Free Market and the Salary

Free Market and the Salary

 

Apparently an alderman from Chicago feels that the hourly wage of the CEO of a major retail corporation shouldn’t be more per hour than the annual wage of an employee who works at the bottom rung of the organizational ladder.

First the alderman works at the pleasure of the voters in his district and his opinions of the salaries out in the private sector shouldn’t be any of his concern unless he is using the information to reduce the government payroll he is a part of.

The salary and other benefits of the CEO of any corporation are determined by the Board of Directors of the corporation. The CEO has an important and difficult job. None of us should begrudge them whatever they can get. The corporation has to make a profit for the stockholder. If possible the profits should provide quarterly dividends for those stockholders. People invest in the corporation to make money. The CEO is the leader of the organization and makes the profits happen through the resources available to him within the structure of the corporation.

The employees at the bottom rung of the organization make the salary that the job is worth. It may be minimum wage or more than minimum wage, it depends on what skills they need. If you can get enough qualified people to do the job at minimum wage then you don’t need to pay more. If that doesn’t get enough qualified employees then you have to pay more. Another consideration that the free market has an impact on is turn over.

When you start to lose some employees because a competitor in town is paying them more for that job, then you have to review your pay scale and become competitive. The free market sets the level. Now if you feel generous and choose to pay more than the free market sets for that position, you are doing a disservice to the stockholders. Your expenses are too high and the profits are down. They are choices that management has to make. The deliberate decision to pay higher than the competition to maintain stability and provide security to the work force is a valid decision to make. There are positive results to that decision, but that is a decision that management has to make. Profits are the goal of most corporations. The stockholders are entitled to it and they demand it.

The free market does a great job of determining what a job is worth and how much a job is worth. Artificially determining the salaries will not maximize profits and with artificially inflate expenses and will not make the corporation as competitive as it should be. Paying more than job is worth to satisfy some social guilt feelings prevents the corporation from being as efficient and competitive as it should be. Then the price of the stock goes down and dividends go down or disappear. Those are bad business moves.

The lower in the organization is the more candidates and the fewer skills and experience the position requires.

The higher the position the more skills and experience is required. There is only 1 CEO and the skills and experience required are plentiful. There are very few exceptional candidates for these positions.

The free market is less of a factor in this salary than in other salaries, but then there are so few of these positions available.

An alderman from Chicago shouldn’t stick his local political nose into this arrangement until he has a better basic understanding of economics. Those in the lower paying jobs are not forced to stay there. If they feel that the corporation isn’t paying them what they are worth then the free market is there for them too. Individual employees who have marketable skills and offer more than their current employer is paying them for can go out and find a better paying job. Make use of your marketable skills and get yourself a better job offer. If on the other hand you don’t have any skills that will get you a better paying job, then you have to accept the one you have. A poor paying job beats no job.

We all have the opportunity to acquire skills and gain experience in life. It is an individual responsibility to make yourself marketable and to maximize the type of job you are qualified for. If you are angry at your employer for paying you the small salary they are paying you blame yourself for not being more marketable.

If you feel jealous that the CEO makes more in an hour than you make in a year, try to learn from him or her and see what kind of an education and experience they have and fight for the opportunity for your children to get that and for them to do better than you did in life.

Don’t cry and complain, don’t try to demonize the CEO, and for God’s sake don’t listen to a Chicago alderman. Their ability to understand basic economics is marginal at best.

 

 

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Free Market and the Salary

Free Market and the Salary

 Apparently an alderman from Chicago feels that the hourly wage of the CEO of a major retail corporation shouldn’t be more per hour than the annual wage of an employee who works at the bottom rung of the organizational ladder.

First the alderman works at the pleasure of the voters in his district and his opinions of the salaries out in the private sector shouldn’t be any of his concern unless he is using the information to reduce the government payroll he is a part of.

The salary and other benefits of the CEO of any corporation are determined by the Board of Directors of the corporation. The CEO has an important and difficult job. None of us should begrudge them whatever they can get. The corporation has to make a profit for the stockholder. If possible the profits should provide quarterly dividends for those stockholders. People invest in the corporation to make money. The CEO is the leader of the organization and makes the profits happen through the resources available to him within the structure of the corporation.

The employees at the bottom rung of the organization make the salary that the job is worth. It may be minimum wage or more than minimum wage, it depends on what skills they need. If you can get enough qualified people to do the job at minimum wage then you don’t need to pay more. If that doesn’t get enough qualified employees then you have to pay more. Another consideration that the free market has an impact on is turn over.

