WP:With executive pay, rich pull away from America

[jpillian]

With executive pay, rich pull away from America

http://www.washingtonpost.com/business/economy/with-executive-pay-rich-pull-away-from-rest-of-america/2011/06/13/AGKG9jaH_story.html

...

For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent. But economists had little idea who these people were. How many were Wall street financiers? Sports stars? Entrepreneurs? Economists could only speculate, and debates over what is fair stalled.

Now a mounting body of economic research indicates that the rise in pay for company executives is a critical feature in the widening income gap.

The largest single chunk of the highest-income earners, it turns out, are executives and other managers in firms, according to a landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T. Heim. These are not just executives from Wall Street, either, but from companies in even relatively mundane fields such as the milk business.

The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.

...

Other recent research, moreover, indicates that executive compensation at the nation’s largest firms has roughly quadrupled in real terms since the 1970s, even as pay for 90 percent of America has stalled.

...

Then, late last year, economists Bakija, Cole and Heim completed their massive analysis of income tax returns.

Little noticed outside academic circles, their research focused on the top 0.1 percent of earners. From those tax returns, they could glean a taxpayer’s occupation, which is self-reported. Using the employer’s tax identification number, the researchers found the industry they were employed in.

After executives, managers and financial professionals, the next largest groups in the top 0.1 percent of earners was lawyers with 6.2 percent and real estate professionals at 4.7 percent. Media and sports figures, who are often assumed to represent a large portion of very high-income earners, collectively made up only 3 percent.

I've quoted a few portions of the article which I found most interesting.

My biggest concern isn't really that some have and I don't (waah). I'm fine with that. I'm more concerned with how this effects our democracy and our society as a whole. Wealth buys influence in any form of government. Does this sort of wealth buy disproportional influence?

[twa]

Is your vote for sale?....are your representatives or local officials?

Start with what you can control,then ask yourself if your idiot neighbor should have the same influence as a successful businessman.

[SnyderShrugged]

The answer isnt limiting their wealth then, the obvious answer is to strictly limit the abilities for that wealth to curry favor and buy policy.

[mardi gras skin]

Was anyone else surprised to learn that the top 0.1 percent of earners make $1.7 million and up? I mean, How many athletes, coaches, owners, and managers of our various sports fit in this category? Musicians, actors, directors...entertainers in general.

I would have thought you'd have to make more than that to be in the top .1 percent of earners.

[Prosperity]

.are your representatives or local officials?

is this a serious question?

I mean, How many athletes, coaches, owners, and managers of our various sports fit in this category? Musicians, actors, directors...entertainers in general.

the article said 3% of the 0.1% so 0.003% of Americans

so probably around 10,000 in the US... I don't personally know anyone that makes 1.7 mil+ a year... frankly I would have guessed the number (annual income) to much smaller than it is for the top .1%

[twa]

is this a serious question?

the article said 3% of the 0.1% so 0.003% of Americans

so probably around 10,000 in the US... I don't personally know anyone that makes 1.7 mil+ a year... frankly I would have guessed the number (annual income) to much smaller than it is for the top .1%

yes, if ya do ,do something about it

I probably know a few making that,though I never looked it up,...really only 10K of them?

[Prosperity]

well if you know how to "do something" about corruption, I'm all ears

as for the 10k

Media and sports figures, who are often assumed to represent a large portion of very high-income earners, collectively made up only 3 percent.

3% of the 0.1%

the vast majority come from:

. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm

20% of the top 0.1% derived most of their income from "ownership"

it appears as if the rest (of the 60% or so of the top .1%) are financial managers/advisers/executives

[twa]

Is a congress critter a executive ,a manager or player?

http://thehill.com/blogs/on-the-money/801-economy/166599-pelosis-net-worth-rises-62-percent-

Pelosi was worth at least $35.2 million in the 2010 calendar year, according to a financial disclosure report released Wednesday. She reported a minimum of $43.4 million in assets and about $8.2 milion in liabilities.

For 2009, Pelosi reported a minimum net worth of $21.7 million.

[Prosperity]

I think she's one of those successful business owners you were talking about

[Bang]

Is a congress critter a executive ,a manager or player?

http://thehill.com/blogs/on-the-money/801-economy/166599-pelosis-net-worth-rises-62-percent-

Pelosi was worth at least $35.2 million in the 2010 calendar year, according to a financial disclosure report released Wednesday. She reported a minimum of $43.4 million in assets and about $8.2 milion in liabilities.

For 2009, Pelosi reported a minimum net worth of $21.7 million.

This should answer all of your earlier questions.

There's nothing we can do about it.

Our leadership choices are consistently made up of wealthy people.

And they tend to be interested in money, and thus are able to be bought by special interests which are made up by wealthy people who can afford to spend a lot of money in order to stack the deck in their favor.

~Bang

[chipwhich]

There's nothing we can do about it.

Term limits. Without that....

[DRSmith]

Term limits. Without that....

If you can set limits on politicians why can you not set limits on those who most often buy politicians?

