Well, I wasn't going to respond, but I think that CEO's pay being so large is a part of the problem. Outsource to save money, and then increase CEO pay at astonishing rates. Corporate greed is what is making IT jobs scarce here in the US, as well as depressing all lower level salaries for employees
Please see the article from the Motley Fool from ten years ago, and extrapolate how much worse it has become since then:
http://www.fool.com/Rogue/1997/Rogue970905.htm
Here's an excerpt:
Even a quick glance at the bare IRS stats shows that CEOs have done remarkably well for themselves during a period when the average weekly wage for a non-supervisory laborer -- which is to say, 80% of all U.S. workers -- actually declined slightly, after adjusting for inflation and added benefits such as pensions and health insurance. A close look at more recent but less comprehensive data confirm that the discrepancy, if anything, is getting worse. In 1996, for example, corporate profits rose 11%, yet factory workers saw wages grow by just 3%, and white-collar workers experienced a 3.2% boost in salaries. These advances barely kept pace with inflation. Indeed, considering productivity gains, these increases were so modest that they help explain why the American economy is seeing so little real inflationary pressure even after six years of expansion.
CEO pay, however, is a different story. While salaries increased far more modestly than in the past, salaries generally account for a smaller share of CEO compensation today than ever before. One analysis of 56 large U.S. companies, for example, showed that salary made up just 22% of a CEO's total compensation in 1996, versus 27% in 1995. As Business Week reported in April, the S&P 500 companies as a whole paid out performance bonuses that significantly sweetened executive pay packages, boosting cash compensation last year by 39% to $2.3 million. The real payoff for most chief executives, though, came from stock options, which accounted for 45% of total compensation versus 40% in 1995, according to some reports. Including all forms of compensation, the average CEO's pay soared 54% last year, to $5.78 million. Today, the average CEO makes about 209 times what the fulltime factory employee does. Depending upon what stats you use, that ratio amounts to an
8- to 10-fold expansion in executive pay relative to the rest of the workforce in just 25 years.
Robert Monks, a principal of Lens Inc. and a trailblazing reformer of corporate governance practices, recently told the Times that executives manage to steal away with such lucrative pay packages "only because chief executives are paying themselves. They have all this diaphanous language about performance and all these committee reports on how pay was determined, but the simple truth is that executives are setting their own pay."
If you are a shareholder or an employee of a public company, a CEO who pays himself more than he's worth is ultimately taking money out of your pocket. Given that options packages already granted are expected to dilute corporate earnings in some sectors by as much as 29%, the chances are good you're being robbed blind.
Here's some more recent statistics:
http://www.accountingweb.com/cgi-bin/item.cgi?id=102667
and an excerpt:
The Wade/OʼReilly/Pollock research shows that CEO overpayment has higher realized costs than previously shown. Based on their research models, the CEO overpayment cascade is shown below. When a CEO was overpaid 64 percent:
Level 2 employees, such as COOs and CFOs, were overpaid by 26 percent and,
Level 5 employees, such as division general managers, were overpaid by 12 percent,
Such systematic overpayment impacts overall organizational performance and shareholder value.
A study of 229 firms that laid off employees at least once between 1993 and 1999 found that the CEOs of layoff firms received 19.6 percent more stock-based compensation than CEOs of non-layoff firms. That figure increased to 42.6 percent one year following layoffs and rose to 44.9 percent two years after layoffs. After two years, the figure increased dramatically to 77.4 percent.
Cash-based compensation took an inverse direction to stock-based compensation for the same period. CEOs of layoff firms received 6.5 percent less cash compensation than those CEOs of non-layoff firms. CEO salaries and bonuses were 10.4 percent lower during layoff years.
----- Original Message ----
From: Joe Pluta <joepluta@xxxxxxxxxxxxxxxxx>
To: midrange-jobs@xxxxxxxxxxxx
Sent: Friday, November 30, 2007 11:06:37 AM
Subject: [MIDRANGE-JOBS] Final Comments on Visas and the Economy
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From: Shadrach Scott
Joe I hope you are enjoying the debate ..... I am enjoying it, and I
have read and looked at every fact sent. I especially enjoy when people
like Karl are willing to share real life. You are correct numbers are
cold and there is a human aspect to this debate and there are real
people being affected by it. Obviously there is a segment out there that
is feeling real pain or at least minor discomfort.
I always find it interesting to listen to people who happily listen to what
they are told despite the reality of the world around them. You never
addressed my earlier point that no family can live in the OC for $60,000 a
year. That's par for the course: ignore those ugly facts.
Joe rather than the protectionist society you keep advocating for we
need the competitive society Wadha talks about.
I'm all for a competitive society, just one with a fair playing ground. I
can't compete with someone whose cost of living is a third (or a fifth or a
tenth) of mine. That's just common sense.
As those economies grow so will
ours and instead of the collapse your predict the world will see
prosperity like it never has before.
The correct way for economies to grow is for them to become self-sustaining
through export of products and services, not by taking jobs from other
markets. There's a subtle distinction there, but one you need to
understand. Because when you take other jobs, you depress the wages of the
people buying your services, and thus reduce your own market.
Instead, the emerging economies need to do the basics: build their
infrastructures, reduce their populations to a supportable level, provide
the appropriate basic services, that sort of thing.
My final point is the technology field is very competitive, you can
never assume anything about your job or the product you sell. If you
employer is not providing ongoing training then you need to provide it
for yourself. The numbers tell us that real wages are growing so if your
wage is shrinking someone else's is growing and by your own admission
the h-1b wages are not the ones causing real wage growth.
The numbers say no such thing. The numbers say real wages are stagnant,
benefits are dropping and bonuses are dwindling.
I'm done, not because it has not been fun but I don't think Joe's blood
pressure can take much more.
My blood pressure is fine. I always like to see the type of person who
listens to the big business mantra.
Joe
midrange.com
