Are there immoral earnings?
Ask most people on the street, and the general perception makes it clear that corporate executive salaries are a toxic issue in the public consciousness.
An issue that was shown in the recent political battles, was that of the persistent and growing gap between the bosses and the workers.
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The divide between rich and poor grows and grows each year. In 2011 this issue was taken to the streets through the Occupy Wall-Street movement which moved across North America.
Many people feel the system is rigged in favor of the wealthy, creating much disillusionment and disenfranchisement of our system and way of life. The recent political election showed how many people felt they were entitled to certain expectations such as free this or that, thinking that things magically produced for free and no one has to pay for any of it. But that's another issue...
What is an acceptable gap between the lowest in the highest economic rungs in our society? What do we think is acceptable? This would help account for the public anger currently being displayed these recent years.
Michael Norton and his colleague Sorapop Kiatpongsan took data from the International Social Survey Programme for their research into similar questions. The data consists of 55,000 respondents from 40 countries.
Key questions included:
- How much do you think a chief executive of a large national company makes in your country?
- How much do you think an unskilled factory worker makes
Averaging the results, people currently think bosses make 10 times more money than them, the regular "unskilled" workers.
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Participants also had other questions:
- How much do you think a CEO should make in your country?
- How much do you think an unskilled factory worker should make?
This produced an average of 4.6, which would be the ideal ratio people think that bosses should be making.
But reality doesn't match the equitable fair world we want to live in.
In the UK, for example, the pay gap is a whopping 84:1 ratio, meaning bosses are paid 84 times more than regular workers. And the wage gaps have been rising, worldwide.
In the US, the boss-to-worker pay ratio was about 20:1 in the 1960s, and up to 32:1 in the 70s, and now it's about 300:1. That's pretty crazy.
Just look at the change in a 10 year period from 2002-2012:
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Given that people have an ideal expectation for fairness at around a 5:1 ratio, and that formerly the gap used to be 20:1 or 30:1 in the 60s and 70s, I think it's understandable why this is now a critical issue today when countries like the US have a gap of 300:1.
At 60 times more than people's expectations of what bosses and executives should be paid, it's no wonder that people are upset in general about this huge difference in wealth being created in society.
This shows that the current wage gaps are a large deviation from the common sense consensus of what is right. Does this mean these are immoral earnings?
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@krnel
2016-12-20, 7:55pm
Simply because somebody has more than me doesn't in and of itself indicate wrongdoing or immorality.
My question would be. Did they get this wealth though voluntary mutually beneficial exchanges, or some other means?
I have infinitely more wealth than your average middle income earner from Uganda yet I'm far from what would be considered wealthy by US standards. Wealth is relative and "wealth Gap" like any statistic only gives us a small slice of the story leaving out many important causal factors and other details.
Yup, it's a complex issue. This post only raises the question with some data. At the root cause, we all engage in the contractual exchange, even though we can develop alternative methods of cooperation to survive. But, we just keep on keeping on...
Really liking this post more, and more... I appreciate your input about "contractual exchange" and "alternative methods of cooperation" - IMHO Not Just to survive, but "Thrive". Example: I have friends with a dog (we'll call Milo) Milo's owners need someone to dog sit for 4 days. I own a incredibly friendly dog named "Digger" (ok, yes he is my dog)
The friend owns a sports massage business so we 'trade' in cooperation. I like dogs, so does my dog who is a 'behavior trainer' for a local animal shelter, and we agree in an exchange of services. Could have cost them $168 at a reasonable local kennel. I get 2 hours credit in business services. No monies exchange - no public data ledger in the financial sector of society. I survive another month in the "Unskilled Factory Worker World", because I can physiologically function in a 'hard labor market' at an advanced (undesirable) age group for said work. (this said for the benefit of @everittdmickey ) :D
Way to go! Thanks for the feedback. Barter is a good way to go to bypass the government coercion. Nice.
i agree...how you make your money is far more important than how much you make as far as philosophy goes. Creating value in a world of voluntary exchange and getting rich is not immoral...in fact, getting rich by creating value makes society richer. We seem to have short memories as a society, given that most of humanity was impoverished less than a century ago.
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What we have never noticed is that even among the rich there is social inequality. Even if everyone in the world suddenly woke up rich tomorrow, sooner or later the inequality would appear again, for there would be those who would spend every penny they had and those who would save every penny they had and increase their estate. Indifference will always exist.
I recently wrote an introductory article addressing this topic, though I did not touch upon the "social inequality" aspect of it. (Thank you) I was having lunch with a friend today, (who runs a non-profit) and our conversation touched upon this idea of what I would consider 'reckless spending' or "Consumerism-Extreme".
I've in the past addressed this at 'Broke in a higher income bracket'. The "American Dream has become living above your means".
One can be 'Rich' living on much less than what socially acceptable norms consider middle income. This can be accomplished without moving off the grid, austerity, and starving your family. An Individual who's income is $900 a month, yet has a an expense (out go) of $600 has $300 of "Disposable Income". (As if it was "disposable"). That's in reality, a reasonable argument. (not the numbers, but the percentage)
People who argue against this fail to understand the value of short term vs. long term gains, or the idea of delayed gratification.
I've thought for some time now that poverty is more a modest than the digits in one's bank acct.
I know people who earn substantial income yet are always crying "broke" and and are forever worried about finances. There are then others who have seemingly little who are generous with what they have and seldom complain about their situation. They are in effect living a "richer" life in a way than some of those with larger incomes.
As long as all of the interactions are voluntary and fraud is not committed then there is nothing immoral about the earnings. On a separate note, if you were to take the earning of even the most well paid CEOs and redistribute that even among all of the employees of the company, the amount would usually, if not always, be insignificant.
This entire question, about the growing divide between rich and poor, warrants the most serious thought. It is spoken about a lot, but is there any sign of the world moving towards a better dispensation? I am afraid not, and as throughout history, that holds danger.
Indeed, voices go through the movements, but nothing comes about through action as that takes a quantity and majority of force to change. Learning about things takes time, and most people are very busy.
Are there immoral earnings? Of course.
Are there immoral uses of technology? Are there immoral seductions? Are there immoral uses of electric power? Are there immoral uses of church pulpits? Are there immoral uses of the power of the (police) badge? Are there immoral uses of lawyers and laws?
If the word "immoral" has any meaning, then of course there are.
If the word "immoral" has no functional, useable meaning, then we are rapidly ceasing to become humans or to deserve (or have access to) a humane society.
Nice post @krnel ...interesting.
Thank you ;)
The post is complaining about symptoms rather than causes.
"unskilled factory worker".....now THAT's funny.
Sounds like my conversation with HR at my company about the work aspects of our local "Millennials" in the workforce. They spend 2+ hours on cellphones a day, complain about their "production pay" and can't understand how someone 2X their age takes home 3X their annual income. It's called "do what's required".
Whenever I'm hiring a person they'll often ask how much do pay?
My response is how much can you make me? Or in other words how much are you worth in the workplace? Then we go from there.
Often the most incompetent will over value themselves by not having even the most basic understanding of cost vs. value.
4 Sure there are immortal in compound interest yet... ;) <3