingly small statistical difference" might actually be.
Much of the work of a coach or CEO also happens behind closed doors and many a time only the "insiders" are in a proper position to evaluate them.

However I would say that in the vast majority of cases, I think you can evaluate how "good" someone is at his job based on all kinds of metrics, many of which will indeed be contextual. Sometimes it might also be subjective, sure. For example, if you have 2 house doctors with say exactly equal medical knowledge. But one is for example far more empathic and charismatic. That one would make patients feel a lot more at ease and comfortable. He'ld be in higher demand even though medically both do just as good a job.

With other professions, it can be a bit more nebulous. Like with lawyers. If I see that someone is legally allowed to practice law, then it's assumed that they must have gone to law school, passed the bar exam, and were deemed "qualified" to work in that profession. It's often similar in other professions, like doctor, plumber, electrician, mechanic, etc. They have to be able to demonstrate some level of competence in that field before they're allowed to offer their services to the general public. But beyond that, the public may not be able to easily know who is a "major league" lawyer versus a "bush league" lawyer. To the public, a lawyer is a lawyer is a lawyer. As long as they can get the job done, that's all that matters. In most situations, no rare or special skill or talent is required beyond basic competency.

Yeah, perhaps. Especially when they are just starting out. However after a few years, they will have build a reputation. Then customer satisfaction and previous successes (and failures) will come into play.

For example, I just had groin surgery 2 weeks ago. I didn't go to just any surgeon. I did my research. I looked at the available options. There were 3 in my immediate area who did that type of surgery. I looked into all 3 of them. Who they were, what their experience was, where and when they studied, what their currently held positions were at the hospitals they were at, how old they are, etc. Then I made a decision based on who I thought would do the best job based on that data. All 3 were obviously qualified to do it. The one I ended up picking was the one who went to the most prestigious university, who did internship at a facility specialized in sporting injuries at the groin and who is currently also the head of the surgery department at that hospital.
All were qualified, but I picked the best of them based on resumé (experience).

I'm not a medical professional. I have no access to patients of them to go ask how (dis)pleased they were with them. I by no means am in a position to evaluate their work at all. But I can still do my research and work with whatever data is available.

 

[Twilight Hue]

I wouldn't want it any other way; I'd rather have a job working for someone who's making 1000x what I make than not have a job at all.

If people knew what was in their best interest, they also wouldn't want it any other way.

The reason they get paid so much is because they have what it takes to make a company run successfully; that means it's providing useful goods and services to society, and that's a good thing, not a bad thing; it also means they're providing jobs.

Furthermore, they're using that money for goods and services for themselves & guess what that means? Yes, that's correct! That means more jobs for those who work for other companies that produce the goods and services that they're buying.

Anyone can make what they make if they can offer the talent, knowledge, skills, experience, etc. that they have to earn and deserve such a pay rate.

If someone with the skills they have doesn't get paid what they demand, then they're not going to want to put their time & effort into making any company run successfully, and that means that company won't be producing goods and services that we all need, and it won't be creating jobs for people to have.

If everyone got paid the same regardless of occupation or position, then no one would want to take a risk to invest in starting their own business or go through years of college and going into debt to pay for tuition to become physicians, dentists, nurses, engineers, research scientists, lawyers, accountants, business experts, etc., when they'd be much better off working a menial job since they can start sooner and it's not as risky, but in that case who's going to be setting up and running a business to offer anyone menial jobs?

Not only are income and wealth inequality not problems that need to be solved, it's an economic necessity in order for things to happen.

Is it necessary to be a rocket scientist to understand any of this?

One other thing to remember is it's not poor people who provide jobs. It's rich people who do.

 

[TagliatelliMonster]

One other thing to remember is it's not poor people who provide jobs. It's rich people who do.

To be honest, it's not just rich people in fact. It's entrepreneurs in general.
I am by no means rich. I'm really, really not. I'm at best upper middle class. I currently employ 4 people. 3 of them earn more money then I do.

My business is in steady growth at a rate of about 15 to 30% year over year.
Once the budget allows, chances are big we'll hire a 5th person. That person will likely also earn more then me.
We will continue to hire until we get to a point where we can spread the work such that we (me and my partners) no longer have to put in 60 to 80 hour weeks. And the business will keep on growing. The business model is based recurring income from maintenance contracts, so every new customer is growth of recurring revenue.

