Quote:
Originally Posted by Undertoad
....He especially faces it when pricing labor. In the grocery business, labor costs are the bulk of the costs, aside from the price of goods sold. So as much as he wants to, if he pays $20/hour for checkers, he will go out of business because he won't have any money left. If he chooses to give smaller salaries to management, he'll get worse managers because his competition will get the good managers. His managers will leave to work for the competition. If he chooses to bring in inferior goods to take a bigger chunk per item sold, he'll lose business to quality.
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You can say that the market for CEOs is confused, that the CEOs make too much because boards don't understand that more people can do that job than the 1000 people vying for Fortune 500 company CEO positions. The boards don't agree with you.
You can say that the market for business owners is confused because too many owners take too much out of their businesses. But starting most businesses, especially those with employees, requires a buy-in of six figures and a rather complete understanding of the market and the profession. You can say, well people should be better owners, and on that we agree. But that problem doesn't lie in the rather forced economic revisionism you seem to espouse. Force labor and wage changes and you will just find the same owners making stupider decisions.
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What I'm saying is that when, or if you prefer "if" the CEO, the managers, even the cashiers have enough, they should stop accumulating wealth. My guess is that nobody in your explanation feels that they have enough. There will be planty of people who never have enough.