[twa]

If you can set limits on politicians why can you not set limits on those who most often buy politicians?

we do, term limits are much simpler and manageable though

harder to conceal

[DRSmith]

we do, term limits are much simpler and manageable though

harder to conceal

Really there is cap on the pay and bonuses of those who work on Wallstreet?

[twa]

Really there is cap on the pay and bonuses of those who work on Wallstreet?

Capping pay would be a idiotic way to suppress corruption...ask Russia

[DRSmith]

Capping pay would be a idiotic way to suppress corruption...ask Russia

And the growing wage disparity and laws meant to favour the rich few lead to wide spread rebellion ask the middle east

[twa]

And the growing wage disparity and laws meant to favour the rich few lead to wide spread rebellion ask the middle east

If you think pay is the real issue there I don't have much hope for a conversation.

[DRSmith]

Well the average persons wages have not rise much in the last 20 years but the money for the very wealthy and super rich is skyrocketing and look at what is happening to your country huge unemployment, A piss poor econmy and the future is not looking much better.

And what is the solution sought more by some, lower taxes more, less domestic spending and cheering when middle class folks lose things they have bargained for.

[twa]

Explain the Texas economy,not even the idiots up there have killed it yet...but they keep trying

[SnyderShrugged]

Really there is cap on the pay and bonuses of those who work on Wallstreet?

In Canada, whats the cap on your wages personally? How much are you personally allowed to earn annually. Just curious.

Is the cap for your people on a sliding scale or is it a set level by role or industry?

[mcsluggo]

Capping pay would be a idiotic way to suppress corruption...ask Russia

I can't ask Russia, so tell me what Russia would say?

---------- Post added June-20th-2011 at 02:47 PM ----------

If you think pay is the real issue there I don't have much hope for a conversation.

you don't think a lack of opportunity for the average citizen and generalized disparity contribute to the instability we are seeing?

[twa]

I can't ask Russia, so tell me what Russia would say?

---------- Post added June-20th-2011 at 02:47 PM ----------

you don't think a lack of opportunity for the average citizen and generalized disparity contribute to the instability we are seeing?

But you can ask Russia...history speaks if you listen

lack of opportunity is not remedied by capping pay at the high end and generalized disparity is a natural state.

we may all be created equal,but it does not remain thus.....no more than all choices are equal

[mcsluggo]

But you can ask Russia...history speaks if you listen

lack of opportunity is not remedied by capping pay at the high end and generalized disparity is a natural state.

we may all be created equal,but it does not remain thus.....no more than all choices are equal

so your point was to use a basically unrelated sledge hammer to answer the question.... the comparison between a statist control of ALL basic supply and demand decisions versus a regualatory cap on earnings is strained, to put it politely.

for the record i think a basic earnings cap on executive pay would probably be too blunt of an instrument to solve the probem efficiently. BUT... I also think there clearly is a market failure evident here --- the lack of an efficient, incentive-aligned "market for executive pay" to set exec pay. IN that case even inefficient blunt instruments can make a "second best" solution that is better than the inefficient unregulated solution. But in this case something less drastic, like requiring executive incentive packages (upside bonuses like stock options or whatnot) to be structured as un-tradeable for a much longer time horizon would be a good first step towards aligning exec incentives with actual stockholder concerns-- the increasing inequity between exec and worker pay isn't the PRIMARY concern for me.

[December90]

so your point was to use a basically unrelated sledge hammer to answer the question.... the comparison between a statist control of ALL basic supply and demand decisions versus a regualatory cap on earnings is strained, to put it politely.

for the record i think a basic earnings cap on executive pay would probably be too blunt of an instrument to solve the probem efficiently. BUT... I also think there clearly is a market failure evident here --- the lack of an efficient, incentive-aligned "market for executive pay" to set exec pay. IN that case even inefficient blunt instruments can make a "second best" solution that is better than the inefficient unregulated solution. But in this case something less drastic, like requiring executive incentive packages (upside bonuses like stock options or whatnot) to be structured as un-tradeable for a much longer time horizon would be a good first step towards aligning exec incentives with actual stockholder concerns-- the increasing inequity between exec and worker pay isn't the PRIMARY concern for me.

Other than your pure jealousy, what is your reason for wanting to punish successful people? Should we put a cap on how much income an actor should be able to make from a film production? should we put a cap on how much a singer/songwriter should earn from an album or concert tour? Should we cap how much money a person can make my writing a book?

Just curious, How can you consider the non-free-market over regulated condition we are in right now "a market failure"?

The Lefty dribble about "the Rich" is old and way overplayed. If you want "it" then it earn "it", If you have already earned "it" then you should have the right to keep "it". Just because someone can afford to pay for other people's laziness doesn't mean that they should

[Busch1724]

Is a congress critter a executive ,a manager or player?

http://thehill.com/blogs/on-the-money/801-economy/166599-pelosis-net-worth-rises-62-percent-

Pelosi was worth at least $35.2 million in the 2010 calendar year, according to a financial disclosure report released Wednesday. She reported a minimum of $43.4 million in assets and about $8.2 milion in liabilities.

For 2009, Pelosi reported a minimum net worth of $21.7 million.

That's what she's worth, not her yearly income as the article is saying.