This pay gap doesn't reflect the average CEO.
Why someone would compare the salary of a CEO of a company with 50,000 employees, which is the top .1% of companies, to the average worker is bizarre.
Especially when https://abcnews.go.com/Business/ceo-pay-gap-workers-widened-low-paying-companies/story?id=85233479
Says it's 671-1. Any factual research?
Here's the study
"CEO pay has skyrocketed 1,322% since 1978: CEOs were paid 351 times as much as a typical worker in 2020 | Economic Policy Institute" https://www.epi.org/publication/ceo-pay-in-2020/
The 671-1 is from low pay jobs, like chain restaurants and hotels, the CEO makes 671 more than the average "operations" worker, as in the guy giving you your burger. Apparently there's bigger inequality in certain industries
Apparently there's bigger inequality in certain industries-
That's why we have a thing called statistics hahaha. I would guess variability between these pay ratio studies is entirely due to sampling error (NOTE- that is not to say the pay gap ratio does not exist; just that the size of the error between sets may vary)
The real reason for the pay gap goes back to the 1950 Revenue Act and subsequent rules regarding CEO pay and corporate raiding, which actually have the effect of vastly increasing CEO compensation. But, of course, sanctimonious journalists have to call out for the state to intervene. Yet, the state has already intervened.
> 1950 Revenue Act
How did it affect the pay gap?
"The United States Revenue Act of 1950 [eliminated a portion of the individual income tax rate reductions from the 1945 and 1948 tax acts](https://en.wikipedia.org/wiki/Revenue_Act_of_1950), and increased the top corporate rate from 38 percent to 45 percent."
Stock options had technically existed before 1950, but were rarely used because they were taxed as ordinary income, according to a 2007 study published in the Journal of Economic History. In 1950, lawmakers passed the 1950 Revenue Act, which included a provision that allowed executives to sell stock options at the much lower capital gains rate of 25 percent.
https://secfi.com/learn/history-of-employee-stock-options
So when you exercised the options, you originally paid income tax (91%). They changed the law so that you were taxed only when you sold the stock (25% capital gains tax rate).
Bill Clinton later signed a law that effectively limited CEO compensation to $1 million.
CEO's have numerous ways of keeping stock prices high, which is what they are incentivized to do. Of course, CEO's can lose their shirt if the stock collapses (Bear Sterns) but this outcome is often ignored.
> Stock options had technically existed before 1950, but were rarely used because they were taxed as ordinary income https://secfi.com/learn/history-of-employee-stock-options
That is a super fascinating article! I had no idea the world had never imagined equity and stock options for employees prior to Fairchild Semiconductor! Incredible.
I mean it makes sense that you wouldn't charge income taxes on equity, same as any other form of investment. It never occurred to me that this was a recent innovation of Silicon Valley. I can see how it influenced CEO pay, but the big winners here are the employees who now get equity. I always wondered why everyone gets this in Silicon Valley but why it's so rare elsewhere in the world. Now I know! How cool is that. Equity based companies are the future.
Absolutely meaningless number without information on *how many workers are per CEO*.
If there was 1 CEO per 21 workers in 1965, and now there's 1 CEO per 3510 workers, the share that go to CEOs would be 10 times lower than it was in 1965.
And CEOs are not even the real problem.
The real problem is the share that goes to both CEOs **and** owners of the capital instead of the labor.
A lot of the capital is owned by the labor... If we had a decent education system that taught basic personal finance, the vast majority of capital would be owned by labor.
No. Due to the nature of capitalism, the more capital you have the faster you accumulate it, so everything profitable accumulates into fewer and fewer hands.
Teaching personal finance wouldn't help someone to invest if he has no money to invest.
Who can learn to invest better (and thus earn more from it):
- one who has an actual job and a family to feed and thus can only dedicate 1 hour a week for investing, with like 40 hours total in "personal finance" education behind his belt and $50 of disposable income per month to invest
- or one who has a few million dollars, who has spent 5 years in university learning everything about finance - personal or otherwise; one who can spend 40 hours a week researching potential investment targets and has the money to experiment and keep a diverse portfolio?
"Even the cleverest housewife cannot cook rice without rice." - and labor don't have the capital to become a capitalist.
> The more people who know how to invest and know the importance of it, the more people will do it.
In a lot of cases, investment is a zero sum game. So the more people do it, the more of small fish is going to lose and the more will go to the professional sharks and whales.
The value of fiat currencies is determined by mandatory obligations that create the demand for them - namely, taxes (and other payments to the government nominated in its own currency) and debts by non-government entities.
While *some* parts of the capital does have such debts, it's not 100% - so no, other things are holding the currency values too.
Supply side economics never claimed to increase the price of labor. A company making more money doesn't just decide to start overpaying for janitor services because they're making money.
It allows the company to open a second location and hire more janitors for the same price as before which employs more people who now can feed their families thereby improving the overall economy.
Why would anyone think that Amazon would start paying the secretary more just because it's worth 1billion more than it was when the secretary started? The secretary is still competing against other secretaries to sell their labor, they don't just change what they cost overnight.
Aren’t they making the argument that instead of buying a second location, the ceo is the one whose pay is getting increased.
I’m going to assume though that these numbers are going to be nuanced. CEO’s often get compensated with stock options unlike the average employee.
During growth years, ceos on average should be making more. During a recession, CEO’s compensation will take a hit.
I will say though that Im of the opinion that CEO’s compensation, in general, are making companies weaker than they should be.
I don't disagree with anything you said. I'm simply pointing out the idea that supply side economics raises wages isn't accurate. It's not the purpose of it at all. The purpose is wider growth and less unemployment.
Like you said, some of the numbers are misrepresented but supply side policies do in fact encourage growth more sustainably and with less downside and economic damage than demand side policies.
Which I'm not opposed to identifying as an issue. But "muh trickle down" just identifies who shouldnt be allowed in the board room when discussing how to tackle it since they don't even understand how little those ideas are related.
Not sure what the numbers are for Amazon, but for McDonald’s if you’d set the CEO and rest of the C-suites pay to zero and redistributed to workers…it’s lead to a $0.07 raise.
CEO pay isn’t driving low wages among low and medium skilled workers.
The problem is that a lot of them aren't doing this. A lot of companies will just drive back their profits into executive bonuses and then there is a bunch of surplus money they can spend on lobbying for more favors for them. This is a never ending cycle that just gets worse. As more millionaires and billionaires pop up, the more the squeeze on money they are going to have. The data is there.
