Fair or unfair?
 

I came across this topic reading from a discussion board of an economic class.
The average CEO makes roughly 400 times what the average worker currently makes. Do you think that this is justifiable? and why?

The replies on the discussion boards are pretty interesting, so i thought about bringing it here.

Personally, i think it is perfectly fair a CEO makes 400 times more than an average worker? Economically speaking, there are more demand on the seat of a CEO tha supply. Meaning, there are only a few people capable of being CEOs while there are numberous demands for this job. So supply and demand! Secondly, the job of a CEO isn't easy, there are tons of pressure, not many are capable and not many are really willing to put up with responsibility. It takes years of trainings and personal leadership skills, so back to my first point of demand and supply. After all, we are a capitalist country, i don't see why it's unfair for someone to gain much than others since they are capable of making greater impacts. Just my thoughts.

What do you think?

I'm not too sure on this one. The CEO has much more responsibility than the average worker, but I'm not sure whether or not 400 time greater is legit.

To me, that's a stupid question.

The CEO worked hard to get that far. The other people fail if they think that's unfair.

But no offense. XDDD

Exactly my thoughts. But i think it's secretly a capitalist vs communist debate question in disguise xD

But there are quite a few people who think it is unfair. And some got quite good reasons to back their arguments as well.

Let's see, average person makes 2000 a month. 2000 x 400 = 800,000 a month. Not too far stretched i think, consider there are only a few CEOs in this world. (compare to world population of course xD)

A part of a capitalistic society is the hierarchy of jobs. And this is one of them. a CEO with less tiring work than an ordinary worker gets paid more. Of course, the CEO is more educated, with exemplary leadership skills and the likes but these requirements are created by our society so as to have a basis on competition in the capitalistic setting.

However, in socialistic societies. People earn according to how much job they do. Kind of like an artist here in Mene. You draw more, you earn more. Socialist societies aim for equality and the corroding of social classes.

In a capitalistic society, there is a system. You have to learn at school, gain work experience and even excel to keep up with the competition. But this system tends to leave unskilled people behind. They have no hope to live. And even if they will be given jobs it will be blue-collar or in the labor sectors.

Yeah the CEO has the hard time of his life wracking his brain with all his intelligence to lead his company. but if he needs something typed, he passes it to the secretary. If he wants something done, he passes it to lower employees. So he can practically sit back physically but then his mind must be working to organize the company and keep it intact. But pay-off is large. He can party, spend it on wine, cars and everything he needs for primary survival.

But the lowly workers also has a hard time. He works his butt off 10 hours a day or more to get a measly pay not even enough to buy his family food.

Now what's unfair?

Re: Fair or unfair?
 

We have 2 sides of the debates right now =D That's lovely xD
For once i want to see a real debate in the debate forum between all the users inputs. (usually people leave replies behind but i can't call those debates since the other side pretty much never come back)

joih, the CEO does work o.o and his/her work is the most vital job in the company. See... a normal worker works his butt off 10 hours a day but gets low pay. One, this worker's job is a job anyone can do without intensive training, so of course there are more people available and thus the lower paid. But i do see where you are coming from, the rich gets too much and the poor gets too little. But if the CEOs do not get paid handsomely, no one would even take that job. The reason people want to be CEOs is because they can have power, fame and money. It's similar to how politic works. Would it be fair then for a CEO to get just enough for living but not enough for luxury?

CoCaptain, when they earn that much by their hardworks, i think it is reasonable for them to spend it however they like, the money that is. If you were a CEOs, i believe you would not say the things you did ^^;
Now, you do realize that the rich people are the ones who are capable of big impacts on charity? Normal people are willing to give, yes, but the rich folks are the ones making differences from the money they give. By having more resources, they are capable of helping more people.

I'm sorry, but CEOs aren't always chosen based on their qualifications. Sometimes, it's a hereditary position- as in, "my dad was the chairman, now I am!" I'm not saying that they aren't qualified for the job, but that qualifications aren't the only thing that matter.