At some point, the revenue will outgrow the costs. That's when our salaries will start rising in parallel with rising revenue.
That's when we will start to earn real money. We'll do that for a couple of years and then cash out by selling a healthy profitable company.
Maybe then we will be "rich", I don't know. We'll see if we can keep it going for another 10 years to achieve that.

If we succeed, it will have been a 15-20 year journey of hard work, sweat, blood and tears and very medium pay which will then pay off in a big pay-out.

So to people who scream "blood and murder" to rich entrepreneurs who all have gone through such a period to achieve success and who burned through their cash reserves to accomplish such wealth.... To them I say "f u... you have no idea".

 

[anotherneil]

No, I think this topic would be more in the realm of political science. That's part of the problem in discussions like this, since a lot of people approach economics as if it's a hard science, while it is actually a social science.

I suppose the perceived value of a person's vocation might be a factor in determining their actual salary, in addition to how rare their abilities might be. For example, a rocket scientist would have to have years of education and training to become qualified for such a position - something that only a few people might be willing or able to do. Thus, a high salary for a rocket scientist would make sense.

This is especially true if there are actual shortages of qualified personnel in various jobs. Where there are shortages in personnel, the principle of supply and demand would dictate that the perceived value of those occupations would increase. There are, indeed, reported shortages in numerous areas, such as healthcare and various skilled occupations. If there aren't enough skilled plumbers to go around, then one might have to pay more to hire a plumber.

On the other hand, those with degrees in business administration and accounting seem rather commonplace in comparison to rocket scientists. There are even people who run businesses even without having an advanced college degree.

And there doesn't appear to be any shortage of people applying to become CEOs. There are lots of people fighting tooth and nail to get up the corporate ladder, so it would seem that the fact that they're easily replaceable should reduce their perceived value.

Of course, no one is arguing that everyone should get the same compensation regardless of occupation or position, but I'd like to see the mathematical model which can logically define what each profession and job category is "worth." If economics was the hard science that so many imply it is, then it should be no problem to do this. Trouble is, capitalists and other conservative economists refuse to admit that economics is a social science, and more in the realm of philosophy, politics, and history - not physics or mathematics.

I don't know what "hard science" is or what that means, but I do know that academically, economics is categorized as a social science. I've taken several economics courses in college (micro, macro, and "money and banking"), as well as a course called "engineering economics" taught as an engineering course, by an engineering professor, for engineering students. From the sound of it, it doesn't seem to me that a "hard science" is mutually exclusive from a social science.

A social science is simply a science that pertains to human behavior involvement, such as psychology, social and cultural geography, (human) history, political science, etc. It's to distinguish it from natural sciences that (can) exist regardless of human existence (physics, chemistry, astronomy, biology, geology, etc.).

Economics is physics and mathematics; it's what distinguishes a practicing engineer from a practicing scientist (an engineer's job is to do the most with the least (that's what optimization & efficiency are about), which is essentially about mainly or predominantly getting the cost as low as possible for that widget (whereas a scientist's job is practically to beg for the billions of dollars it costs to build that fancy new particle collider).

The only mathematical distinction between economics and physics (other than the human involvement stuff) is that economics uses a dollar sign (or whatever denomination) as part of their calculations. If you remove it, you have mass or energy, and if you're talking about something like a pay rate, you're talking about power (pay rate, or something in units of Joules per second in physics).

The word "work" is literally used to describe the action a person does when they're doing a job, and it's a word that has a specific meaning in physics; depending on the system, it's calculated as energy transfer as a product of force x displacement x angle between the force & displacement direction of an object (linear mechanical), torque x angular displacement (rotational mechanical), isobaric: pressure x change in volume of a gas, heat added to a system - change in internal energy aka 1st law of thermodynamics, electrical: charge x potential difference, gravity: mass x g x height, etc. The bulk of manual labor work done by humans is the mechanical type of systems. They all have the same SI units as energy: J (Joules).

You also mentioned political science & I think I can agree that it also plays a role; in a nutshell, political science is about the use of force on society (as in who, what when, where, how, and why to apply it). Force is also a word that has a specific meaning in physics and is Newton's 2nd law of motion: F=ma (force = mass x acceleration). In the political science sense or context, it's about imposing human restrictions on work (e.g. the work involved in breaking into a shop or car to steal things).

I know there's more to work than manual labor, but the same type of principles apply to white collar jobs.

The operation of the economy can be analyzed and designed, just like any other engineering system, for optimization and efficiency, and that's what's happening when an employer is making a decision about who to hire.