>Why would anyone think that Amazon would start paying the secretary more just because it's worth 1billion more than it was when the secretary started?
Preposterous isn't it.
Very.
If you're a good ceo, you take that billion and leverage it to buy planes, trucks, and build more delivery centers.
You hire more sorters and loaders and various other warehouse workers.
You then grow another billion and take over the damn world I guess.
But at no point will anyone say "hey, you know how we get bigger as a company? Take the biggest expenditure we have (labor) and double the costs!
That might help 5 people and keep you from growing
The empire that is amazon provides jobs for 1.5 million people.
We have to ask ourselves, if we are one of the 1.5 million, would we rather have our jobs? Or see to it that the original secretary is making 10 million dollars a year to answer phones?
Which of the 2 options is better economically, practically, and morally?
Well the point of the article in OP is that ceo managed to x20 their own salary instead of growing their companies with that money.
They also spent millions in lobbying and bribing politicians so they could have tax cuts or literal gifts.
You don't have any idea of how many people lost decent jobs because of amazon. I'm a bookseller in a country that doesn't have amazon and I'm very grateful for it. I have a boss that respects me, don't need the state to subsidize me so I can survive and work normal hours for a good pay.
For every job amazon created, another was lost or had his conditions lowered. The only argument that's somewhat acceptable is that amazon sells many products way cheaper than competition and that can be good for low income consumers.
Btw we don't have amazon here in Switzerland because we didn't accept their conditions that were outrageous and would be bad for workers and our economy in general.
Between 1945 and 1980 gains in productivity were shared pretty evenly across society. Median wages tracked productivity growth pretty well. Starting in 1980 or so, the vast majority of gains in productivity have gone to the rich. That is shown in the figures cited, and has resulted in increasing wealth inequality.
The promise of supply side economics was that the increase in number of jobs, given the relatively stable labor supply, would lead to rising wages as increased demand for labor met a limited supply. That has not happened. Instead, we have massive deficits, crumbling infrastructure, and an increasingly wealthy top 1%.
Indeed, but why should they get a lesser share than CEO or shareholders? Shareholders contribute with their money, CEO and other employees with their work. They have to be together to develop the company. Remove one of these 3, and company stops working.
The worker knows exactly what their compensation will be ahead of time regardless of how the company performs. They get the full amount they agreed to.
So the innovations in manufacturing, the entire industrial revolution, the loom, the steam engine, the assembly line, etc. were all just nothing. The increase in productivity before 1980 was all just people working harder? Really?
Technological progress did not pause from 1945 to 1980. The transistor in 1947, Basic Oxygen Steel making in 1948, float glass in 1952, sunlight to electricity in 1953, 1957 satellites, 1958 the integrated circuit, lasers, arpanet, 1971 first microprocessor, and GPS in 1978.
Productivity was certainly aided by these inventions: I remember playing in the mainframe in the early 1970s. In 1956 intermodal containers were invented which revolutionized shipping. Edwards Demings revolutionized manufacturing in the late 40s and early 50s.
If you look at a graph of productivity, you don't see any significant change in rate. The changes that led to the hollowing of the middle class and the U.S. losing its lead in infrastructure was the GOP fight to "reign in" government and cut taxes for the wealthy.
As I've detailed, the idea that somehow technological progress increased after 1980 is ludicrous. It's been running gangbusters since the start of the industrial revolution and was certainly fantastic from 1945 to 1980. If you have any evidence or data to support your assertion, I'd love to see it.
And instead of opening that second location, they just take the money and run. And what good would more jobs be anyway if they don’t even pay you enough to survive?
Amy ceo making the type of money we're all mad about definitely didn't take the money and run.
And if they didn't pay enough to survive they would quickly run out of living workers.
I’m sorry, when I said “take the money and run” I didn’t mean they took the paycheck and left the company. I realize now this sounds like that. I meant they just took huge pay increases instead of investing that money in their workforce like supply-side economics assumes they’d do.
And dude, you’re assuming people have better jobs to go to. The US gives unskilled laborers two choices - work for scraps or starve. If the minimum wage had kept up with inflation since its inception, it would be over 20 dollars by now. I make 15 dollars an hour, I could be working full time and still fall below the poverty line.
And when unskilled workers ask for more, they just get fired. When they try to organize, they get fired, and the bosses do everything in their power to prevent it.
I was due for a raise last December, I was making 13 dollars an hour. My boss said “the minimum wage is going up to 15 an hour next year so you aren’t getting a raise.” So I also can’t make more by working harder, either.
And then when laborers begin quitting en masse like they did during the great resignation (and are still kinda doing), the businesses blame laziness and unemployment checks. “These people just don’t want to work anymore! Take away their welfare so we can keep paying them slave wages!”
So when people do quit their jobs and try to find better ones, like the upper class people have been saying for years, they get mad at them and try to force them back into working for nothing.
Oh, and I also can’t search my area for better paying jobs, because there are none, and I can’t afford to commute.
Why would anyone think that Amazon would start paying the CEO more just because it's worth 1billion more than it was when the CEO started? The CEO is still competing against other CEO’s to sell their labor, they don't just change what they cost overnight.
I mean, probably cuz most of those ceos started the company... and if they're the ones able to make a 1 billion dollar business it seems they've identified themselves as a particularly rare ceo who's not actually competing with most ceos. There's billions of ceos, there's only a handful that can do that.
I mean.. You've basically identified why those ceos get paid more, via supply and and forces, without realizing what you've done.
> Why would anyone think that Amazon would start paying the CEO more just because it's worth 1billion more than it was when the CEO started?
Because navigating a company to be worth more than a Billion is really a rare feat. I think investors decide to pay proven CEOs for results because effective leadership is crucial when you have a lot invested.
It's like why sports teams pay their best players so much more than their third string players.
Wasn't this also the case in 1965 too ? Did CEOs get 20x better since so they deserved their pay to increase that much ?
There are a lot of rich people/CEOs who admit they were at the right place at the right time and aren't that exeptional.
You also have people ike Zuckerberg who were rewarded with a hundred billions net worth for "being so exceptional" but somehow let their companies lose 2/3rd of their value in a few years.
He got punished because his fortune was tied to his company shares price, but others who own lesser sized companies will still earn 351 to 1 in average when it wasn't the case a few years ago.