When you start to lose some employees because a competitor in town is paying them more for that job, then you have to review your pay scale and become competitive. The free market sets the level. Now if you feel generous and choose to pay more than the free market sets for that position, you are doing a disservice to the stockholders. Your expenses are too high and the profits are down. They are choices that management has to make. The deliberate decision to pay higher than the competition to maintain stability and provide security to the work force is a valid decision to make. There are positive results to that decision, but that is a decision that management has to make. Profits are the goal of most corporations. The stockholders are entitled to it and they demand it.

The free market does a great job of determining what a job is worth and how much a job is worth. Artificially determining the salaries will not maximize profits and with artificially inflate expenses and will not make the corporation as competitive as it should be. Paying more than job is worth to satisfy some social guilt feelings prevents the corporation from being as efficient and competitive as it should be. Then the price of the stock goes down and dividends go down or disappear. Those are bad business moves.

The lower in the organization is the more candidates and the fewer skills and experience the position requires.

The higher the position the more skills and experience is required. There is only 1 CEO and the skills and experience required are plentiful. There are very few exceptional candidates for these positions.

The free market is less of a factor in this salary than in other salaries, but then there are so few of these positions available.

An alderman from Chicago shouldn’t stick his local political nose into this arrangement until he has a better basic understanding of economics. Those in the lower paying jobs are not forced to stay there. If they feel that the corporation isn’t paying them what they are worth then the free market is there for them too. Individual employees who have marketable skills and offer more than their current employer is paying them for can go out and find a better paying job. Make use of your marketable skills and get yourself a better job offer. If on the other hand you don’t have any skills that will get you a better paying job, then you have to accept the one you have. A poor paying job beats no job.

We all have the opportunity to acquire skills and gain experience in life. It is an individual responsibility to make yourself marketable and to maximize the type of job you are qualified for. If you are angry at your employer for paying you the small salary they are paying you blame yourself for not being more marketable.

If you feel jealous that the CEO makes more in an hour than you make in a year, try to learn from him or her and see what kind of an education and experience they have and fight for the opportunity for your children to get that and for them to do better than you did in life.

Don’t cry and complain, don’t try to demonize the CEO, and for God’s sake don’t listen to a Chicago alderman. Their ability to understand basic economics is marginal at best.

 

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This is what the Founding Fathers wanted

This is what the Founding Fathers wanted

I want to start out by saying that Donald Trump would not be my first choice for President. I also want to say that he wouldn’t be my last choice or that I’m in a mad panic that he could be the next president. On election day I could vote for him especially if he is running against someone with a smaller vision, or far less integrity than Donald has. Integrity is a major issue not just for elections but for life as well.

The Founding Fathers wanted a government that was based on checks and balances. The President was intended to be one third of the process. The Legislature (The House of Representatives and the Senate) was intended as the second third, and finally the Judiciary (The Supreme Court) was intended as the final third of the government.

The system was intended to be based on checks and balances. Over the years politicians bastardized the process. Professional politicians were never intended to be part of the process. Public service was supposed to be a contribution by successful citizens to their communities. Citizens were intended to take time out of their lives to serve their neighbors, not make a life and gain a fortune from public service.

The Senate was never expected to be elected by the voters. They were supposed to be selected by the state legislatures and represent the interests of the State governments. Congress passed it in 1912 and it was ratified in 1913. That is a powerful dynamic that was lost when this became the process. The Federal government was intended to be restrained and checked by the States. This was a significant tool the states had to retain influence in the process. Senators no longer have an allegiance to their state governments.

The Founding Fathers had a reasonable expectation that the elected officials would be men of honor and integrity. They all were honorable men who lived in a different time under completely different circumstances. They couldn’t imagine a person getting elected if they were liars, cheats, or thieves. They didn’t expect the voters to be low information voters who could be easily sways with shiny objects or promises of free stuff.

Voters tend to vote for reasons that do not necessarily make them fully informed. The billions of dollars spent by political campaigns are not spent on revealing the truth behind every candidate. Some groups in the media publish measurements of the honesty of each add. Misrepresenting the facts is a major piece of a campaign.

Donald Trump may be a flawed business man, a flawed man, and a flawed candidate, but is he any more flawed than the existing political class.

His major failing in the eyes of the political class is that he doesn’t need their money and he can’t be controlled by them.

I can’t wait to see how this turns out!!!!

