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survivorinohio
Over the last 30 years, CEO pay grew 127 times faster than worker pay
November 17, 2012 at 11:21 PM

I know we are talking a lot about hostess but this article states that CEO pay has increased 127 times that of labor.  127 times.

Thats wrong.


Union Claims Hostess Executives Received Raises In Advance Of Bankruptcy (CORRECTION)

Posted: Updated: 11/17/2012 10:01 am EST

CORRECTION: An earlier version of as well as an earlier headline of this post incorrectly stated that Greg Rayburn received a 300 percent raise as CEO of Hostess as the company approached bankruptcy. Rayburn wasn't CEO of Hostess until after the company filed for bankruptcy. The post also incorrectly stated that he was paid a salary of up to $2,550,000 per year. His salary when he joined the company was $100,000 per month, according to a company spokesman.

Hostess could have ensured the Twinkie's survival simply by paying the executives less, one of the unions organizing company workers alleges.

Of course, to hear the company tell it, the maker of Wonder Bread and Twinkies simply can’t survive ongoing worker strikes at its plants. The company claims its hand was forced when it only came to an agreement with one of its two unions after several months in negotiations.

The union says there’s another way the Twinkie-maker could have avoided liquidating and laying off all of its 18,500 workers: by paying the executives less money.

Hostess’ creditors accused the company in April of manipulating executive salaries with the aim of getting around bankruptcy compensation rules, the Wall Street Journal reported at the time. In response, Rayburn announced he would cut his pay and that of other executives to $1 until Dec. 31 or whenever Hostess came out of bankruptcy.

That was after Hostess had already awarded the company's top four executives raises of between 75 and 80 percent, even though the company had already hired restructuring lawyers, according to the WSJ.

The situation isn't specific to Hostess. Over the last 30 years, CEO pay grew 127 times faster than worker pay, according to a July report.

Replies

  • meriana
    by meriana
    November 18, 2012 at 11:11 AM


    Quoting Sisteract:

    Our nurse manager just shared an interesting story.

    Our facility just hired a financial guru to find waste. This man was in a meeting with a group of sub-speciality physicians and some nursing dept heads, when one of the physicians went off on this guru re financial compensation at the top, specifically calling out the CEO's compensation. My manager said that she had never seen either man so angry...evidently they were really going at it.

    Damn those lazy physicians...they need to get better skills, more educated and work harder.

    Greed contributes to the fall of great nations.

    Yep and also the perception of the general public regarding greed. These days those at the top (who are among the greediest of the greedy) are seen as receiving only what they are rightfully due while the worker at the bottom is labeled greedy because he doesn't want, nor can he afford, a pay cut.

  • Sisteract
    November 18, 2012 at 11:22 AM

    Yes, indeed.

    Quoting survivorinohio:


    Quoting Sisteract:

    Our nurse manager just shared an interesting story.

    Our facility just hired a financial guru to find waste. This man was in a meeting with a group of sub-speciality physicians and some nursing dept heads, when one of the physicians went off on this guru re financial compensation at the top, specifically calling out the CEO's compensation. My manager said that she had never seen either man so angry...evidently they were really going at it.

    Damn those lazy physicians...they need to get better skills, more educated and work harder.

    Greed contributes to the fall of great nations.

    And we are in a world where Drs and nurses are merely producers for the lining of someone elses pocket not unlike assembly line laborers


  • Sisteract
    November 18, 2012 at 11:24 AM

    And we are in a world where Drs and nurses are merely producers for the lining of someone elses pocket not unlike assembly line laborers.


    I told my husband about 4 years ago that I am sure my CEO has no idea what we, the nurses working in the Nicu, do all day long. We could be washing dogs or baking Twinkies for all he knows.

  • AdrianneHill
    November 18, 2012 at 11:25 AM
    So who deserves the better pay again?

    Only people with the time and money to go to college?
    Or is it that all pink and blue collar jobs deserve to pull in very low wages so they should only be done by part time students or something? Factory work doesn't mean it is unskilled but you don't need to know that, this way works best for everyone, I'm sure.


    Quoting illinoismommy83:

    If you want better pay, stop being a laborer. I lack sympathy that factory workers who pull down on a handle for a living don't make very much.