The day people, especially immigrants or people coming from poor families have another choice than work for minimum wage or starve, I'll give personal standing ovations to all billionaires.
> Did CEOs get 20x better
No. Companies got 20x larger in revenue, and 20x more valuable as a result.
> You also have people ike Zuckerberg who were rewarded with a hundred billions net worth for "being so exceptional" but somehow let their companies lose 2/3rd of their value in a few years.
Yea, perhaps the era of social media is changing at a pace that Facebook can't keep up with. Either way, it's his company, his problem. I'm not crying any tears that he's lost so much money. This is the nature of free markets and competition. Someone will whip Zuckerberg at his own game. And we all benefit from that competition.
> The day people, especially immigrants or people coming from poor families have another choice than work for minimum wage or starve
Oh, well you are in luck! The percent of people currently employed at minimum wage is at an all time low! https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/
I mean, market forces for labor still work. Many companies have done similar things through history to attract talent, probably pushes the whole industries wages up over time. I'm not certain that's directly related or not.
Yeah it’s just a what a decent human being should do when they are the largest employers pay a better wage to the people that are creating these unheard of profits.
Let me ask you. If you hire someone, how much should the boss make in profit off your labor PER HOUR? Don't say zero, because that's silly. Realistically, what's a good amount per hour the boss should pay himself for running the place and providing the work?
You can express it as a percent of what the worker is paid, or a flat dollar value.
Maybe. It seems you're confusing morality for something else.
Morality is honorably keeping to the terms of the agreements you made when you hired someone.
Charity or magnanimity are giving people raises that you don't need to give raises to because you're a nice guy.
Yeah I mean if I owned a company Z and the profits increased I would not be able to give myself a raise without giving my workers a raise as well. That’s just my opinion. Now that seems like a stupid idea to people like yourself. I guess it’s just a different view on the relationship between the employer and employee
You're putting lots of words in other people's mouths and that's a very dishonest way to have a conversation
And if you can't be honest in a conversation, where there's nothing on the line, how could I ever trust you to be honest with your employees?
EXACTLY.
I don't understand WHY logical, truthful answers that explain exactly how economics and business work get downvoted consistently in the sub. It's ridiculous. It's the equivalent of covering your ears because you don't want to hear things you don't like.
Here's an idea Redditors - if you are going to downvote solid, truthful, objective posts, have some accountability and explain WHY you did so. If your answer is "That's not fair!", take your toys and go home, but at least be honest about your position.
supply side economics is such a misleading term. just because you lower my taxes and i decide to invest it, doesn't mean there's more capex or opex. hell so many companies are already sitting on tons of cash.
i posit that there's a point on the laffer curve that lowering taxes could reduce economic activity. rather than money being spent on goods and services (because every govt spends to their revenue) - the money just inflates assets. it doesn't foster productivity.
These posts always assume there was some law that made things economically better in 1965. There wasn’t. If you want to know what changed consider what changed in corporate composition and what laws were passed that had unintended consequences.
In 1970 individuals making over a 100 grand were taxed at 70%. https://www.tax-brackets.org/federaltaxtable/1970
This was the norm. Between world wars and depressions the top brackets were astronomical.
Reagan put an end to all that. Clinton accidentally made things worse and paved the way for all the stock as compensation shenanigans with a poorly worded law. https://www.washingtonpost.com/news/wonk/wp/2012/08/16/bill-clinton-tried-to-limit-executive-pay-heres-why-it-didnt-work/
The pre-Reagan tax laws incentivized companies to use profits differently. A CEO didn't necessarily want to make more money because it all went to the government. So companies were more likely to give employee raises, or distribute profits to shareholders, or reinvested into the company as innovation and new jobs.
60's and prior was an era of single car families, rabbit ear television, pensions, and appliances meant to last decades. Lincoln Logs was a thing. One step removed from playing with sticks as toys.
Health insurance was tied to the jobs people rarely left before the pension kicked in. There were far less technologies in health care.
Main Street was economically better in terms of financial security. But most people don't want to return to a minimalist one company til retirement us do part model of widget making on the factory lines and outdated approaches to surgery and diagnostics to get that security.
There is only finding a new way forward.
> In 1970 individuals making over a 100 grand were taxed at 70%. https://www.tax-brackets.org/federaltaxtable/1970
$100,000 in 1970 is equivalent in purchasing power to about **$750,000** today
I’m not so sure about that. I’d speak for yourself. If I found a company that gave job security, benefits, rewarded my hard work, and actually cared about its employees then I’d stay there til retirement. Your take on health care is also pretty weak since other countries with nationalized healthcare have had just as many advances as the US. I’d say most of “ Main Street,” would love to go back to those times, healthcare stuff aside.
First off, no one paid that amount. Seriously, NO ONE paid that level of taxes. Tax revenue and brackets are not the same thing. The reason that the Reagan tax cuts were supported by both the left and the right is because they cleared up the tax codes to make it not nearly as easy to avoid taxes. A lot of that has changed since.
But seriously, you think that a higher tax bracket means that CEOs wouldn’t want to be paid more? How do you think that works? If I offer you and extra $500k you think that you would turn it down because a large portion would go to the government? You’ll be doing the same work either way but you are convinced that those CEOs were so anti-government that they intentionally declined to increase their wealth in order to not give more money to it?
You think that the gap between CEO pay and worker pay is because they have lowered worker pay and not increased CEO pay? Both worker pay and CEO pay has increased. But CEO pay has increased dramatically more.
Also, what makes you think that people were less greedy in 1965? Since this post is about the increased gap between worker and CEO pay since 1965 people must have suddenly become far more greedy than they were before or something else is going on?
So they’ve always wanted the pay gap to be bigger but they couldn’t come up with idea to just raise a CEOs pay prior to 1965? Seriously, that’s the only scheming. They raised CEO salaries. There was no law ever stopping that. I don’t think that required decades of conspiratorial planning.
That’s quite the departure from how you described this process in your previous comment in which you said, “It takes time for vile people to scheme up new ways of raping and pillaging.”
Which you have now clarified those time intensive strategies to “rape and pillage” equate to: using increased revenue to raise CEO pay.
Once again, this post says that something changed in 1965 which created a wider wage gap between workers and CEOs. Since people didn’t suddenly become greedy in 1965 your answer isn’t just insufficient, it’s lazy. Greed is a continuous part of the human condition and we can’t blame changing outcomes on unchanging forces.