 

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Good Intentions vs. Results

Good Intentions vs. Results

 

Some of us look for credit for our good intentions. Our motives are pure and selfless; therefore you must accept our intentions and give us credit regardless of the results.

I observe that the young lady I see at the far end of the pew is very attractive and nicely built. She would look very nice on my arm as I walk into a social setting with my peers. I intend to commit a wide assortment of venial and possibly a mortal sin or two in my attempts to get her on my arm. My intentions are to enhance the opinions of my peers of me, as well as for me to enjoy, and I mean really enjoy, the company of this young lady. I walk up to her and look her in the eyes and say “Hello….” As I try to continue she puts her hand up and says, “Stop right there, and get away from me you fat bastard!”

My intentions were honorable (as they relate to my own personal and selfish motives). I wanted to impress my friends and I also wanted to have a very good time in the process. Why didn’t she allow me to complete the process, could her interests have any impact on my good intentions? It seems that it depends on whose intentions we’re talking about.

Elected empty suits want to provide health care for everybody legal or questionable resident, insured or uninsured, sick or healthy, young or old, whether they want it or not. Their selfless (in their own selfish opinion) motives and good intentions are more important than the results or lack there of.

If the intended and unintended consequences of this 2000 plus page legislative boil on the ass of democracy are not a matter of concern for us. Their intentions are pure (as pure as mine in my attempted sexual assault of the lady sitting in the pew) therefore they deserve credit for their intentions only. Results are only important if they’re used as a criticism of your political opponents.

One of the former great states of this country was getting ready to inflict a tax on sugary drinks. The intention was stated as a punishment for the individual’s poor choice in beverage, and a tool to use behavior modification to correct those poor choices. A side benefit was expected to be some additional revenue to allow the elected dummies to satisfy their obligations to their owners and masters who demand more payments to this and that.

Their stated intention is to modify behavior to make us healthier; they will accept some additional revenue in the process. Their hands are back in our pockets and that makes everything OK. If we do or don’t modify our unhealthy ways, so be it that makes it better for the additional revenue. Their intentions are so pure.

My attempted sexual assault is starting to look like less and less of a crime when you look at it in comparison to the pillars of our communities.

My intentions were honorable from my own personal point of view. An attractive young lady would have been disappointed and despoiled, but I would have been a stud in the eyes of my buddies, and I would have had some real good material to misrepresent, mislead and ultimately to lie about my performance and results to my friends.

I better be careful it’s starting to sound like I’m running for congress.

The low information voters are easily impressed with candidate’s intentions and are not clever enough to look for results. Good intentions are fantasies until they are translated into results.

The problems with political good intentions are that they usually promise a free lunch. Lunch is never free, you may not have to pay for it but someone else has to. They promise you New York Strip Steak and Lobster Tail, but you get a moldy bologna sandwich, a green Jell-O. The tax payers who always have to pay for the promises of the elected serial spenders is charged for the New York Strip Steak and Lobster Tail.

The low information voters give them credit for their intentions to give away the free lunch and never consider the results, their moldy sandwich and green Jell-O.

We all need to be more critical of candidate’s results and not their intentions. I don’t care what you tried to do, show me; don’t tell me what you accomplished. I could have had a hot young babe spend a weekend in a cheap hotel with me, fulfilling all of my worst and impure fantasies, but it didn’t happen because the selfish lady had some standards.

We have to start being selfish and find a few standards, even low standards would keep these bums out of office.

 

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Fairness, Equal Opportunity, and Rap Stars

Fairness, Equal Opportunity, and Rap Stars

 

Those with a liberal mindset believe in principles that are noble and make sense, but they aren’t always practical or guarantied.

Equal opportunity is one of those principles and it exists in the world today. We all have equal opportunity but its equal opportunity to achieve, not equal opportunity in results. Hard work, experience, and achieving results earn success and experience. We all have an equal opportunity to perform; we don’t always have equal opportunity to earn the same results. A successful banker will earn more than a member of the housekeeping crew who works in the same bank.

The banker’s education and experience provides that banker with more opportunity to become the successful banker. A successful rap star will also make more money than the member of the house keeping crew, but then the two did have equal opportunity to get the house keeping position and record the music, personal choice and determination do have an impact in results.

Equal opportunity is here and has been for many years, what we each do with that opportunity is our personal choices and the results may vary.

Upward mobility is another liberal principle that is offered daily. The house keeping employee in the bank has every opportunity to move upward if the effort is made. Hard work and excellent performance will lead to promotion within the housekeeping department in that building. Dependability, work ethic and results lead to promotion and advancement. All personal responsibilities and all lead to success and upward mobility.

