[unclebucknasty]

>Wasn’t that always the case?

It's a matter of degree.

CEO-to-worker comp was 20-to-1 in 1965. In 2021 it was 399-to-1. [0]

CEO comp rose 1,460% from 1978 to 2021. Worker comp rose 18.1% over that period. [0]

>Your problem is the stock market punishes companies that don’t have cash flow

The idea that the company's sole responsibility is to "maximize shareholder value" has become a bit of a meme in its elevation to the status of some codified fiduciary duty. In fact, it's derived from the musings of a single economist (albeit a pretty influential one). No surprise that was uttered in 1970, just prior to the sharp increases in compensation disparity. It could be credibly argued that this canard has been used as the "moral" pretext for measuring and rewarding CEOs and shareholders to the detriment of workers. "Yes, we're redirecting trillions from workers to executives and shareholders, but you see, that's our moral obligation as a company with a single overriding missive".

So, used here as ostensible justification for suppressing worker wages (i.e. to avoid being "punished" by the stock market), it's a bit circular.

But, ironically, your positing it as credible rationale for resisting unions underscores its pernicious effectiveness.

[0] https://www.epi.org/publication/ceo-pay-in-2021/

[orochimaaru]

I’m saying it’s probably the major driver of why unions are resisted. Shareholder value = value for hedge funds = value for 401k accounts. The perverse relationship is that union resistance and offshoring is a necessity for better security in retirement for those who can afford it. It’s not a healthy measure. We do need something better than that.

Cutting ceo pay isn’t going to do much. Irrespective of how much that is reduced you’re not going to be able to cover cost increases of all that unions demand - unless you decide to reduce shareholder value. Now, this means funds may no longer invest in your company which in turn causes a whole downward spiral in stock.

We need to cut the link between retirement funds and the stock market. If you see ironically the 401k of union employees are most likely invested in companies that bust unions.

[unclebucknasty]

>I’m saying it’s probably the major driver of why unions are resisted.

Yes, I understood your meaning. I was countering that, while the concerns about shareholder value and stock prices are often used as justification for suppressing wages or resisting unions, it's really just a circular argument. They essentially do it, reward themselves as shareholders and leadership, then justify it by claiming they had to do it because they demanded they do it.

But, there is no moral or legal obligation to put shareholder value above equitable treatment of workers, as they claim. In fact, I'd argue it's the other way around.

>Shareholder value = value for hedge funds = value for 401k accounts.

Bringing 401Ks into the equation is another bit of obfuscation which implies that their actions are lifting all boats and workers also benefit. But, in reality, it's just another form of compensation that is wildly inequtiable.

>unless you decide to reduce shareholder value...this means funds may no longer invest in your company

This is the crux of it. I don't think it's a foregone conclusion that it would lead to divestiture, but that shouldn't be avoided at the expense of workers.

Why should the leadership get such outsized executive comp and massively disproportionate upside on the stock? Worse, why should they actually be incentivized to be hostile to their workers (e,g. suppress wages and implement layoffs to boost quarterly profits)?

In short, why do we accept that workers should come last? Part of the issue here is that we've accepted corporate personhood as a real thing, wherein we are somehow morally obligated to protect corporations at the expense of actual people.

>We need to cut the link between retirement funds and the stock market.

That's not the problem. Equity is. See above. ;)