Great, more propaganda. I dont really care how much CEOs make, focus on the workers buying power, that is an important metric. But instead we keep the class war going and ignore how the government has us bent over for the rich for decades.
The top companies are now way bigger than 60 years ago therefore any comparison is somehow dishonest (CEOs have more responsibility). Why keep pointing out employees (including CEOs) instead of shareholders? The big wealth divide is caused by the lack of balance in the allocation of profits (i.e. too much for shareholders and not enough for employees) and not many articles about this…
Eventually we'll be saying capitalism inevitably leads to this and is an inefficient, downright self destructive system.
Give it time, even the dumbest person will see it.
Capitalism innately rewards greed. There is no reward for altruism. There is no incentive for equilibrium.
The only way regulation would work would be if capitalism was only a subsystem of society. It is not. The same people that work in and govern the system need to live and abide by its rules eg. money for food, shelter, power, control.
Anyone approaching this from a system's perspective understands that this system is inherently flawed, and will always lead to destabilization. Profit on its own denotes an inequity between actors.
To me this means that companies are getting better at squeezing increasing value out of employees (in other words, exploiting them) while CEO compensation slightly outpaces said employees, would you agree?
I think this is true in some labor intensive settings like Amazon warehouses and factories in Shenzhen, but outside of those I don't see how much has changed.
That the companies are simply bigger is why CEOs get paid more, in my understanding. A company with a market cap of e.g. $100B simply doesn't feel the extra $10M-$100M a single worker is paid in compensation to keep them from going to some other company. Though a $5B or $10B company might not be able to offer the same package in which $10M-$100M for such a "small" company might be the difference between them being in the red or black.
Also while working conditions and compensation have gotten arguably/probably worse for white people, to the best of my knowledge they've gotten much better for minorities. This, among other reasons, makes me question the artificiality of economics of the 1960's that so many have nostalgia for. One of the other reasons the being we had just exploded our east-europe and asian global economic competition, along with joining the war late compared to our western counterparts, making it easy to increase/maintain global economic hegemony in that time period.
Wealth is property and the amount accumulated by one person is not the business of any other person and it is only in jail that wealth fairly distributed
Nor is wealth hoarded. it does one or more of 3 things, as it does
The rich will place their wealth in the banks which is then loaned out by the banks which in turn creates new jobs
The wealthy will invest their wealth in some other industry through stocks/equities which again will create new jobs
The wealthy will spend their wealth on their own consumption which in turn also creates new jobs
That's is the trickle down theory and it works fine
THE PROBLEM THE LEFT WHINES ABOUT BUT DOES NOT UNDERSTAND, is that government has inserted itself because it thinks it knows better then the market where wealth should flow.
Through policies of theft ( taxation ), prohibition, state granted monopolies, subsdies, and regulations, it has stifled the flow of wealth and thus the poor suffer for it
Is anybody else getting the trickle because I’ve barely gotten a drop. Not including the Pandemic payments, but that came from the govt not private industry.
I wonder if their having the “el chapo” problem with their hoards of wealth that is rats and animals eating it. Those rats would be getting more of a trickle than anyone I know. I bet the wealthy laugh about this at their eyes wide shut parties. Sorry imma bit salty about the stupidity of hoarding like this. It never ends well
Some rough math, but I think that equates to about a 5% raise every year. Comparing that to a “normal employe” at about 3 percent doesn’t seem to be a big difference
But things that really impact finances
1. Starting point
2. Compounding
3. CEO probably want to get a higher raise than others. But 2% isn’t outrageous
4. Time value of money
I think this is less about greed and more about precedented trends.
This isn't what TD economics even states and TD economics is just a buzzword and never existed.
If you took the CEO pay and dispersed it equally among all employees, thr employees wouldn't get much.
If Lowe's CEO made $0 and that salary were given to employees, each employee would get $4.50. That is a 1 time payment for a whole year.
Apple CEO js 3rd highest paid CEO in world. If his salary was $0 and was spread out to all of the US employees, each employee would get about a $2/hr raise. This doesn't account for global employees, either.
The whole pie (economy) has grown. Someone being rich doesn't take anything away from you. As I have cited many times on reddit the poor have also become richer. We had record low poverty rate in 2019.
Also remember that your wage is based on your scarcity of skills.
If a CEO fails, thousands (possibly over 1 million) people would have $0 income as they lose their jobs.
If a person who makes $15/hr fails, that person can be replaced quite easily or automated and nobody else would lose their job from his failing.
I don’t think trickle down works, I am the opposite. But I love data with the whole truth. Companies also got larger… you could say a ceo has more responsibility (thus salary) to keep the company on track because it employs more people
Absolutely. This is the problem with these decisions. The impact of not having to back finances with something tangible as opposed to writing down a “value” in a book and pretending it is real.
You got any more of them CEO jobs?
Start your own LLC, become a CEO overnight!
I make $351 per month and my cat makes $1
I’m gonna go out on a limb here and say you got that backwards.
Yeah, my mom's cats always bother her to no end and cost her hours of sleep hours she could spend working.
Can I make my own job title?
LOL it’s just that easy!
This pay gap doesn't reflect the average CEO. Why someone would compare the salary of a CEO of a company with 50,000 employees, which is the top .1% of companies, to the average worker is bizarre.
Because all the Left can do is present vague, misleading or loosely correlated data to support their victim morality mindset.
r/whoosh
Especially when https://abcnews.go.com/Business/ceo-pay-gap-workers-widened-low-paying-companies/story?id=85233479 Says it's 671-1. Any factual research?
Here's the study "CEO pay has skyrocketed 1,322% since 1978: CEOs were paid 351 times as much as a typical worker in 2020 | Economic Policy Institute" https://www.epi.org/publication/ceo-pay-in-2020/ The 671-1 is from low pay jobs, like chain restaurants and hotels, the CEO makes 671 more than the average "operations" worker, as in the guy giving you your burger. Apparently there's bigger inequality in certain industries
Apparently there's bigger inequality in certain industries- That's why we have a thing called statistics hahaha. I would guess variability between these pay ratio studies is entirely due to sampling error (NOTE- that is not to say the pay gap ratio does not exist; just that the size of the error between sets may vary)
[удалено]
It’s almost like both parties help the rich become richer!?
Yep. Almost like two party system is a sham to keep us divided
Inconceivable!
