Growth Plate
Within the past decade, their have been unforeseen changes in business practices, production and pricing amongst different goods and departments. For example, in 2014 a house located off of Sunset Blvd in the Hollywood Hills sold for over 70 million dollars to the creator of Minecraft, not to mention the playboy mansion was sold for over 100 million dollars as recently as 6 months ago. Currently there are a number of houses for sale in Beverly Hills, and other locations where the asking price is as high as 150 million (Carolwood Area). Where as housing prices have exploded, some other goods have actually gone down in price, like clothes. Currently more clothes are being produced than ever before, as there’s been a growing trend towards having 152 different seasons a year, which means more production, and although costs have not gone down, the price still has. This can be credited to a number of reasons, one of which is the use of sweatshops. This trick, called outsourcing, is favored amongst the heads of certain companies because it ultimately erases any liability they may have, meaning if anything goes wrong in a Chinese or Bangladesh sweat shop, chances are no one in America will hear about it and the head of the company won’t have to deal with any consequences. Don’t be fooled though, having factories similar to sweatshops that don’t abide by hour and wage laws are not only a foreign thing, in fact they’re fairly common in the Los Angeles area. There is estimated to be over 3000 factories and 120,000 garment workers in Los Angeles, and over 2/3 of those factories are paying their workers well below minimum wage and in working conditions that are not safe and don’t abide by hour laws. This is happening in Los Angeles because the heads of companies can find here exactly what they’re looking for abroad, employing undocumented immigrants, who won’t complain about their lack of pay. Chances are no one in that sweat shop will ever be able to buy a house in Beverly Hills for 150 million but perhaps the CEO’s could.
In the 1970’s all the way to the 2000’s it would be unheard of for a house to be priced anywhere close to 40 million, yet alone 70 and so on. Clearly the growth rate on house’s has risen tremendously. The growth rate is a useful tool in economics because it shows how things have improved, or gotten worse, and most importantly, can be a great indicator of inequality.
So let me ask you, since the 1970’s, in terms of inequality, have things been getting better or worse. The true answer is crazy. And not in a good way.
Since 1978, ‘CEO compensation’ have grown over 700 percent. Perhaps you expected that. But here’s where the craziness comes in. The average workers compensation, during the same period has only grown 5 percent. Woah. It doesn’t end there though. Between 1930 and 1970 the average fortune 500 CEO’s salary increased by 4 percent, since 1970, their salary has increase by 686 percent. What the…. Furthermore, in 1978, CEO’s salaries were about 25 times the average employee, today their salary is nearly 209 times the average worker’s.
Still not convinced things are a bit off? Well lets compare ourselves to other countries. In Canada the ratio of pay for CEO’s to average workers is 20:1, in Japan its 11:1 and in Mexico 47:1. In the US of A it is 475:1.
All of this has got me thinking, if CEO’s keep exporting jobs to make extra profit, why don’t we start considering shipping the CEO’s jobs to Bangladesh, perhaps they could learn a thing or two.
