Montag, 17. September 2012

Demand ! the responsibility

Money (Source: Wikipedia, public domain)

What defines how much people earn?

Why do some people earn the worth of a luxury yacht per month,
whilst others barely can buy enough food for their family?

Let's first point out some things which are *not* the reasons for earning a lot:

  • working hard
  • working a lot
  • doing stuff which is valuable for the society

Of course, working hard and working a lot might be a necessary ingredient for some career paths where large paychecks can be picked up, but it certainly is not a garantee. There are many people which do work hard and a lot, but earn too little to live and too much to die. If doing stuff which is valuable for the society would make you earn more, nurses, teachers, social workers, etc. would earn loads of money. But they don't.

A good education backed up with a university degree will probably increase your income compared to people doing similar things as you but who don't have that degrees. Education is a factor, probably an important one to decide in which salary band you will move around. But education is not the dominating factor which determines if you are going to earn well or if you are really earning a lot.

The dominating factors

Be close to the source

What seems to be the dominating factor on income is the closeness to the source. And the source is the stream of money. People in financial "industry"---as if this kind of work had ever deserved the denomination industry---earn on average much much more than the rest of the population. It's because they are close to the stream of money and have the possibility to deviate a fraction of this stream into their pockets. But it is not just like "hey, they are doing a good job and that's why they get their big bonuses". As it has been again demonstrated in the recent crisis, when the big financial companies win, they win, and they pay the big bonuses. When they loose, they convince the politicians to pay them their losses with tax payers money. And since they were so efficient in getting the tax payers money, the bonuses are as high as ever. The mantra of investment banks etc. could be something like: "If we win, we win big and you get nothing. If we loose, you loose big because you pay our losses such that we win again". Either way, they win and you (hello fellow tax payer) and I, we loose. If these companies would have held responsible for their losses, maybe they would be a little bit more careful the next time. But since everything went so smooth for them, they will go along as they came along so far. What could have done in the mortgage crisis for instance: Instead of rescuing the banks and handing them over unlimited amounts of money, one could have used the same amount of money or even less to rescue the people with the mortgages. But of course, the mortgage payers---although many---don't have their well payed lobby groups ready to influence the decision making in politics.

Be a manager

Then there is a further important factor for earning more than others which is, having a management position. The higher up in the company's hierarchy the more money the manager gets. Finally your pockets will be filled with even more money if the company is really large (we're talking here about several thousand employees). Bosses of these companies really get paid a lot. One could suspect, that they are overpaid. Don't get me wrong. The positions of the leaders are important ones. A company without leaders would resemble more a couple of chicken in their hen house. I agree as well, that a leader should be payed better given her/his responsibilities. But there remains the obvious question: are they really able to add so much value to the company with their work, that they would earn these many million dollars per year?

It's sometimes argued, that by paying these bosses a lot one gives credit to their responsibilities. But at the end what we can observe, when it comes to responding to these responsibilities---when a boss had failed dramatically---he (it's usually a male) gets the golden parachute easing up his life. And most of the time---if he likes to---he gets soon the chance to drive another company into the abyss. And if this is not enough, another one will follow. The heavy weighing responsibility will finally be carried by the fellow workers with the small pay. In the best case their wages get decreased, but more often the workers are simply just laid off.

Behave well

To have companies which behave well , we have to make the leaders responsible for their decisions, not only the companies as a whole (e.g. pharmacy trials on Nigerian children). If an oil company destroys a region in the Niger Delta (just to provide a random example) just to get out the crude oil, or if an oil company spills large quantities of oil to the Gulf of Mexico (just another random example), who is held accountable for that? Most of the time it is no one. Maybe sometimes the company is held responsible. They then have to pay an amount of money which is just a fraction of their quarterly profit and a fraction of the profits they gained from exploiting (and destroying) this region. What happens to the executives who are responsible for the mess? They go on. Nothing happens to them.

If we want to see responsible behavior from companies, we have to hold the people in the company responsible for their decisions and actions---foremost the bosses. It's them who have the responsibility and the power to decide how the company should handle the issues and who have the wages which correspond to this responsibility. They have to be sued personally for their decisions.

Make them respond them to their responsibilities!

Once this is done reliably, the CEOs of the big multinationals will think more carefully before harming environment or people. Companies which don't rely upon destroying nature or exploiting people are in disadvantage. Once the other options are not any longer available, the playfield is leveled for the good of the society.

We ! have to demand the responsibility , because no one else will do it for us

You are very welcome to leave your comments! Let me know what you think.

Creative Commons License
Demand ! the responsibility by Peter Speckmayer is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

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