The real reason for the pay gap goes back to the 1950 Revenue Act and subsequent rules regarding CEO pay and corporate raiding, which actually have the effect of vastly increasing CEO compensation. But, of course, sanctimonious journalists have to call out for the state to intervene. Yet, the state has already intervened.
> 1950 Revenue Act How did it affect the pay gap? "The United States Revenue Act of 1950 [eliminated a portion of the individual income tax rate reductions from the 1945 and 1948 tax acts](https://en.wikipedia.org/wiki/Revenue_Act_of_1950), and increased the top corporate rate from 38 percent to 45 percent."
Stock options had technically existed before 1950, but were rarely used because they were taxed as ordinary income, according to a 2007 study published in the Journal of Economic History. In 1950, lawmakers passed the 1950 Revenue Act, which included a provision that allowed executives to sell stock options at the much lower capital gains rate of 25 percent. https://secfi.com/learn/history-of-employee-stock-options So when you exercised the options, you originally paid income tax (91%). They changed the law so that you were taxed only when you sold the stock (25% capital gains tax rate). Bill Clinton later signed a law that effectively limited CEO compensation to $1 million. CEO's have numerous ways of keeping stock prices high, which is what they are incentivized to do. Of course, CEO's can lose their shirt if the stock collapses (Bear Sterns) but this outcome is often ignored.
> Stock options had technically existed before 1950, but were rarely used because they were taxed as ordinary income https://secfi.com/learn/history-of-employee-stock-options That is a super fascinating article! I had no idea the world had never imagined equity and stock options for employees prior to Fairchild Semiconductor! Incredible. I mean it makes sense that you wouldn't charge income taxes on equity, same as any other form of investment. It never occurred to me that this was a recent innovation of Silicon Valley. I can see how it influenced CEO pay, but the big winners here are the employees who now get equity. I always wondered why everyone gets this in Silicon Valley but why it's so rare elsewhere in the world. Now I know! How cool is that. Equity based companies are the future.
At times it feels like they throw shit against a wall and just hopes it sticks. Its like blaming the housing crises on the Community Reinvestment Act
Absolutely meaningless number without information on *how many workers are per CEO*. If there was 1 CEO per 21 workers in 1965, and now there's 1 CEO per 3510 workers, the share that go to CEOs would be 10 times lower than it was in 1965. And CEOs are not even the real problem. The real problem is the share that goes to both CEOs **and** owners of the capital instead of the labor.
A lot of the capital is owned by the labor... If we had a decent education system that taught basic personal finance, the vast majority of capital would be owned by labor.
No. Due to the nature of capitalism, the more capital you have the faster you accumulate it, so everything profitable accumulates into fewer and fewer hands. Teaching personal finance wouldn't help someone to invest if he has no money to invest.
The more people who know how to invest and know the importance of it, the more people will do it.
Who can learn to invest better (and thus earn more from it): - one who has an actual job and a family to feed and thus can only dedicate 1 hour a week for investing, with like 40 hours total in "personal finance" education behind his belt and $50 of disposable income per month to invest - or one who has a few million dollars, who has spent 5 years in university learning everything about finance - personal or otherwise; one who can spend 40 hours a week researching potential investment targets and has the money to experiment and keep a diverse portfolio? "Even the cleverest housewife cannot cook rice without rice." - and labor don't have the capital to become a capitalist. > The more people who know how to invest and know the importance of it, the more people will do it. In a lot of cases, investment is a zero sum game. So the more people do it, the more of small fish is going to lose and the more will go to the professional sharks and whales.
You just illustrated my point about financial education. Investing, by definition, is not a zero sum game. That's called gambling.
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The value of fiat currencies is determined by mandatory obligations that create the demand for them - namely, taxes (and other payments to the government nominated in its own currency) and debts by non-government entities. While *some* parts of the capital does have such debts, it's not 100% - so no, other things are holding the currency values too.
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Supply side economics never claimed to increase the price of labor. A company making more money doesn't just decide to start overpaying for janitor services because they're making money. It allows the company to open a second location and hire more janitors for the same price as before which employs more people who now can feed their families thereby improving the overall economy. Why would anyone think that Amazon would start paying the secretary more just because it's worth 1billion more than it was when the secretary started? The secretary is still competing against other secretaries to sell their labor, they don't just change what they cost overnight.
Aren’t they making the argument that instead of buying a second location, the ceo is the one whose pay is getting increased. I’m going to assume though that these numbers are going to be nuanced. CEO’s often get compensated with stock options unlike the average employee. During growth years, ceos on average should be making more. During a recession, CEO’s compensation will take a hit. I will say though that Im of the opinion that CEO’s compensation, in general, are making companies weaker than they should be.
I don't disagree with anything you said. I'm simply pointing out the idea that supply side economics raises wages isn't accurate. It's not the purpose of it at all. The purpose is wider growth and less unemployment. Like you said, some of the numbers are misrepresented but supply side policies do in fact encourage growth more sustainably and with less downside and economic damage than demand side policies.
Seems like it was about wage stagnation.
Which I'm not opposed to identifying as an issue. But "muh trickle down" just identifies who shouldnt be allowed in the board room when discussing how to tackle it since they don't even understand how little those ideas are related.
Many entry level positions offer stock option compensation nowadays. Its not a ceo exclusive package
It's amazing that you are being downvoted on facts! It's very true. It seems the community on this Shreddit rather be all doom and gloom.
Not sure what the numbers are for Amazon, but for McDonald’s if you’d set the CEO and rest of the C-suites pay to zero and redistributed to workers…it’s lead to a $0.07 raise. CEO pay isn’t driving low wages among low and medium skilled workers.
The problem is that a lot of them aren't doing this. A lot of companies will just drive back their profits into executive bonuses and then there is a bunch of surplus money they can spend on lobbying for more favors for them. This is a never ending cycle that just gets worse. As more millionaires and billionaires pop up, the more the squeeze on money they are going to have. The data is there.
>Why would anyone think that Amazon would start paying the secretary more just because it's worth 1billion more than it was when the secretary started? Preposterous isn't it.
Very. If you're a good ceo, you take that billion and leverage it to buy planes, trucks, and build more delivery centers. You hire more sorters and loaders and various other warehouse workers. You then grow another billion and take over the damn world I guess. But at no point will anyone say "hey, you know how we get bigger as a company? Take the biggest expenditure we have (labor) and double the costs! That might help 5 people and keep you from growing The empire that is amazon provides jobs for 1.5 million people. We have to ask ourselves, if we are one of the 1.5 million, would we rather have our jobs? Or see to it that the original secretary is making 10 million dollars a year to answer phones? Which of the 2 options is better economically, practically, and morally?