  • stringtheory
    November 18, 2012 at 11:32 AM

    http://www.bls.gov/opub/ted/2011/ted_20110224.htm 

    The compensation-productivity gap

    FEBRUARY 24, 2011

    The gap between real hourly compensation and labor productivity is a "wage gap" that indicates whether workers' compensation is keeping up with productivity. Since the 1970s, growth in inflation-adjusted, or real, hourly compensation—a measure of workers' purchasing power—has lagged behind labor productivity growth.

    Productivity growth and real hourly compensation growth, nonfarm business sector, selected periods, 1947–2009
    [Chart data]

    Growth of productivity and real hourly compensation in the nonfarm business sector (which accounts for three-fourths of output and employment in the total U.S. economy) was robust until 1973, at which time growth slowed in both measures. During the 1947–73 period, the annual change in productivity averaged 2.8 percent, while real hourly compensation growth averaged 2.6 percent. Over the 1973–79 period, the averages were 1.1 and 0.9 percent, respectively.

    Real hourly compensation growth failed to keep pace with accelerating productivity growth over the past three decades, and the gap between productivity growth and compensation growth widened. Over the 2000–09 period, growth in productivity averaged 2.5 percent; growth in real compensation averaged 1.1 percent over the same period.

    These earnings data are from the Productivity and Costs program. To learn more, see "The compensation-productivity gap: a visual essay" (PDF) in the January 2011 issue of the Monthly Labor Review.

  • shimamab
    November 18, 2012 at 11:39 AM
    :( but its all the fault of the unions, right?!?!
  • stringtheory
    November 18, 2012 at 11:43 AM

    Please, if you have time, click on and read the PDF that my last post's article has. There are more charts and graphs like this one:

    5. Labor share of nonfarm business sector output, first quarter 1947–third quarter 2010

    NOTE: The shaded bars denote National Bureau of Economic Research (NBER)-designated recessions.

    1947 1951 1955 1959 1963 1967 1971 1975 1979 1983  1987 1991 1995 1999 2003 2007 2010

    Percent Percent

    • Labor share is the portion of output that employers spend on labor costs (wages, salaries, and benefits) 

    valued in each year’s prices. Nonlabor share—the remaining portion of output—includes returns to capital, 

    such as profits, net interest, depreciation, and indirect taxes.

    • Labor share averaged 64.3 percent from 1947 to 2000. Labor share has declined over the past decade, falling 

    to its lowest point in the third quarter of 2010, 57.8 percent. The change in labor share from one period to 

    the next has become a major factor contributing to the compensation–productivity gap in the nonfarm business sector.

    http://www.bls.gov/opub/mlr/2011/01/art3full.pdf

    Please note, the graph is imported from a different website though that website credits BLS for the graph. I couldn't import the above graph from the PDF, so I found it elsewhere.

  • nysa76
    by nysa76
    November 18, 2012 at 11:48 AM

    I just have to say thank you for doing what you do.  I had 2 babies in the NICU.  Most of the nurses there were amazing.

    Quoting Sisteract:

    And we are in a world where Drs and nurses are merely producers for the lining of someone elses pocket not unlike assembly line laborers.


    I told my husband about 4 years ago that I am sure my CEO has no idea what we, the nurses working in the Nicu, do all day long. We could be washing dogs or baking Twinkies for all he knows.


  • meriana
    by meriana
    November 18, 2012 at 11:55 AM

    But it's all the fault of the Unions because those Union workers are all unskilled, lazy people who want and expect to be paid to sit on their butts. People who believe this, and apparently there are many, really need to wake up and stop accepting the Corporate CEO's line's of bs as having any actual relation to reality.

  • im23vaughn
    November 18, 2012 at 11:58 AM
    I don't think anyone has a problem with CEO making more money than factory workers. the issue comes in when 30 years ago for example a CEO made 300,000 dollars year on average and now for the example is, making 5 million a year in average. While the average middle class family was making 50k a year 30 years ago & is making 70k. Then when that CEO wants to save 700k he fires 10 employees instead of reducing his pay to 4.3 million instead. People who perform skilled jobs deserve fair compensation..when companies are recording record profits, increasing executive pay 100% & giving out million dollar bonuses they can afford to pay their employees enough $$ so that worker doesn't work 40 plus hours a week & still qualify for welfare.

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