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H1b Ruined Economy
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| 12/26/02
| FlyingA
Posted on 12/26/2002 9:38:29 AM PST by FlyingA
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To: 1rudeboy
I still think that the total number of H-1B visa holders is being over-stated on this thread. Correct, there are not 4 million holders of H1-B visas, I apologize for causing any confusion there. The number of certified H1-B visa requests reached that number in Oct 2001. See 45
To: optimistically_conservative
<>But then, if we knew how to do it perfectly, what fun would capitalism be?</I> That is a great point! Nicely put.
82
posted on
12/26/2002 7:01:36 PM PST
by
TopQuark
To: gcraig
How the hell do we compete with that? At the personal level, it is a difficuly answer to give, but one competes just like in any other industry: improvement and, if necessary paycuts.
Become more managerially aware by taking management courses at night; go to workshops that teach new SD tools; branch out EARLY into new languages and dialects being developed. Finally, develop new ideas and, if they are not taken up by your employer, start your own company: software is almost unparalleled in terms of the absecne of barriers to entry.
What is not right, however, is the expectation of $100/hour developed in 1990s, whereas a Ph.D. in mechanical engineering with 20 years of experience makes only $95K/year. When people do not want to take paycuts --- this is more typical in the unionized shops, of course --- the companies prefer to lay off or sell themselves, lock stock and barrel.
83
posted on
12/26/2002 7:08:02 PM PST
by
TopQuark
To: TopQuark
What I mean is, use economics but apply common sense as the catch all to check the logic.
Inflation is not caused by workers demanding higher wages. This is a popular misconception.
The money has to be printed before it can enter circulation, for example, to pay the wages. There would not be pressure for higher wages if money in circulation were not consistently and predictably devalued. Printing money causes inflation, not demand for higher wages.
84
posted on
12/26/2002 7:08:06 PM PST
by
SteveH
To: TopQuark
Become more managerially aware by taking management courses at night; go to workshops that teach new SD tools; branch out EARLY into new languages and dialects being developed. Finally, develop new ideas and, if they are not taken up by your employer, start your own company: software is almost unparalleled in terms of the absecne of barriers to entry. Sound advice.
What is not right, however, is the expectation of $100/hour ...
Which brings me back to CEO/CFO greed.
According to a study from William H. Mercer, an executive pay consulting firm, the average total direct compensation (salary and bonus plus long-term incentive grant values) for CEOs was $5.2 million in 2000, up 13.7% from the previous year. (*)
There is not a shred of evidence that significant compensation of executives has really improved company performance across America. What's probably going to happen now, in reforms, just like companies have their annual accounting audits and their tax audits. What's going to happen now is that there's going to be a performance audit as compared to pay. We've looked at companies now for some years and we've done these executive report cards. (*)
Currently, "a CEO who gets a bonus or profit sharing [worth tens of millions of dollars] in 1999 for good results doesn't have to give any money back when profits turn down in 2000 or 2001," Lewin says. "There's something wrong with that picture." (1)
CEO Stats: Compensation
- 87% of CEOs say they are fairly compensated, 2% say they're overpaid and 11% say they're underpaid (Fortune, November 18, 2002)
- A good CEO is worth less than $3 million ($2,846,671) in total annual compensation (i.e., base salary plus annual bonus) according to a recent study conducted by Burson-Marsteller and Wirthlin Worldwide. (Burson-Marsteller press release, October 22, 2002)
- CEOs in Biotechnology companies average $513,000 in salary and bonus compensation. (BioWorld Executive Compensation Report 2003)
- Today's top chief executives earn more than 60 times as much as President Bush. (The Washington Post, October 2, 2002)
- The base pay for chief executives fell 15 percent in the first half of 2002. CEOs also lost 43 percent in bonuses for an overall decrease of 23 percent, according to a survey by Christian & Timbers. (The Boston Globe, September 8, 2002)
- In 2000, a CEO earned more in one work day than what an average worker earned in 52 weeks, according to the Economic Policy Institute. This ratio fell in 2001, but remains above historical levels. (The Boston Globe, August 4, 2002)
- On average American bosses take home pay packets that are 475 times more than their workers. This survey conducted by Towers Perrin, of S&P 500 leading companies, found that CEOs in America receive more pay relative to workers on the factory floor than any other country.(Management Magazine June 6, 2002)
- CEOs of large corporations made 411 times as much as the average factory worker in 2001. (Business Week May 6, 2002)