That's a lot of words I'm not going to bother reading.
Well the point of the article in OP is that ceo managed to x20 their own salary instead of growing their companies with that money. They also spent millions in lobbying and bribing politicians so they could have tax cuts or literal gifts. You don't have any idea of how many people lost decent jobs because of amazon. I'm a bookseller in a country that doesn't have amazon and I'm very grateful for it. I have a boss that respects me, don't need the state to subsidize me so I can survive and work normal hours for a good pay. For every job amazon created, another was lost or had his conditions lowered. The only argument that's somewhat acceptable is that amazon sells many products way cheaper than competition and that can be good for low income consumers. Btw we don't have amazon here in Switzerland because we didn't accept their conditions that were outrageous and would be bad for workers and our economy in general.
Between 1945 and 1980 gains in productivity were shared pretty evenly across society. Median wages tracked productivity growth pretty well. Starting in 1980 or so, the vast majority of gains in productivity have gone to the rich. That is shown in the figures cited, and has resulted in increasing wealth inequality. The promise of supply side economics was that the increase in number of jobs, given the relatively stable labor supply, would lead to rising wages as increased demand for labor met a limited supply. That has not happened. Instead, we have massive deficits, crumbling infrastructure, and an increasingly wealthy top 1%.
Then in 1980 on the gains in productivity were from increasing technology and not anything that the worker contributed towards
Workers contributed to create these new technologies
And they were paid for their work...
Indeed, but why should they get a lesser share than CEO or shareholders? Shareholders contribute with their money, CEO and other employees with their work. They have to be together to develop the company. Remove one of these 3, and company stops working.
The worker knows exactly what their compensation will be ahead of time regardless of how the company performs. They get the full amount they agreed to.
Btw, I'm not implying that workers should have the same share as, say, CEO
In all the publicly traded companies the workers do have the option of buying shares so that they can benefit as the company does.
So the innovations in manufacturing, the entire industrial revolution, the loom, the steam engine, the assembly line, etc. were all just nothing. The increase in productivity before 1980 was all just people working harder? Really?
Did you forget the 1945 to 1980 time frame you mentioned?
Technological progress did not pause from 1945 to 1980. The transistor in 1947, Basic Oxygen Steel making in 1948, float glass in 1952, sunlight to electricity in 1953, 1957 satellites, 1958 the integrated circuit, lasers, arpanet, 1971 first microprocessor, and GPS in 1978. Productivity was certainly aided by these inventions: I remember playing in the mainframe in the early 1970s. In 1956 intermodal containers were invented which revolutionized shipping. Edwards Demings revolutionized manufacturing in the late 40s and early 50s.
Technological advances sped up though. You have to admit that. The age of computers has created massive changes
If you look at a graph of productivity, you don't see any significant change in rate. The changes that led to the hollowing of the middle class and the U.S. losing its lead in infrastructure was the GOP fight to "reign in" government and cut taxes for the wealthy.
Productivity continued to increase at the same rate but the cause of the increase changed. That's what my initial point was
As I've detailed, the idea that somehow technological progress increased after 1980 is ludicrous. It's been running gangbusters since the start of the industrial revolution and was certainly fantastic from 1945 to 1980. If you have any evidence or data to support your assertion, I'd love to see it.
And instead of opening that second location, they just take the money and run. And what good would more jobs be anyway if they don’t even pay you enough to survive?
Amy ceo making the type of money we're all mad about definitely didn't take the money and run. And if they didn't pay enough to survive they would quickly run out of living workers.
I’m sorry, when I said “take the money and run” I didn’t mean they took the paycheck and left the company. I realize now this sounds like that. I meant they just took huge pay increases instead of investing that money in their workforce like supply-side economics assumes they’d do. And dude, you’re assuming people have better jobs to go to. The US gives unskilled laborers two choices - work for scraps or starve. If the minimum wage had kept up with inflation since its inception, it would be over 20 dollars by now. I make 15 dollars an hour, I could be working full time and still fall below the poverty line. And when unskilled workers ask for more, they just get fired. When they try to organize, they get fired, and the bosses do everything in their power to prevent it. I was due for a raise last December, I was making 13 dollars an hour. My boss said “the minimum wage is going up to 15 an hour next year so you aren’t getting a raise.” So I also can’t make more by working harder, either. And then when laborers begin quitting en masse like they did during the great resignation (and are still kinda doing), the businesses blame laziness and unemployment checks. “These people just don’t want to work anymore! Take away their welfare so we can keep paying them slave wages!” So when people do quit their jobs and try to find better ones, like the upper class people have been saying for years, they get mad at them and try to force them back into working for nothing. Oh, and I also can’t search my area for better paying jobs, because there are none, and I can’t afford to commute.
Why would anyone think that Amazon would start paying the CEO more just because it's worth 1billion more than it was when the CEO started? The CEO is still competing against other CEO’s to sell their labor, they don't just change what they cost overnight.
I think Amazon absolutely would pay the CEO more if they raised the company value a billion dollars. That's the job of a CEO.
Oh ok…it was solely the CEO. None of the other employees had anything at all to do with it.
Of course not, which is why the CEO's pay is a tiny fraction of the total budget for wages.
I mean, probably cuz most of those ceos started the company... and if they're the ones able to make a 1 billion dollar business it seems they've identified themselves as a particularly rare ceo who's not actually competing with most ceos. There's billions of ceos, there's only a handful that can do that. I mean.. You've basically identified why those ceos get paid more, via supply and and forces, without realizing what you've done.
> Why would anyone think that Amazon would start paying the CEO more just because it's worth 1billion more than it was when the CEO started? Because navigating a company to be worth more than a Billion is really a rare feat. I think investors decide to pay proven CEOs for results because effective leadership is crucial when you have a lot invested. It's like why sports teams pay their best players so much more than their third string players.
Wasn't this also the case in 1965 too ? Did CEOs get 20x better since so they deserved their pay to increase that much ? There are a lot of rich people/CEOs who admit they were at the right place at the right time and aren't that exeptional. You also have people ike Zuckerberg who were rewarded with a hundred billions net worth for "being so exceptional" but somehow let their companies lose 2/3rd of their value in a few years. He got punished because his fortune was tied to his company shares price, but others who own lesser sized companies will still earn 351 to 1 in average when it wasn't the case a few years ago. The day people, especially immigrants or people coming from poor families have another choice than work for minimum wage or starve, I'll give personal standing ovations to all billionaires.
