> A good friend of mine is currently getting their MBA from a fairly well regarded school...
Let that good friend of yours get actual job in some non-superlative companies like Wall street banks or FAANG. They will learn how their fantastical ratios of 5:1, 10:1, or 25:1 work in real life.
> ... you realize just how underpaid people are...
If that were true those 100s of thousands companies be making enormous unheard of profits. But that doesn't seem to be happening.
This means nothing. Its a red herring. The fact is executives are paid outsized to the rest of a company typically, certainly when you look at companies of size like Google, Microsoft or even Intel or Nvidia (and so it goes down the chain really), and I really question the value of most executives, as they tend not to like being scrutinized by outside parties, especially within their own organizations, but the reverse is untrue. They really seem to hate accountability but sure love getting the board to rubber stamp golden parachutes and big bonuses for themselves
If a corporation can find 350 million dollars to pay out in executive bonuses salaries etc. I'm certain than is an allocation problem not a money problem.
>If that were true those 100s of thousands companies be making enormous unheard of profits. But that doesn't seem to be happening.
>Let that good friend of yours get actual job in some non-superlative companies like Wall street banks or FAANG. They will learn how their fantastical ratios of 5:1, 10:1, or 25:1 work in real life.
They have one, I'm declining to use identifying information. The largest bonuses and salaries funnel upward, its no secret, with huge executive (and to be clear, I'm bundling VPs and SVPs in this) getting hundreds of thousands to millions of dollars in bonuses that those below them see a fraction of.
Like profits being at record highs last year?[0] and thats just 5 seconds of running a search.
Not mention we are talking ratios here. So just because some SMBs aren’t taking in millions doesn’t mean the ratio is any less true
[0]: https://thehill.com/business/4561631-corporate-hit-record-hi....
Labor compensation is determined primarily by substitutability. A $200K engineer creating "$1M worth of value" is not automatically deserving of a higher wage unless there is no one else willing to do that engineer's job for $200K.
I’m not saying don’t people pay well but the executives - non executive power balance is huge and I don’t see how a person can deny this.
Materially executives are also rarely helped accountable for their terrible decisions or layoffs would actually be laid at their feet.
Labor market imbalances of power are well documented and easily discoverable. It’s really plain at this point that material productivity gains have almost entirely been funneled to the top, with workers benefitting very little. Wages have not kept pace with productivity gains since the 1970s, even if you include the recent blip of wage increases they aren’t meaningful in the grand scheme of things.
I don’t know why we just accept these as truths or whatever cause they don’t have to be
I'm not a fan of the status quo. Things should change.
Which reminds me of another thing. A good friend of mine is currently getting their MBA from a fairly well regarded school. One thing they recently learned about is structuring compensation. The general adage is that whatever you pay an employee must be in reflection of the multiple you get back from that employee. For example a ratio of 5:1 would be for every 1 dollar you pay you get 5 back.
When you start thinking about it like that, you realize just how underpaid people are. So many companies - in fact the vast majority - it’s much higher, in tech for example it’s usually around 10:1 and often as high as 25:1 or more.
This makes it much more straightforward in understanding things and the power imbalance when thinking about it like this