Title: U.S. CEOs Who Outsource Get Bigger Pay Hike-Survey
Author: Andrea Hopkins
Summary: A study by the liberal Institute for Policy Studies shows that CEOs at U.S. companies receive more compensation when outsourcing.
Chief executives at U.S. companies that shipped jobs overseas won a 46 percent pay hike last year, more than five times the average CEO raise. If the U.S. minimum wage had increased as quickly as CEO pay has since 1990, it would be $15.76 an hour instead of the current $5.15. CEO pay overall was 301 times higher than the $26,899 earned by the average production worker. The pay for CEOs who outsource was about 3,300 times the pay of an Indian call center employee or 1,300 times that of an average Indian computer programer. More than 3 million service jobs are predicted to move offshore by 2015.
See Marx's theory of Surplus Value and Ricardo's "Iron Law of Wages".
In precis, an employer that introduces new machinery that will double the output of the worker in a day. Does the employer then double the wages of the worker? Not at all; the employer keeps the surplus value (the additional profit received for additional output) and the salary of the worker remains a constant.
According to the Institute for Policy Studies, the institute that conducted this research, "The fact that leading outsourcers make more money than average CEOs is one more reflection of a perverse system that rewards executives for making decisions that may improve their bottom line while hurting workers and communities".
This "perverse system" is capitalism. The excess salary received by CEOs who outsource is the surplus value of moving work off shore.
In practice there must be a measure of surplus value allowed to those who take the risk to open and run a business. The employer who takes the risk is worth more than the employee who labours without risk. Risk is worth a reward. To support a system that denied this would be to support a lessening of the incentive for competition proportionally to the lessening of the reward for risk. With no chance of receiving reward for risk, no risk would be taken.
Is a CEO who earns 3300 times more than an employee taking excess surplus value? An employer who takes an excessive amount of surplus value is guiltly of exploitation.