- In the past ten years, average wages increased 36%. For CEOs, it was 340%. (Business Week May 6, 2002)
- In 2000, CEO compensation was 531 times that of the average worker. In 1980, CEO compensation was 42 times that of the average worker. (Business Week April 22, 2002)
- The average compensation for chief executives declined 8 percent to $15.5 million, according to a survey of 200 large companies conducted for Money & Business by Pearl Meyer & Partners. (The New York Times, April 7, 2002)
- One out of five CEOs received no bonus in 2001and the typical bonus fell 23 percent, according to Pearl Meyer. (The New York Times, April 7, 2002)
- CEOs in other countries are increasingly compensated with a mix of salary, benefits and long-term incentive programs that mirrors that of American bosses, according to a recent study from New York consulting firm Towers Perrin. American CEOs are still paid more than anybody in the world. (Chief Executive, March 2002)
- In an executive-compensation survey of 50 large companies overall pay for the nation's top CEOs fell 4% in 2001, with the average CEO earning $10.46 million, according to Pearl Meyer & Partners consultant. (Business Week, March 18, 2002)
- On average CEOs earn 66% more when their pay is tied to performance. That works out to be $406,000 a year for CEOs of companies that use corporate performance measures, compared to $244,000 for companies with no performance measures, according to a study of 273 companies in the Toronto region. (National Post, February 25, 2002)
- Salaries and bonuses of CEOs dropped a median of 2.9% to $1.24 million, according to a William M. Mercer Inc. survey of 100 companies' proxy statements. (The Asian Wall Street Journal, March 6, 2002)
- Median salaries and bonuses slipped 7.7% to $1.32 million last year, while pay and potential gains from stock options grants boosted overall compensation 24% to a median $10.2 million, according to an exclusive USA Today and Investor Responsibility Research Center (IRRC).
- Base salaries for the top dogs continued to rise, up 6% through June 15, but are well short of the standard 15% increase recorded from 1999 to 2000. (Los Angeles Times, July 15, 2001)
- Only three of the 30 highest-paid female executives of 2000 occupied the corner office. (Business Week, April 23, 2001)
- The average CEO earned $13.1 million in 2000. Cash compensation for the CEOs at 365 of the largest U.S. companies increased 18%in 2000, while total pay increased 6.3%. Salaried workers received a 4.3% pay hike. (Business Week, April 16, 2001)
- The average CEO pay in the U.S. has risen from 42 times the average blue-collar worker's salary in 1980 to 475 times the average blue-collar workers' salary in 1999, according to the AFL-CIO. (Chief Executive, February 2001)
To: TopQuark
In case your interested, the average CEO compensation works out to almost $600/hour if he worked 24/7/365.
Kinda makes you wonder, doesn't it?
To: optimistically_conservative
TQ:
What is not right, however, is the expectation of $100/hour ... OC:
Which brings me back to CEO/CFO greed. I am sorry if I did not make that point absolutely clear: the salary of programmers, with small barriers to entry into the profession --- to put is bluntly, you have a great pool of them --- us unsustainable.
In contrast, CEOs is the market for talent, which is very thin. You can make the same comparisons of escalation of salaries of basketball players and movie stars. Incidentally, when was the last time you heard people complain about an excuse for an actor, Sandler, getting $30M per movie?
In other words, the structure of our industry and supply of talant is such that the CEO salaries escalated. The same forces are at play here as in the case of programmers: people are trying to get MBA degree en masse; after some time, the ranks of middle managers will be saturated (might take a while).
Comparisons with the average worker's salary is the Marxist theory of value; it is the favorite criterion in Europe.
As for the compensation-performance association, it is a difficult issue even to agree on what constitutes performance. The options are designed to align the interests of the manager with those of the firm --- so-called agency problem. Compensation is explained mostly not by perfromance but by the thin supply of talent in the economy that exploded in 1990s.
87
posted on
12/26/2002 7:59:30 PM PST
by
TopQuark
To: TopQuark
I saw this argument in a 1999 paper by Jay Lorsch.(
* If the stadium and team aren't subsidized with my tax money, and they can find enough people to pay the money to advertise/watch them perform, I have no problem with athletes/actors/owners etc. making as much as they want. Adam Sandler's movie bombs - his salary take on the next one goes down.
That's not what the CEO does. In fact, the athlete/actor is more comparable to the factory worker than the CEO. The team owner/production studio is the CEO in your analogy. The CEO's talent is not comparable to an athlete's or an actor's. And CEO's are not held responsible for poor performance monetarily. At least they haven't been over the past 2 decades.
