Friday, December 5, 2014

"Comparing fast-food worker pay to CEO pay only displays a person's ignorance of how the marketplace works."

Please Stop Comparing Fast-Food Worker Pay To CEO Pay
By Chris Rossini

Bill Moyers has a problem with this:

The average fast food worker makes $8.69/hr. McDonald’s CEO makes $13.8mil/year.

This is a very popular comparison that Progressives like to make. It shows a complete lack of understanding as to how the marketplace works.

The amount you get paid in the marketplace is determined by the amount of value that you bring. I once had a progressive ask me "How is it right to value people like that?"

She completely misunderstood me. It's not the people themselves that are being valued, but their skills!

You can be an extremely valuable father, mother, uncle, or brother. You can be a valuable friend, or husband. That's all wonderful stuff, and very important to well-rounded life. However, those qualities are not what is being valued in the marketplace. An employer pays you for the skills that you're able to offer. The more valuable the skills, the more money you'll be paid.

Progressives can't seem to wrap their heads around this...nor do they seem to want to.

The skills necessary to be a fast-food worker cannot be compared to the CEO of the company. I can speak from first-hand experience on this one too.

My very first job as a teenager was working for McDonald's. I had the skills to do the job as a young teen. There were a lot of people that had the same exact skills to replace me when I left. McDonald's did not go into a panic when I quit the job. They were probably able to hire someone before I stepped out the door!

Now, if you were to take me at that skill level and asked me: "Would you like to do the CEO's job for a day?" I would have thought you were insane. I didn't have any management skills. I couldn't oversee many thousands of stores located all over the world, and countless numbers of employees to boot. I didn't have the ability to deal with every possible crooked politician that could be thrown at me.

But guess what? The McDonald's CEO does have those skills. He has mastered disciplines and accumulated skills that really can't be comprehended by the average person.

Such skills are very rare! If the McDonald's CEO quits, the board may in fact shed many tears. Now they have to replace a person with a skill set that is extremely valuable. They may have to pay more than $13.8mil/year for the next guy.

Comparing fast-food worker pay to CEO pay only displays a person's ignorance of how the marketplace works.

Unfortunately, it's a much too common error.

This can't be stressed enough: It's the skills, not the person that is being valued in the marketplace. The skills!

For some reason, government textbooks leave that part out. I can't imagine why.


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