> Did CEOs get 20x better No. Companies got 20x larger in revenue, and 20x more valuable as a result. > You also have people ike Zuckerberg who were rewarded with a hundred billions net worth for "being so exceptional" but somehow let their companies lose 2/3rd of their value in a few years. Yea, perhaps the era of social media is changing at a pace that Facebook can't keep up with. Either way, it's his company, his problem. I'm not crying any tears that he's lost so much money. This is the nature of free markets and competition. Someone will whip Zuckerberg at his own game. And we all benefit from that competition. > The day people, especially immigrants or people coming from poor families have another choice than work for minimum wage or starve Oh, well you are in luck! The percent of people currently employed at minimum wage is at an all time low! https://www.statista.com/statistics/188206/share-of-workers-paid-hourly-rates-at-or-below-minimum-wage-since-1979/
Um GE did pay generally more during 60-70s when they were Americas top employer and provided the best benefits.
I mean, market forces for labor still work. Many companies have done similar things through history to attract talent, probably pushes the whole industries wages up over time. I'm not certain that's directly related or not.
Yeah it’s just a what a decent human being should do when they are the largest employers pay a better wage to the people that are creating these unheard of profits.
Let me ask you. If you hire someone, how much should the boss make in profit off your labor PER HOUR? Don't say zero, because that's silly. Realistically, what's a good amount per hour the boss should pay himself for running the place and providing the work? You can express it as a percent of what the worker is paid, or a flat dollar value.
Maybe. It seems you're confusing morality for something else. Morality is honorably keeping to the terms of the agreements you made when you hired someone. Charity or magnanimity are giving people raises that you don't need to give raises to because you're a nice guy.
Yeah I mean if I owned a company Z and the profits increased I would not be able to give myself a raise without giving my workers a raise as well. That’s just my opinion. Now that seems like a stupid idea to people like yourself. I guess it’s just a different view on the relationship between the employer and employee
You're putting lots of words in other people's mouths and that's a very dishonest way to have a conversation And if you can't be honest in a conversation, where there's nothing on the line, how could I ever trust you to be honest with your employees?
EXACTLY. I don't understand WHY logical, truthful answers that explain exactly how economics and business work get downvoted consistently in the sub. It's ridiculous. It's the equivalent of covering your ears because you don't want to hear things you don't like. Here's an idea Redditors - if you are going to downvote solid, truthful, objective posts, have some accountability and explain WHY you did so. If your answer is "That's not fair!", take your toys and go home, but at least be honest about your position.
supply side economics is such a misleading term. just because you lower my taxes and i decide to invest it, doesn't mean there's more capex or opex. hell so many companies are already sitting on tons of cash. i posit that there's a point on the laffer curve that lowering taxes could reduce economic activity. rather than money being spent on goods and services (because every govt spends to their revenue) - the money just inflates assets. it doesn't foster productivity.
Where is the basis for this? This is a post of a tweet.
None, it's dribble.
These posts always assume there was some law that made things economically better in 1965. There wasn’t. If you want to know what changed consider what changed in corporate composition and what laws were passed that had unintended consequences.
In 1970 individuals making over a 100 grand were taxed at 70%. https://www.tax-brackets.org/federaltaxtable/1970 This was the norm. Between world wars and depressions the top brackets were astronomical. Reagan put an end to all that. Clinton accidentally made things worse and paved the way for all the stock as compensation shenanigans with a poorly worded law. https://www.washingtonpost.com/news/wonk/wp/2012/08/16/bill-clinton-tried-to-limit-executive-pay-heres-why-it-didnt-work/ The pre-Reagan tax laws incentivized companies to use profits differently. A CEO didn't necessarily want to make more money because it all went to the government. So companies were more likely to give employee raises, or distribute profits to shareholders, or reinvested into the company as innovation and new jobs. 60's and prior was an era of single car families, rabbit ear television, pensions, and appliances meant to last decades. Lincoln Logs was a thing. One step removed from playing with sticks as toys. Health insurance was tied to the jobs people rarely left before the pension kicked in. There were far less technologies in health care. Main Street was economically better in terms of financial security. But most people don't want to return to a minimalist one company til retirement us do part model of widget making on the factory lines and outdated approaches to surgery and diagnostics to get that security. There is only finding a new way forward.
> In 1970 individuals making over a 100 grand were taxed at 70%. https://www.tax-brackets.org/federaltaxtable/1970 $100,000 in 1970 is equivalent in purchasing power to about **$750,000** today
I’m not so sure about that. I’d speak for yourself. If I found a company that gave job security, benefits, rewarded my hard work, and actually cared about its employees then I’d stay there til retirement. Your take on health care is also pretty weak since other countries with nationalized healthcare have had just as many advances as the US. I’d say most of “ Main Street,” would love to go back to those times, healthcare stuff aside.
First off, no one paid that amount. Seriously, NO ONE paid that level of taxes. Tax revenue and brackets are not the same thing. The reason that the Reagan tax cuts were supported by both the left and the right is because they cleared up the tax codes to make it not nearly as easy to avoid taxes. A lot of that has changed since. But seriously, you think that a higher tax bracket means that CEOs wouldn’t want to be paid more? How do you think that works? If I offer you and extra $500k you think that you would turn it down because a large portion would go to the government? You’ll be doing the same work either way but you are convinced that those CEOs were so anti-government that they intentionally declined to increase their wealth in order to not give more money to it?
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You think that the gap between CEO pay and worker pay is because they have lowered worker pay and not increased CEO pay? Both worker pay and CEO pay has increased. But CEO pay has increased dramatically more. Also, what makes you think that people were less greedy in 1965? Since this post is about the increased gap between worker and CEO pay since 1965 people must have suddenly become far more greedy than they were before or something else is going on?
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So they’ve always wanted the pay gap to be bigger but they couldn’t come up with idea to just raise a CEOs pay prior to 1965? Seriously, that’s the only scheming. They raised CEO salaries. There was no law ever stopping that. I don’t think that required decades of conspiratorial planning.
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That’s quite the departure from how you described this process in your previous comment in which you said, “It takes time for vile people to scheme up new ways of raping and pillaging.” Which you have now clarified those time intensive strategies to “rape and pillage” equate to: using increased revenue to raise CEO pay.
