Wholly Misleading Half Truth: Worker’s Share of Corporate Revenue

Technically speaking, this is true. However, it conjures up a picture of the line employees getting the same share of revenue, which is not in the data. Worker pay includes everybody from the CEO to the mailroom clerk, when the CEO gets a salary and stock options. It excludes dividends, but for tax reasons dividends are tax inefficient.

Those who don’t compensate their employees enough end up having trouble attracting good workers and often lose their best employees to competitors.

This part of the explanation is true. However, but the fact is that the mix of employee value changes with time. It used to be that you needed Joe the production worker, who was a hard and conscientious worker even if he wasn’t too bright. Now Joe’s grandson works in Taco Bell because those production jobs are automated. On the other hand, while Tracy Technician wasn’t that much more important than her husband Joe, the other grandson, Trevor Technician, basically runs the whole factory by himself and is much more productive, with payment to match.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s