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AvatarComments by Oscar Gordon

On “Rebuilding from Ashes

This is the danger of calling a Constitutional Convention, that 1/3rd will get a voice and a vote and are guaranteed to put something in there that will be bad.

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So if someone were to sue an agency regarding their adherence to a provision that had sunsetted...?

On “The Politics of Survival: Putting Yourself in a Box

This is starting to feel like a bit of a Motte and Bailey between business and economic arguments. I'm saying that the economic argument is insufficient to explain things.

Not that it explains nothing. For example, there is this. Tight labor markets have workers getting pay bumps, so that's awesome. But it's also very recent.

More to my point is this.

The bottom line is this: lagging wages in the U.S. is not an economic issue, it’s really about management. The spirit is there, but the actions are not.

In short, management is spending money returning value to shareholders, (or to themselves) rather than to employees. Now there are cases where companies regularly award stock to employees and thus those employees get some of that value back, but not every company hands out stock awards (or the ones that do hand out awards hand out very small awards - getting 100 shares is great if you work for Amazon, but not much if you work for GM).

Part of this is a belief in sticky wages. Some folks swear by that theory, but many just see it as an excuse to avoid dealing with pay, because our pay system is out of date.

Why? The way we pay people is based on legacy models. We only review wages annually; we are afraid to overpay high performers; we are afraid to explain to people why they are paid what they are.

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Why is it so hard to fix pay practices? Not only are CFOs holding companies back, but the HR department is partly in the way. Companies are concerned about pay equality, salary bands, carefully staying within benchmarks, and not providing a holistic view of pay. People want to be paid more frequently, they want a wider range of benefits, and they want programs that meet their particular needs, not just lists of programs they never plan to use.

Regarding your point about compensation as benefits, note that last line. Having the company move from a Cadillac health plan to a gold plated Cadillac health plan only really adds to my compensation if I can't make use of it. Or if they include the price of a gym membership to a gym I'll never use, etc. Reporting the overall compensation package as including expensive items A-E that I'll never use, or use very rarely, isn't something that actually increases my compensation, but it does allow them to report that it does, without shelling out the actual cash to all employees (what were you saying about statistical illusions?).

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If the bulk of your management sees their overall compensation grow faster than yours, then they have the funding to pay you more. If there is something stopping them from paying you more, then it's a policy issue, not an economic one.

So your first question is, if your management hierarchy is getting salary growth and/or bonuses, why can't they pay you more?

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If aggregate productivity was the primary driver, we would not be seeing such wage growth at the top.

https://www.brookings.edu/policy2020/votervital/whose-wages-are-rising-and-why/

I get the whole economics in theory, that productivity drives wages, etc. But, as Chip said, economics involves a lot of human behavior, and that behavior does not map nicely to theory. Lets be honest here, if aggregate productivity in the US is in such decline, then we should be seeing management wages stagnating, because ultimately such things are the responsibility of management, yet their wages continue to grow faster than anywhere else.

And this is the crux, that management is accruing what growth is available to themselves wherever possible.

On “Impeachment: A Briar Patch With No Rabbits

That, and locking the flight deck door.

But yeah, dealing with an angry and frightened mob of passengers in cramped quarters is no small thing. I believe even OBL knew that he'd only get to use that tactic once.

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Our political leaders are never as clever as they think they are.

One of the more significant failings of humans is to assume that the ability to win a popularity contest maps directly to the wisdom/intelligence/ability to do anything else. And it's not just the political class that has this failing.

On “President Biden’s Inauguration: Day One for Forty Six

Related:
https://www.cnn.com/2021/01/21/politics/what-matters-january-21/index.html

On “First, Do No Fraud: The Unworthy Pardoning of John Davis

Agreed, it is on the medical systems to insist upon a set of standards, and I just don't see them doing that. And if the problem is senior management not having the attention to give to it, then I have to wonder if senior management is worth the cost*?

*Note that I am off the opinion that 98% of senior management are not worth the cost, in that most of then do not actually add anywhere close to the value they extract from an organization.

