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by markvdb 1697 days ago
Let's run the numbers again for a thought experiment:

- $15600000 CEO compensation [0]

- 69600 workers [1]

- 1760 hours average per US worker per year [2]

- $20.12 hourly wage for the lowest paid John Deere employees

$0.13/hour, 0.6%, or a bit over a dollar a day increase for the lowest paid group. That would be the increase if the JD CEO would work for $1, with all his previous pay evenly distributed to all employees. Not insignificant.

Now let's have a slightly different thought experiment. What if the CEO pay is cut by 50%, and evenly distributed only to the bottom 10%? A $0.64/hour, 3.2% or $5.09/day increase. That would be a very significant number to all involved.

I'm not saying this is what should happen or not. Just saying the number is significant.

[0] https://eu.desmoinesregister.com/story/money/business/2021/1...

[1] https://www.statista.com/statistics/278010/john-deere-number...

[2] https://en.wikipedia.org/wiki/List_of_countries_by_average_a...

2 comments

To add on your point, the people I know on low pay really care about what seems like a small pay rise e.g. $20 to $20.50. This makes sense because after living expenses a worker is left with say $40 discretionary money to spend, yet a $0.50 pay rise increases the worker’s discretionary spending by 50% (for this example).

When you are financially struggling, a 10¢ raise (extra $4 for the week) can make a big difference.

One of my friends worked 40 hours and had $20 to spend on herself after her bills (which were frugal, since she didn’t earn much). Low pay sucks when you earn a discretionary $0.50 for every hour of work.

Usually the lowest paid workers make up a significant percentage, not 10%, so raising pay for only 10% of workers doesn’t make sense. Of course you can run another experiment that distributes CEO salary to the lowest 0.1% and see an even more significant raise; that doesn’t mean anything.