 

[Stevicus]

I would say Yes.
There's a reason why, say, a Guardiola earns more as a coach then, say, Preudhomme. One has X trophies of La Liga, Supercups, FA cups, Premier League, Champions League... while the other has... none.

I'm not familiar with these teams, although players' salaries seem to be guided by their individual stats. Very often, individual players acquire their skills while growing up, working out, and training in their particular sport. They might already have those skills and be all-star players before they even met their current coach, so it wouldn't seem appropriate to give all the credit to the coach for an individual player's skills and achievements.

Experience and results. Coaches as well as CEO's are positions of leadership and their pay tends to go hand in hand with performance as well as scale of the organizations they are at.
In fact, many CEO's won't even get a normal salary and will in fact be paid based on performance, or their pay will be conditional upon hitting certain milestones.

These perfomance marks might indeed certainly get more technical or covert as such that the "general public" won't be able to discern them. Or will be able to discern them but they won't realize how big of a difference "seemingly small statistical difference" might actually be.

Much of the work of a coach or CEO also happens behind closed doors and many a time only the "insiders" are in a proper position to evaluate them.

That's where it can become rather opaque and nebulous. It reminds me of the quote "A judge is a law student who marks his own examination papers." If a group friends in a good old boys' network sit around and talk about how great they are and how much they're worth, one is sure to find some rather inflated figures.

Sometimes, the quality of a CEO's work may not be noticeable to the general public until much later, such as when a company has to face layoffs, closures, and other indications that the company management may not be performing to a satisfactory degree.

It's interesting that, when a company does well, all the credit goes to the supposed talents, skills, and hard work of the CEO, but when a company does poorly, they blame everyone else except the person in charge. They'll blame "the economy" or they'll say "we can't find workers" or "minimum wage hikes are killing our business."
Or they might blame government regulations, taxes, or any number of other factors outside their control to suggest "it's not their fault" for a business doing poorly. They'll blame their "lazy employees" who are expected to give maximum work for minimum wage.

In sports, it seems just the opposite, where if a team does poorly, the coach is usually blamed (even if he/she does have lousy players).

However I would say that in the vast majority of cases, I think you can evaluate how "good" someone is at his job based on all kinds of metrics, many of which will indeed be contextual. Sometimes it might also be subjective, sure. For example, if you have 2 house doctors with say exactly equal medical knowledge. But one is for example far more empathic and charismatic. That one would make patients feel a lot more at ease and comfortable. He'ld be in higher demand even though medically both do just as good a job.

Perhaps, but would that be reflected in their salaries? I think most of it is highly subjective, actually. I think it's faulty to assume that a higher salary is an indicator of individual skills and talents. I was thinking about this when I saw something about Ted Nugent making some critical comments about Taylor Swift, and Swift fans fired back and cited the fact that Ted Nugent's net worth was $10 million, compared with Taylor Swift's net worth which exceeds $1 billion. As if to imply that Swift is more talented based on that measure alone.

It is what it is, but any suggestion that there's some kind of rational basis or practical logic behind it just doesn't hold any water. It also calls into question common perceptions people have when they say it's "strictly business" and "not personal."

Yeah, perhaps. Especially when they are just starting out. However after a few years, they will have build a reputation. Then customer satisfaction and previous successes (and failures) will come into play.

For example, I just had groin surgery 2 weeks ago. I didn't go to just any surgeon. I did my research. I looked at the available options. There were 3 in my immediate area who did that type of surgery. I looked into all 3 of them. Who they were, what their experience was, where and when they studied, what their currently held positions were at the hospitals they were at, how old they are, etc. Then I made a decision based on who I thought would do the best job based on that data. All 3 were obviously qualified to do it. The one I ended up picking was the one who went to the most prestigious university, who did internship at a facility specialized in sporting injuries at the groin and who is currently also the head of the surgery department at that hospital.

All were qualified, but I picked the best of them based on resumé (experience).

I'm not a medical professional. I have no access to patients of them to go ask how (dis)pleased they were with them. I by no means am in a position to evaluate their work at all. But I can still do my research and work with whatever data is available.

Yes, it's necessary to do some checking on someone's credentials, reputation, and reviews to be able to make an informed choice. Sometimes, it's not all that easy to find all the information one might want. On the other hand, a lot of it might also depend on what one needs to get done and whether it's a routine, low-risk procedure or something more unique with greater risk.