Too much cash? Pay people more! Really that simple. Money has a momentum, a speed by which it flows through an economy. Eventually those mountains of capital will disappear because there is no one left to buy what is being sold.
The thing is, when you hoard wealth as numbers on a balance sheet rather than spending it, you are actually destroying that wealth. Money which is not in motion is not money.
I find it absolutely insane that we take the excess, the bounty, the benefit of the efforts of centuries of technological and industrial progress, and rather than enjoying those benefits, convert them into numbers in a ledger that one can look at and go "uh huh", which provide no benefit to man nor beast.
It's the biggest scam ever pulled, and we all willingly engage in it. Marx pointed it out as "the accumulation and destruction of crystallised labour-time by the owners of the means of production" (I paraphrase) in Kapital - and absolutely bingo has changed since then.
UBI is in my mind the way to go - tax the ever living hell out of cash reserves, which would promote re-investment and the use of cash - and use the proceeds from that tax to pay a UBI.
Absolutely the most important thing that can be said. My response to moralizing and angst over how the economically disadvantaged spend welfare money, or judgment about "lazy" people who wouldn't continue to work in the face of basic income is "who gives a fuck? As long as they spend the money, its moving and the economy moves with it."
Money has gravity. It will always move towards those concentrations of wealth that exist at the top and away from the bottom. Without a mechanism of some kind to remove it from the top and inject it into the bottom, it will never move in any way that provides benefit to the larger economy, and might as well be a closed system.
> "who gives a fuck? As long as they spend the money, its moving and the economy moves with it."
What they spend it on matters. The economy and thus society is shaped by consumer demand. Not just how much people want(and can afford), but what people want (and can afford).
Companies largely don't see opportunities for improvement of the economy anymore.
The hoarding of cash is a symptom of this, not a cause. This is also a problem that can't be fixed by financial rearrangement, however creative. And we should keep in mind that improving things by meddling with financials is really hard, destroying entire economies with that same meddling is very, very easy.
We should do more basic research. That might help. Might.
When it comes to the problem you identified, I think the cause is QE and cheap loans. How do these profits work ? Well, easy : every bit of revenue coming in becomes profit and you use loans to finance everything. In some cases, they literally use loans to buy raw materials instead of revenue. In sadly more than a few cases, loans are being used directly to be paid out as profits, either directly or through share buybacks.
This seems to me a stupid deal for shareholders : you're trading equivalent value for a senior position in the liquidity chain. But it has that "money now" ring to it, of course.
This is not sustainable, and will blow wide open once interest rates rise again. And they will rise as sure as the sun will come up. Either because some central bank causes inflation, or because they simply stop pushing down interest rates.
Also infrastructure. Seriously. In much of the world outside of Europe and Japan, most people simply don't have access to very good infrastructure for basic needs like transportation, food, water, and health. Sure, it's a public good, but it's money being left on the table by the global economy since capitalism systematically under-invests in public goods.
One dollar that changes hands ten times in a year has contributed more to the economy, and created more effective wealth, than ten dollars that spend the whole year lying in a safe.
Completely wrong.
It is insane to see this kind of basic communist rhetoric on Hackernews.
If I hide a billion dollar under my mattress for decades, it means that there's that much less dollars chasing goods and services. The effect will be as if those dollars had been destroyed : the total wealth will remain constant, but the value of all the other dollars remaining in the circulation will increase.
Let me repeat : the wealth remains constant, it is not destroyed. Cars in driveways are not going to explode. Crops will not spontaneously catch in fire. People will not forget the skills they have.
Which causes deflation. Specifically in this case wage deflation. And then because people have less money, they can't use their cars and crops and skills because people don't have as much money to pay for gas or food or the services of others.
How?
How is this specifically wage deflation?
That's a hell of a quantum leap.
If anything, wages are much more resistant to downward pressure than goods. (People really don't like getting a paycut.) So even if the value of dollars increase, most people keep the same wage. In extreme cases, in can even end up in layoff, because people are now paid too much in comparison of everything else in the market.