However, if there is a shortage in the CEO talent pool here in America - I suggest we open THAT field to H1-B applications immediately. Of course, we will need to take care of the cronyism in the boards first.
Comparisons with the average worker's salary is the Marxist theory of value; it is the favorite criterion in Europe.
Greed good ... personal responsibility bad.
To: optimistically_conservative
Does not make me wonder a single bit. Just compute the salary of Michael Jordan per second. Or, as I already mentioed, Sandler: he gets $5M per week.
People do not wonder about the latter because they attribute the salary to talent. When it comes to management, however, most assume that managers are there by being political and no talant is required. That's just a misunderstanding of management; when viewed as talant much like actors and basketball players, there is nothing surprising or unusual happening in the market for CEOs.
89
posted on
12/26/2002 8:16:40 PM PST
by
TopQuark
To: TopQuark
the salary of programmers, with small barriers to entry into the profession --- to put is bluntly, you have a great pool of them --- us(sic) unsustainable. Explain to me again the need for H1-B programmers?
To: optimistically_conservative
That's not what the CEO does. In fact, the athlete/actor is more comparable to the factory worker than the CEO. The team owner/production studio is the CEO in your analogy. The CEO's talent is not comparable to an athlete's or an actor's. And CEO's are not held responsible for poor performance monetarily. At least they haven't been over the past 2 decades. I an not sure I understood this point. Could you please explain when you have a chance?
91
posted on
12/26/2002 8:21:44 PM PST
by
TopQuark
To: optimistically_conservative
H1B programmers satisfy the immediate, short-term need addressing shortage at a particular skill level. High salaries attract more people into the area and, after few years, the increased supply brings down the salaries. Two different time scales, no contradiction.
92
posted on
12/26/2002 8:24:05 PM PST
by
TopQuark
To: TopQuark
People do not wonder about the latter because they attribute the salary to talent. When Jordan or Sandler start laying off people by the thousands while they're collecting millions displaying their talent...I'll bitch about them too.
When it comes to management, however, most assume that managers are there by being political and no talant is required.
I could have told you Jeffrey Skilling was a crook years ago. And I was sick to read about genious Fastow's creative financing skills when he was top dog.
When boards hire CEOs based on talent and long term health of the corporations - these CEOs don't receive exhorbitant compensation. When they do receive exhorbitant compensation it is exactly because managers are there by being political and no talant is required.
You can sit with these guys and know if they are more interested in what's good for their companies and their workers, or what's good for themselves. Good business skills is almost an anathema to self-promoting celebrity CEOs.
You want to get rich on the excesses of American entertainment - do it in sports or Hollywood but stay outside of the board room where serious work is done.
To: TopQuark
Could you please explain when you have a chance? An actor or athlete is less interested in the long term viability of the "corporation" than his own compensation based on his marketability as a celebrity - well that does describe the worst CEOs out there.
But the athlete/actor is not responsible for the high level management/financing of the entire organization, or the livelihood of the other employees. He is the product, or the producer of the product.
The CEO doesn't produce anything. He is the person responsible for the high level management/financing of the entire organization, AND the livelihood of all the employees.
To: TopQuark
Two different time scales, no contradiction. So the continue application for H1-B programmers while programmer unemployment is rising and salaries falling is unrelated in your book?
To: optimistically_conservative
SOrry, cannot agree with a word you said in this one.
96
posted on
12/26/2002 8:48:59 PM PST
by
TopQuark
To: optimistically_conservative
application for H1-B programmers while programmer unemployment is rising and salaries falling is unrelated in your book? OC, I thought I already clarified that point: you are relying on aggregate data, whereas H1B addresses specific pockets of the programmers market. You can have a fall in the aggregate and a rise in one stratum.
97
posted on
12/26/2002 8:51:05 PM PST
by
TopQuark
To: TopQuark
SOrry, cannot agree with a word you said in this one. Somehow, that doesn't surprise me. It also doesn't surprise me that CEOs and their worshippers would chose celebrity athletes and actors to compare themselves to.
To: optimistically_conservative
OK, I understand you better.
The CEO doesn't produce anything.
That is a common misconception of services. He renders a service to the firm, wihhc is perishable but critical.
He is the person responsible for the high level management/financing /marketing/operations/personel/....
of the entire organization, AND the livelihood of all the employees. Exactly. He must therefore be paid considerably more than Michael Jordan, but he is not.
99
posted on
12/26/2002 8:55:39 PM PST
by
TopQuark
To: TopQuark
I don't disagree with that.
Now, where is the specific pocket filled by H1-Bs that is not available in the American marketplace?
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