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When it Comes to Finding Workers, CEOs Suddenly Forget ‘Free Market’ Principles

When it Comes to Finding Workers, CEOs Suddenly Forget ‘Free Market’ Principles

 

Written by Adele Stan, AFL-CIO

Examining the complaints of some CEOs that they just can’t find qualified workers, economist Dean Baker lays waste to that argument on several fronts, most notably the CEOs’ apparent inability to apply the laws of supply and demand to fulfilling their stated workforce goals.

Baker, who co-directs the Center for Economic and Policy Research (CEPR), first crunches some data to show that, in fact, the ratio of unfilled jobs to employment is “down by almost a third from its pre-recession level,” Baker reports in a column titled, “A Generation of CEOs Who Don’t Know How to Raise Wages.” He writes:

According to standard economics, when businesses can’t fill job openings, they are supposed to offer higher wages. If these businesses offered higher wages, then they could lure away workers from their competitors…If these CEOs raised wages high enough, then these workers would be willing to work for their companies.

[...]

Since it would be rude to imply that CEOs are not being honest when they complain about the lack of skilled workers, we should assume that they don’t know how to raise wages. This is a problem that could be easily remedied. The government could offer short courses to CEOs and other top executives that would teach them how to raise wages and why this would be beneficial to their firms.

Of course, CEOs aren’t total strangers to methods of upping compensation packages — when it comes to their own, that is. The AFL-CIO annual PayWatch data shows that in 2010, CEOs of the largest companies received, on average, $11.4 million in total compensation last year.  Overall, CEOs of the 299 companies in the AFL-CIO Executive PayWatch database received a combined total of $3.4 billion in pay in 2010, enough to support 102,325 jobs paying the median wages for all workers.

In 1964, the apex of performance of the economy, CEO pay relative to average wage-earners was 24 to 1. Now it is 340-1.

This post was originally published on the AFL-CIO blog.

 

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Photo from ToGa Wanderings via flickr

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50 comments

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4:53AM PDT on Nov 3, 2011

Thanks for the article.

8:16PM PDT on Nov 1, 2011

The workers need to be paid what the CEOs make...then they won't have a problem filling jobs!!

11:02PM PDT on Oct 31, 2011

CEOs are psychopaths - looking for other psychopaths for those unfilled jobs

1:54PM PDT on Oct 31, 2011

Andrew C. I like your idea about the paper shredder.....

1:42PM PDT on Oct 31, 2011

What are they going to do when nobody can afford their product anymore because nobody has a job and nobody is making a decent wage? Wake up 1% before its too late.

1:33PM PDT on Oct 31, 2011

Actually, the reason CEOs are leaving open jobs unfilled is because it allows them to get larger bonuses by having lower cost of operation for any given quarter, half year, year, etc.

The CEOs don't have to do the actual work.

CEOs don't care how it gets done, but threaten already overworked workers with firing if they don't get their work done.

The result being that the CEOs look good for bonuses even though they are scumbags that need to be run through the paper shredder by their employees.

1:09PM PDT on Oct 31, 2011

CEO's in the past were expected to KNOW how businesses operate and have some degree to show that they do. NOW, they are simply YES men paid to have no morals or ethics and are just cold hit-men who have no problems destroying hundreds or thousands of lives to benefit a handful of greedy, morally bankrupt losers who are afraid to actually work to make their money.

12:38PM PDT on Oct 31, 2011

Richard M. I have used that word often but I don't think most people know what the discription of a sociopath is. These people certainly fit the discription.

12:13PM PDT on Oct 31, 2011

Sociopath is the kindest word that I can grasp.... Don't be a Tea-Baggie or Koch Sucker...

12:06PM PDT on Oct 31, 2011

A lot of these people are would be slave owners if it was leagel today.

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