Also, money makes money. For the CEO who spent 10 years in college to learn everything, good for him! But what about that guy who is just as smart and capable, but couldn't afford to go to college and so ended up having to take the menial job?

So, no, it's not fair. Saying something is fair because you live in a capitalistic country is wrong. It's equivalent to saying treating women like dirt is okay in the Middle East because that's their culture.
And socialism > capitalism.

Couldn't afford to go to college? In the US? That's a bit far-stretch. If someone is smart and skilled enough to take up the position of a future CEo, i'm not sure "not having enough money for college" is going to be his/her excuse. Those are the people who would strive with everything they have to reach their goal. Meaning, they are the ones that work their butt off and study at the same time (but they can always borrow money from government grants if they don't already have scholarships in their name)
About your cultural comment, what exactly is right and wrong? If you were born in the Middle East, yes, it is right to treat women like dirt, but over here, it is wrong. Anyway, that's an ethical debate so i'm not going into that.

An incapable CEO isn't going to last long enough to actually make that much money in a year o.o Not the mention incapable ones can lead the company to destruction and ultimately his/her own. Is it a family thing? Even if it is, the one in charge has gotta have the ability. That seat is like the juicy meat in the middle of a food shortage.

And again, "socialism > capitalism" can really be debated in another thread. From what i see currently in this world, capitalism is the one thing working. Socialism went really wrong in some countries. I guess it looks pretty in theory but...eh, not in real life.

Here's the thing. In a capitalistic system there is a hierarchy of jobs. Everything that is happening around is vital to the system.

Of course the CEO needs education and proper training. And he needs to work hard to get to the top. but the question is. WHO USUALLY GETS TO THE TOP?

Education, training, it needs money right. So you have to have money as means for you to climb the ladder of success. So instantly, less priveleged ones are automatically out of the picture. Now is that fair?

Of course, there are people who get to the top due to their HARD WORK. but then the elites of society has a way of preserving their position. They let their daughters marry husbands from fellow elite families. Thus, they maintain their status. Same as with a business. Do you think anyone would hire a CEO just for skills? There are a lot of political factors.

In the capitalistic world there is inequality between everyone. It does not reside in the mere division of classes but in the preservation of it as well. I'm presenting realistic situations, things that are happening in real life.

The CEO has good foundations to start with. He is with an elite family or he may be in the middle class. The lower class people are therefore deemed as dumb because they don't have the means to support themselves to proper education.

What makes matters worse is that the CEO is paid more than the worker. It preserves the system assuring that future generation of families will experience the same.

Let's think out of the box here. They are not merely skilled. They are priveleged financially to achieve that skill. Course it's hard to get there. I know. But it's nothing compared to the hardships faced by the worker in everyday life and in future generations to come.

Well! The people who usually get to the top are the ones who are very clever with their schemes, plans and mind games. BUt i think i need to really research on history of CEOs in big companies before i can start talking ^^.

There are people who were born poor and still made it to the top. Oh heck, Walmart's founder was a farmer o.O. So they are not necessary out of the picture.

Hhhm, CEOs are not typically interviewed and hired....They are in line as candidates until the current one goes down, something like that
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In this world, capitalist or not, there is always inequality. (but i have my own opinion about life's equality)

Who deem the lower class as dumb? I think many great leaders and lotsa high class people do seek talents in the rough in the lower class. But i do see where you are coming from, people tend to make generalizations like that. And again, there are many cases of success from the lower class.

I've said it, i'll say it again: being poor does not make you a failure and being rich does not mean you or your children will stay that way.
Depends on the individuals here, there are CEOs who were not born privileged. How would you compare the hardships though? There are mental hardships involved in the job. They have power, they have fame and money, that does not mean their job isn't painful. Who knows, maybe if you compare the mental hardship and the physical hardship, maybe a CEO shares a lot in common with a construction worker.