I would take deflation over inflation any day. Inflation eats away anything you try to keep for a rainy day, while at the same time reducing the value of your paycheck. This means that you must constantly negotiate (or beg, depending on your position) for a raise or you fall behind.
You're asking how hoarding cash instead of paying higher wages causes wage deflation?
> If anything, wages are much more resistant to downward pressure than goods.
Wage deflation relative to CPI. Wages remain stagnant or increase less than prices.
We would have overall deflation if The Fed wasn't printing money to offset the corporate hoarding. Which is almost certainly better than overall deflation but is still quite bad for people who are paying more for things but not getting paid more.
> I would take deflation over inflation any day.
Deflation was a primary cause of the Great Depression. Deflation is very bad.
> Inflation eats away anything you try to keep for a rainy day, while at the same time reducing the value of your paycheck.
Inflation doesn't eat the value of stuff. If you own a home or stocks then inflation causes their value to increase proportionally.
The problem is when there is price inflation without wage inflation. Which is caused by corporations hoarding cash instead of paying higher wages.
No, I'm asking how deflation in general causes wage deflation. Your post was in answer to deflation caused by hiding/destroying cash.
> Wage deflation relative to CPI. Wages remain stagnant or increase less than prices.
So it's not related to the increase of value in the currency caused by hiding away 1 billion under a mattress. You used the same term but for different context/meaning. The weird thing is how you phrased it as if it was a causal relationship.
> Deflation was a primary cause of the Great Depression. Deflation is very bad.
There's many factors for the US Great Depression (such as previous inflation). There's also the relative speed at which those things occur. Both can be destabilizing in high enough magnitude. But deflation is the natural result of a growing economy and better efficiency. If it was bad, civilisations would have self-destructed every time they came up with a better way to do things. Imagine a new technique that would reduce food prices by 50%. Would this be a good, or a bad thing?
> inflation doesn't eat the value of stuff. If you own a home or stocks then inflation causes their value to increase proportionally.
Sure, I never said to the contrary. What's your point? People should stop saving money and buy everything around them instead? There's a huge cost to that, especially in real estate.
Deflation most affects the party who would otherwise have first received the money that was removed from the economy.
> But deflation is the natural result of a growing economy and better efficiency. If it was bad, civilisations would have self-destructed every time they came up with a better way to do things. Imagine a new technique that would reduce food prices by 50%. Would this be a good, or a bad thing?
Costs are different than prices. Reducing the cost of producing food is good. Reducing prices is generally bad -- it's better to increase the price of everything else by creating new money and leave the price of food constant. Because reducing prices creates an incentive to hoard currency, which is very bad for the economy. It makes currency an investment that competes with actually productive investments and reduces the speed of money which reduces economic activity.
> People should stop saving money and buy everything around them instead?
That's already what people do. Who literally hoards cash?
> Inflation doesn't eat the value of stuff. If you own a home or stocks then inflation causes their value to increase proportionally.
The paper-value of one's home does not matter. Everybody needs a place to live - the next liquidity event will be after they die. You're advocating the fallacy behind the continual housing bubble (and all these renovations people do for personal comfort but lie to themselves about it being financially beneficial, but I digress).
Stocks are one of the least-worst places to park savings. Which forms a bubble of dumb money "investing" in things it knows nothing about, but simply following the herd to safety (and then following it out).
Savings are what gives individuals power and autonomy. Debt creates an obligation which must be continually serviced. If one is reliant on their income, they lose the power to walk away from their job. The only bit of flexibility they have is to play different masters off one another, but given what's at stake the employers certainly know this game and compete as little as possible.