Another possibility is the ability to work hard and work toward more education. Education coupled with hard work lead to more success more opportunity and more upward mobility. Again all of this is personal choice, hard work, and a strong work ethic. Upward mobility can be achieved by anyone anywhere if they strive for it.

Fairness is a noble concept that liberals use all the time. What is fair? Is equal opportunity fair? Did I have an unfair advantage because my father worked three jobs to earn the money to send me and my siblings to college? Did I have an unfair advantage by learning a strong work ethic watching my father and mother work so hard to teach us right from wrong and supporting us? Did I have an unfair advantage when I worked hard and performed well and was selected for promotion before others were selected?

The answer to each question is no. We all have fair opportunity to make personal choices. What we do with those choices is what matters. The rap star makes tons of money that I’ll never make, but is it unfair that the rap star earn that money? I don’t think so; the rap star owns an artistic property that is in demand. I applaud every dollar the rap star earns.

If we do believe that, then everything others earn and we don’t earn is unfair or unequal, then how do we fix it? Freedom and opportunity is part of what makes this country great.

The rap star is free to make music and sell the music. Money comes rolling in from that music. How to we make the rap star share the fortune with someone like me. I go to work every day I work hard I pay my bills but I don’t enjoy the life style of the rich and notorious. I want it; I deserve it; make all the rap stars give me some, and while you are at it make them give all of us some.

Will the rap star think I’m entitled to part of that fortune? I don’t think so. We all have to be free to work and earn, our skills and experience determine how much success we each earn, artificially attempting to level the playing field only makes it much more unlevel.

Liberal politicians never offer practical solutions to their noble ideas, because there are no practical solutions to achieve them. Freedom and fairness exist already, but it’s how we each use the freedom to better ourselves and our families that varies. Results will vary and they’re supposed to.

I go to sleep each night hoping I can become as rich as a rap star without using such bad language or ugly treatment of women. I also go to sleep knowing that the rap star is entitled to every dollar they earn, because they did earn it and I didn’t.

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Freedom and Liberty

Freedom and Liberty

 

Freedom is defined as the power or right to act, speak, or think as one wants without hindrance or restraint.

Liberty is defined as the value of individuals to have control over their own actions.

Some quotes about Freedom and Liberty from some prominent citizens of this country over the years help us get a better perspective on Freedom and Liberty.

“They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”                       Benjamin Franklin, Historical Review of Pennsylvania, 1759.

“Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.”                       George Washington, in a speech of January 7, 1790

“I cannot undertake to lay my finger on that article of the Constitution which grant[s] a right to Congress of expending, on objects of benevolence, the money of their constituents.”                  James Madison, 1794

“Those who deny freedom to others deserve it not for themselves.” Abraham Lincoln

 

Government is supposed to serve the people not the other way around. Our government is trying to get too deeply into our lives. We have started to allow government to grow beyond the original intent of the Founders. They’re starting to limit what we as citizens can do and can’t do.

Government has decided that they are the answer to all our troubles. The safety net that has grown around us has captured the drive and incentive of the individual. Since the mid sixties we have thrown trillions of dollars at poverty and the numbers of those who are being helped only increases. That tells me that money is not the answer to poverty.

Government is now trying to solve the health care problem, which was only a problem from their point of view. There were millions of uninsured who did not have health insurance; some didn’t have it by choice, some didn’t have it because they didn’t support themselves and didn’t have the means to pay for health insurance. The system was working. The opportunity was there to buy insurance if you worked and earned enough to afford it. Some chose not to pay and to take the chance that they wouldn’t have any significant medical expenses.

At an early age we all need to make some decisions in our life. How do we raise our children? Do we encourage school and a good work ethic or do we let the child do as they please. Education leads to more and better opportunities for a child as they grow up. Opportunities lead to better income and less need to turn to someone else for help. The sources of help are friends, family, the church, the community, and government.

A parent’s poor performance or poor choices seem to be paid for by the rest of us. The federal government is not supposed to solve all of our problems. The Constitution didn’t design it to be a nanny, but most importantly it doesn’t have the skill sets or temperament to do the job effectively.

The decisions are made by politicians who are skilled at telling voters what they want to hear to get elected, they are not the problem solvers that the private sector hires to solve problems and save the organization money.

The private sector depends are results, real cost savings and profits. The government spends others people’s money to buy their love and loyalty. They pass laws or use executive orders to limit the freedom of citizens; they prevent us from being independent and self sufficient.

