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Home Publications Blogs Beat the Press Do Companies Really Not Know What They Pay Their Workers?

Do Companies Really Not Know What They Pay Their Workers?

Friday, 12 August 2011 05:11

The Post seems to think that this may be the case. In reference to a provision of the Dodd-Frank financial reform bill that requires companies to publish the ratio of top executive pay to the pay of an ordinary worker it reported that "businesses have argued that this proposal would be costly and impractical to implement."

This would only be true if businesses had no clue about either how much they pay their top executives or their ordinary workers. While it certainly seems to be the case that the top management of many corporations is not very competent, it is difficult that so many people earning 7 and 8 figure salaries could be that incompetent.

Comments (3)Add Comment
companies keep workers in the dark
written by Tom, August 12, 2011 9:00
Companies don't just track the pay of their workers, they track how much of the pay goes into various categories of activities, for among other purposes, to get R&D tax credits.

The main reason that companies object to this is that they don't want workers to know what other workers make. It can be hard to keep a lid on this, but they will try.
Isn't it ironic?
written by Jay, August 12, 2011 9:14
Remember the plea that they needed more money to attract the best and brightest. It's interesting they can concoct these elaborate technical financial methods to spread risk throughout the globe but argue they cannot do a simple inventory of their payroll. Typical. Money is no object until it involves transparency.
written by John, August 12, 2011 2:13
Well, the pay for workers is down in the roundoff noise and so the payroll computers would need to be reprogrammed to calculate a fraction of the total payroll that small which might lead to a Y2K-like catastrophe.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.