But of course, you have your opinion and i have mine. This is a debate so don't get the wrong idea that i am trying to force my thoughts upon you. =]

No worries! I'm just trying to debate as well. ^_^

But I'll do tell you where I'm coming from. I'm in the Philippines. A developing country, a weak state. I am practically watching my country fall apart by the constant ruling of the elites.

I'm not saying completely. There are rare cases. But as said, they are RARE... well at least in this country.

Exactly my point. Even unskilled sons/daughters so long as they carry the family name gets to inherit the company.

I agree with that. To think that life can be completely equal is utopian. Even dreaming that the distribution of wealth will be equal is beyond my wildest dreams. But I do continue on my argument that it's not fair. Not fair because it's unequal.

Are you in the US? lower class people there comprises of mostly migrants. (blacks, mexicans, asians) Of course they are skilled for they have to be skilled to migrate to US. They can succeed there. But my point is, if this wage differential continues, poor will become poorer, rich will become richer. I don't find that fair.

Yes, maybe in your society.

Yes the hardships can be said as the same only if you haven't experienced how hard it is to work as a laborer. Kinda like a middle class child saying how hard studying is when another child is in the roads selling cigar in the streets.

Alright there, more arguments. So the discussion may continue ^_^

xD I'm living in the US. Skill really goes a long way here instead of who you are.
But i do see your point now. I didn't think beyond the US.
Nah, you don't need to be "skilled" to migrate to the USA. Everyone is accepted o.o. There are those who migrated over here and really blew their chance =.= kinda sad. And surprising, the lower class here does consist of many native American ^^; I think US is still the land of opportunities.
xD; Well. we are looking at different countries. I came from Vietnam, i could relates my country to yours but mine is communist =.=;;;;

I think in the US, if you really got the CEO seat, it's mostly based on your own power, not who you are. So i think it's fair those people are woah rich =D

Actually, no, not just anyone can move to the US. :| Why do you think there are always these 'green card lotteries' on the internet? Or, you know, the term "illegal immigrant"?

And actually, yes, some people really can't afford to go to college, even "in the US". It's only recently that going to college became a common thing [partially due to the fact that you now need more qualifications to be able to find even a 'regular' jobs]. [Read this interesting article about affording college.]

The fact of the world is, yes, whatever social class you are born to will almost always determine your future. [Of course, you do get the occasionally Bill Gates, but in that many millions of US citizens, how many "Bill Gates" do we have?] [Yet another interesting read here.] As much as we'd like for everything in life to be based just upon effort and talent, it's not true, and will probably never be true due to human nature.

[Before you start with the "being poor does not make you a failure and being rich does not mean you or your children will stay that way!" again, I'd like to say that's not what I'm saying.]

[PS. The correct answer to the cultural question is that, no, it is not alright to treat women badly because of their culture. And so it is not fair for the major discrepancies of wages in a capitalistic society/country.]

Did you know that it is a psychological fact that we perceive tall people to be more capable? I can't remember the exact statistics, but most of the CEOs of the Fortune 500 companies are tall. A weird but true fact. [More details about this can be read in Malcolm Gladwell's book Blink.] Considering that a person is more likely to be selected from a pool of otherwise equivalent candidates because they are tall does not seem fair to me at all, and that doesn't even take into consideration all the class and monetary factors. For said tall people to then earn 400 times more than their lowest paid employees makes even less sense.

Now, don't get me wrong, I don't think it is unreasonable to pay a CEO more than a factory worker. What bothers me is the ratio between the two salaries, and the fact that the factory worker can hardly make enough to live on, let alone send their kids to college. Even if the ratio were halved down to a 200:1, things would be a lot better. I'm not an economist, so I wont make any claims as to what the ratio should be, but the gap does need to close.