We were founded by rugged individualists who wanted independence. They did not want government in their lives any more than necessary. They didn’t want government to solve their problems, and more than 200 hundred years later most of us still don’t want government poking their bureaucratic noses into our lives. They do it to solve the problem of the low information voters who want to have a nanny government take care of them.

Freedom and liberty does not include a redistribution of wealth. The current attempt by government to solve the health care needs of everybody causes all of us to pay more for more medical insurance than we want to cover the expenses of those who can’t do it themselves. My choices are limited and my expenses are increased to spread the wealth around for those who wont or don’t pay for it on their own.

We all need to be self sufficient and independent so we don’t need a nanny government to solve our problems. If we did a nanny organization to solve our problems government is the last organization to look to for help. They have little to no successful experience at running anything, and they have no concept of managing expenses or expecting results.

Freedom, liberty, independence, and self sufficiency are what this country was founded on. I miss those qualities!

Stop voting for anyone who wants to limit them.

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A Free Market Economy

Today we’ll have a history lesson. Based on the title above some of the sharper among you may think this is going to be an economics lesson, but based on the current situation this concept may start to be a thing of the past, therefore this becomes a history lesson. I looked up this concept in Wikipedia:

“In social philosophy, a free market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand within the market determines who gets what and what is produced, rather than the state.”

When we can get government to stay out of the mix the free market seems to work. I want a loaf of bread so I go to the baker and buy a loaf of bread for the price the baker sets. I get a nice loaf of bread; he sells a loaf and makes a profit on that loaf. As long as I’m happy with my loaf of bread it’s none of my business how big a profit the baker earned for the loaf. Now if I have a choice of bakers and a choice of loaves of bread I have to make a decision. Baker A, Baker B, and Baker C all sell their loaves for fifty cents a loaf (notice the price; I wanted this to be a real historical document). Baker D is real proud of his loaves he tries to sell them for a dollar a loaf.

Bakers A, B and C all sell about the same number of loaves. The public chooses based on their personal preferences for the individual baker’s style. Baker D rarely sells any bread; his price is out of line with the free market. Only the desperate and the stupid buy bread from this gamoke.

See how nice the free market works. If Baker D learns to control his costs, and become competitive he too will sell a fair share of the loaves, but when his price gets out of line, he’s baking bread for no apparent reason.

Now if we were to create a perversion to the free market by creating bread insurance, the customers could pay a fee or premium to an insurance company to help them pay for their bread. This would pervert the price the bakers receive for their effort; it would alter the price that the consumer pays for their loaves.

If I’m paying money, directly out of my paycheck so I lose sight of how much I’m paying for the insurance not to mention how much the bread costs. Bread becomes a freebie, its not like I’m really paying for it any more. Somebody else is.

The baker has his business perverted as well, now he gets paid based on the agreements with the insurance companies. Some insurance companies will pay him a price less than the customer used to pay but enough to cover his costs and provide a small profit. This works for a time, but costs rise and customer base grows and shrinks and nothing stays the same.

At some point it’s possible that the price of bread that costs forty cents to bake and used to sell at fifty cents, now costs 50 cents to bake but is selling for more than a dollar a loaf, because the insurance company has to cover its administrative costs and the baker has to hire a few people to process the claims to get paid and the consumer is paying more than fifty cents per loaf in insurance premiums.

There is no more competition when you don’t care how much you pay for a loaf of bread because you aren’t paying for it anymore. You buy it from Baker B because they’re affiliated with your bread insurance provider. You used to prefer Baker A because his bread was better, but you’re content to go to Baker B because it’s covered and your insurance pays for it.

A baker is entitled to make a much money baking and selling bread as he can. Personally I hope he becomes a millionaire selling bread, because if he can than anyone can, that’s part of what makes this country great. But for any baker or any person to be successful the free market economy is the engine to that success.

The free market sets fair prices and establishes reasonable costs without the layers of administration and rules and restrictions. The free market lets supply and demand establish the limits to production and consumption.

If you make a good loaf of bread, I’ll buy that loaf and pay your price; if you don’t make a good product for a good price then you won’t thrive and will not stay in business. Your products and your prices will determine that, not some agency or administrative process. Government needs to learn how to lower our taxes and spend less of our money and keep out of our economy as much as possible.

The sort of people who run for office are only good at fixing elections, they aren’t good at running a business. Once we finally get them out of office they’ll learn that as well. The sooner they’re unemployed the sooner our free market economy can get back to normal.

 

 

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