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Probably seemed like a good idea at the time, too. Now, not so much...

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Another of my favorite dead horses - Why TF have we allowed to POTUS to become so damn important?

On “First, Do No Fraud: The Unworthy Pardoning of John Davis

It's always interesting to me how we can somehow manage to have universal standards for X, but for Y? - Oh HELL NO!

On “President Biden’s Inauguration: Day One for Forty Six

No, I'm betting Biden has plenty of massive ambitions. When is lacking is a significant demographic projecting all their ambitions onto Biden.

Like, no Hope & Change, no MAGA, just a "Please, be quiet and govern reasonably".

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The one appeal Joe has for me (and we all know I loathe all politicians) is that no one, right or left, is calling him some kind of messiah.

He's just Joe.

On “The Politics of Survival: Putting Yourself in a Box

And that one team has not seen their pay increase 7 fold. Probably hasn't even doubled.

IMHO, that's because wages are not linked to productivity, but to perceived effort.

Except for executives. If the teams under an executive become more productive, the executive gets a bonus or pay bump, but the people who actually did the work to increase productivity get whatever the corporation is offering that year for increases.

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Exactly. I see the stuff done with just MatLab and I get blown away, and I know what our flagship software can do.

My larger point, however, is that I think productivity keeps getting it's metric re-zeroed whenever it's convenient to avoid ensuring wages keep pace.

On “The Politics of Survival: Putting Yourself in a Box

Here is what DM said:

As of 2013, Nine countries with no minimum wage are: Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.

These countries are often held up by the Left as social models we should copy.

It is not “maddeningly clear” that business won’t pay workers “what they are worth”. The issue is more that politicians and people who don’t create jobs need to virtue signal by meddling in the economy.

The issue I was driving at is that those examples are not the examples I would choose, precisely because there are wage controls in place in all of them. Those wage controls are not in the form of a "Minimum Wage" like we have in the US, but through expansive collective bargaining agreements, etc.

Now, as to your point about productivity, that is, by and large, a crap argument. Automation is driving productivity to ever greater heights. I should know, it is LITERALLY my job to help people automate things. I write software specifically to increase engineering productivity by massive amounts (the tool I am currently wrapping up can do in less than an hour the tasks which would take an engineer weeks to do by hand, and I eliminate a lot of the simple errors that creep into such work). When I worked at the Lazy B, I automated a number of my regular tasks, making them go many times faster and improving accuracy. My productivity jumped, yet my pay did not.

So the whole productivity is lagging argument... how, exactly is it lagging? By what metric? Because everywhere I look, it's expanding by leaps and bounds.

On “Mike Pence and One Cheer For Doing the Right Thing

And yet somehow, I doubt he'll have a hard time paying off his mortgages or putting food on the table.

On “First, Do No Fraud: The Unworthy Pardoning of John Davis

Health care fraud investigators have begun to employ data mining techniques to identify anomalies early on, such as providers with an abnormally high utilization of a particular service. It is not always fraud, but it can be a place to start looking more closely.

This is the kind of thing that should be employed anywhere the government is handing out money for services rendered, be it healthcare, or defense, or what have you. Obviously the specifics of the tools would vary, but I would hope federal and state governments leverage such tools, and have people who continuously develop such tools.

On “President Biden’s Inauguration: Day One for Forty Six

The WA GOP seems to be all in for Trump and has censured the two GOP House members who voted to impeach. I mean, this is WA, the GOP is on life support here, and they are still raging about all those stupid anti-smoking activists will demanding another cigarette.

On “The Politics of Survival: Putting Yourself in a Box

Oh, I get it alright, it's that DM had a conflict he needed to square up, and I was trying to get him to do that. Rufus finally provided the answer I was looking for.

As for the link DM posted, it very much says that the story depends on what you are looking at and when and how, so don't be quite so dismissive. From my personal experience, I've had two employers in the past 20 years pushing profits into growth/expansion, share buybacks, shareholder service, and executive wage growth, but very little (< 3%/yr) getting sent to low level management and below. So yeah, it depends.