I mean, let's break down some numbers here. Let's say we have Worker A who earns $8 per hour, works a 40 hour week, 48 weeks a year. That would give them an annual salary of $15,360 a year. (Given inflation and the state of the economy, that's not nearly enough, especially if they have a family.) Now, if we take that and multiply it by 400, we get a CEO who is earning $6,144,000 a year. I'm sorry, but their job is not that much harder to warrant that much of a difference. A measly 20:1 ratio would give the CEO $307,200 a year, and that is more than sufficient to live on. So they can't buy a yacht. Boo hoo, cry me a river. Considering the billions of people in the world who live near or bellow the poverty line, I can't be bothered to care about whether a CEO can afford to buy his kid a new Hummer or not.

A lot of people's lives would be improved if CEO salaries came down so that worker salaries could come up. It wouldn't even take that much. A small drop in the CEO's salaries could fund the increase of a lot of other people's salaries. Considering that greed and an overwhelming sense of entitlement are among the reigning powers in the world right now though, I doubt that's going to happen.

You have a lack of logic.
It is not an empire.

In order to be chose as a CEO, the board of directors has to choose a person. The board of directors themselves are stock holders, and in order to go up, you need to have a successful business, and what the CEO does may make or break a compoany.

An example could be Apple. After Jobs got fired (even the creator can be fired from CEO), Apple started failing in every single way. When Jobs' company NeXT became huge and Apple acquired it (due to Jobs' management technique) Apple's board of directors reinstated him. Then he brought it to success.

With that example, it shows how important the CEO is.

Also, you are paid flat rate, and if you do the same work, you deserve the same pay. But people have built for many years and do as much as they can. Many CEOs work overtime, and although all pictures you see of them buying new yachts and stuff, they do have to do a lot of work.

If your company earns 50% more, you don't pay your employees 50% more, you pay them 10% more and you get the rest.

Your goal as a business is to earn money, not to give it to all your employees. It gives the incentive to attempt to be successful.

LemonWarlord: Yes, the goal of a buisness is to earn money. I wouldn't necessarily suggest that companies cut into their profits to pay their employees more, because that would cost the shareholders, and their what makes our whole system run at the moment. Rather, I would suggest that the money that is already being spent on salaries get more evenly distributed; CEO earns little less, grunt earns a little more. Even if you halve a CEO's salarie, they're still earning millions.

I somehow agree with Chexala and Gwendolyr. The thing is the system is unfair and that is our primary argument.

LemonWarlord - I do see what you're trying to point out. That businesses live in profits and they couldn't just cut out profits for wages sake. However, as Chexala pointed out, the wage of the CEO (which is enough to buy luxuries like a yacht) is too much and not fair for the lower workers of the company.

But I am somehow aware how hard that would be because lowering the salary of the CEO and increasing that of a worker will take away the "prestige" of the CEO job. But I guess to consider the situation, fair. Workers and CEOs can have a smaller ratio with the excessive money for the company's benefit rather than cutting the lower workers' wages to earn profits.

I don't mind that CEO's get paid a good amount for the kind of work they do. Business fuels economy after all, and my friend is a business major so I do understand all that encompasses the field.

What I don't like is that other jobs which call for just as much dedication and work are overlooked monitarily. For example, the profession of teaching. It's true they are paid in a nonprofit organizational basis, but the job of a teacher is just as important as any CEO. For a child to excell in life a good basis of education has to be learned. The reading level of children by the third grade makes or breaks a student for the rest of their life. At this point they will have the proper fluency for adulthood literacy or they will not. Where would CEO's be without their education?

As far as education in college is concerned. Many teachers go for masters, doctorates. The same amount of schooling CEO's are required. Classes for teachers demand just as much as classes CEO's are required to take. So why are teachers overlooked in the payment category?

The future of a society is put into the teacher's lives every day and they are forced to deal with many difficulties each day.

I'm not saying CEO's don't deserve their money, but it is not fair that other professions of equal importance are overlooked.

Wow, thank you for letting me vent! I feel much better. I've always had a few comments about this topic.