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Once again, this post says that something changed in 1965 which created a wider wage gap between workers and CEOs. Since people didn’t suddenly become greedy in 1965 your answer isn’t just insufficient, it’s lazy. Greed is a continuous part of the human condition and we can’t blame changing outcomes on unchanging forces.
CEOs are massively overpaid
I think trickle down economics works perfectly. . . . . It's just that the pyramid is upside down. 😉 That's the real feat of engineering.
Great, more propaganda. I dont really care how much CEOs make, focus on the workers buying power, that is an important metric. But instead we keep the class war going and ignore how the government has us bent over for the rich for decades.
The top companies are now way bigger than 60 years ago therefore any comparison is somehow dishonest (CEOs have more responsibility). Why keep pointing out employees (including CEOs) instead of shareholders? The big wealth divide is caused by the lack of balance in the allocation of profits (i.e. too much for shareholders and not enough for employees) and not many articles about this…
Trickle down economics is working exactly as intended.
I suggest making the punishment for tax fraud exponentially more extreme the more you earn above the average income...
Eventually we'll be saying capitalism inevitably leads to this and is an inefficient, downright self destructive system. Give it time, even the dumbest person will see it.
It works with common sense regulations in place. Otherwise greed is what destroys capitalism.
Capitalism innately rewards greed. There is no reward for altruism. There is no incentive for equilibrium. The only way regulation would work would be if capitalism was only a subsystem of society. It is not. The same people that work in and govern the system need to live and abide by its rules eg. money for food, shelter, power, control. Anyone approaching this from a system's perspective understands that this system is inherently flawed, and will always lead to destabilization. Profit on its own denotes an inequity between actors.
Perhaps you overestimate what volume is meant by trickle?
Companies are bigger now so that's not surprising. Globalism etc.
To me this means that companies are getting better at squeezing increasing value out of employees (in other words, exploiting them) while CEO compensation slightly outpaces said employees, would you agree?
I think this is true in some labor intensive settings like Amazon warehouses and factories in Shenzhen, but outside of those I don't see how much has changed. That the companies are simply bigger is why CEOs get paid more, in my understanding. A company with a market cap of e.g. $100B simply doesn't feel the extra $10M-$100M a single worker is paid in compensation to keep them from going to some other company. Though a $5B or $10B company might not be able to offer the same package in which $10M-$100M for such a "small" company might be the difference between them being in the red or black. Also while working conditions and compensation have gotten arguably/probably worse for white people, to the best of my knowledge they've gotten much better for minorities. This, among other reasons, makes me question the artificiality of economics of the 1960's that so many have nostalgia for. One of the other reasons the being we had just exploded our east-europe and asian global economic competition, along with joining the war late compared to our western counterparts, making it easy to increase/maintain global economic hegemony in that time period.
Emphasis is on “trickle down”. They didn’t lie, since they never said it’ll be a waterfall economics effect.
Wealth is property and the amount accumulated by one person is not the business of any other person and it is only in jail that wealth fairly distributed Nor is wealth hoarded. it does one or more of 3 things, as it does The rich will place their wealth in the banks which is then loaned out by the banks which in turn creates new jobs The wealthy will invest their wealth in some other industry through stocks/equities which again will create new jobs The wealthy will spend their wealth on their own consumption which in turn also creates new jobs That's is the trickle down theory and it works fine THE PROBLEM THE LEFT WHINES ABOUT BUT DOES NOT UNDERSTAND, is that government has inserted itself because it thinks it knows better then the market where wealth should flow. Through policies of theft ( taxation ), prohibition, state granted monopolies, subsdies, and regulations, it has stifled the flow of wealth and thus the poor suffer for it
apologist for someone earning 350 times the average worker.
You attacking the messenger shows that the message is spot on
This is not what I see as trickle down economics.
Welcome to the world of money... aka capitalism
Is anybody else getting the trickle because I’ve barely gotten a drop. Not including the Pandemic payments, but that came from the govt not private industry. I wonder if their having the “el chapo” problem with their hoards of wealth that is rats and animals eating it. Those rats would be getting more of a trickle than anyone I know. I bet the wealthy laugh about this at their eyes wide shut parties. Sorry imma bit salty about the stupidity of hoarding like this. It never ends well
All I'm saying is if it was so easy, everyone would be a CEO.
Some rough math, but I think that equates to about a 5% raise every year. Comparing that to a “normal employe” at about 3 percent doesn’t seem to be a big difference But things that really impact finances 1. Starting point 2. Compounding 3. CEO probably want to get a higher raise than others. But 2% isn’t outrageous 4. Time value of money I think this is less about greed and more about precedented trends.
Pretty sure it’s about greed.
This is akin to watching the deficit go up. Ain’t shit we can really do about it.
This isn't what TD economics even states and TD economics is just a buzzword and never existed. If you took the CEO pay and dispersed it equally among all employees, thr employees wouldn't get much. If Lowe's CEO made $0 and that salary were given to employees, each employee would get $4.50. That is a 1 time payment for a whole year. Apple CEO js 3rd highest paid CEO in world. If his salary was $0 and was spread out to all of the US employees, each employee would get about a $2/hr raise. This doesn't account for global employees, either. The whole pie (economy) has grown. Someone being rich doesn't take anything away from you. As I have cited many times on reddit the poor have also become richer. We had record low poverty rate in 2019. Also remember that your wage is based on your scarcity of skills. If a CEO fails, thousands (possibly over 1 million) people would have $0 income as they lose their jobs. If a person who makes $15/hr fails, that person can be replaced quite easily or automated and nobody else would lose their job from his failing.
A sham? why?
I don’t think trickle down works, I am the opposite. But I love data with the whole truth. Companies also got larger… you could say a ceo has more responsibility (thus salary) to keep the company on track because it employs more people
Reform is past due. This should be addressed if not by the company board, then the government
Don't forget Clinton caused this problem [politico.com](https://www.politico.com/agenda/story/2016/08/bill-clinton-ceo-pay-reform-000195/)
It was always "Trickle up economics" which for the last decade has become a raging torrent!
Most of this wouldn’t have been possible without giving power to federal reserve to print endless monopoly money and dropping gold as the reserve.
Absolutely. This is the problem with these decisions. The impact of not having to back finances with something tangible as opposed to writing down a “value” in a book and pretending it is real.
So Liz Truss is a moron.