Friday, January 27, 2006

Salaries vs Profits / Wage Gouging

Are employees "exploited" by being given far less than they produce ? Economist Scott Larsen doesn't think so :

GE's 1997 sales were $90.84 Billion, had after tax profits of $8.2 billion and had 276,000 employees. Sales-per-employee was an amazing $329,120/employee. (...) Most other companies come in below $200,000/employee. The after tax profit per General Electric employee is $29,721/employee. Even if the worst paid employee were to get $11/hr plus 30% benefits, the total compensation package is $28,600/year.

You hear about the fallacy of "price gouging", but the people over at Division of Labout ask, why aren't people talking about "wage gouging" ?

A natural disaster has caused suppliers of labor to charge more for an hour of work than they did before the disaster. If this were gas--or even the Burger King that is hiring the now more expensive workers--there would be howls of "price gouging." If charging $5 for a gallon of gas is "unbridled greed" then isn't demanding a $6,000 signing bonus? That many people view these scenarios differently indicates the real issue here is anti-capitalist animus.

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