Analyze your own position. Calculate out how many months per year you have to work for previously-rare survival goods of food/clothes/electricity, versus how many simply go to paying (a bank) rent on housing/etc. Then look into how much it would actually cost to build a dwelling, versus how much of that cost is solely due to being financialized. Running from the bogeyman of deflation, we've basically recreated indentured servitude for the modern day! It's no wonder the middle class is fading - when your personal autonomy is the difference between two large numbers, the only answers are go big or go home.
It's the monetary policy that creates ever-more rope for people to hang themselves with. The debt<->collateral relationship is circular - every cut to interest rates / down payments directly increases the capital value by the corresponding amount. This has destroyed the idea of ownership, making it impossible to permanently get ahead of the treadmill.
(IMHO this economic weather is directly tied to the centralizing trend of communications technology growing the asymmetry of power that is ever-better at siphoning surplus away from individuals. Giving individuals the power to repudiate a mortgage while avoiding eviction would also correct prices)
If you make more money available then housing prices go up to consume essentially all of it. But that's how markets with highly inelastic supply behave. Yet we can build arbitrarily many housing units. So why haven't we built more? Urban housing prices have been high for many years. Plenty of time for the market to react. Something must be preventing it.
> If the monthly cost of housing actually started tending towards the amortized cost of construction, the builders would immediately stop just as they did during the last mini-crisis.
Of course they stop when it becomes unprofitable. What would you expect them to do?
The problem is this: Increasing the supply of housing can cause housing prices to fall very quickly. From a social perspective that's what we want, but from a construction company perspective the last thing they want is to pay a lot for land that loses its value while they're holding it.
The way to mitigate that risk is to buy less land and build more housing on it. But if zoning regulations don't allow that then they build nothing. Hence the problem.
The resulting deflationary spiral is self-reinforcing. Fear of this state is why central banks try to create a consistent level of inflation.
In fact, the system is bistable. Inflation has the same self-reinforcing spiral, and we're living it! The moneyprinters' metric (CPI) has become the goal unto itself - anything technological keeps getting ever-cheaper, so anything that can be financialized (the quickest feedback path where printed money returns to the CPI) shoots through the roof.
But you're right that the system has some bistability. A deflationary spiral with declining production and lifestyle can sustain itself for a long time. It is also sustainable to maintain a moderate inflationary spiral with ever increasing production and improving lifestyle.
Given that choice, isn't it obvious why bankers try to keep the latter option going?
But it is not actually bistable. Keeping moderate inflation going requires continual intervention. It is easy to fall off the rails into a hyper-inflationary disaster. It is easy to fall off the rails the other way into a deflationary disaster. And continued success creates the moral hazard of overconfidence in the stability of the system. This overconfidence leads to risky behavior which in the end WILL result in disaster.
We came close to that in 2008.
It is unclear to me whether it is better to have regular smaller disasters, or occasional large ones. But pushing off the next disaster is always better in the short run.
I'd say we're in the making of a hyper-inflationary disaster, as central banks continue to apply their top-down prescription of "productivity", forcing people to work full time make-work jobs (eg FIRE) rather than letting the majority slowly build up savings and create economic conditions that naturally lead to working less (as one would expect from uh, technological progress). The message just won't be received until the petrodollar has completely disintegrated though.
So it isn't necessarily a problem if you can wait a year and then buy a better computer with the same money. But it IS a problem if your best investment strategy for that year would have been to put the money under the mattress instead of loaning it out, investing in stocks, or some other activity that keeps money circulating.
As for a hyper-inflationary disaster, the exact monetary injection you use to stave off deflation can also create inflation. This is why central banks have such a challenge on their hands. They are trying to balance the economy between nasty extremes, while trying to satisfy contradictory goals.
Hoarding causes general deflation; to capital, as well as wages. Its effect is the same as distributing the value of the hoarded money across the money supply.
Deflation causes people to feel as if they have more money, not less. Money that is more valuable (deflated), purchases more value.
And while deflation has knock-on effects that are problematic, I'll add that the government backing any fiat currency has ample tools to combat it (creating inflation by printing currency).
Eventually causes general deflation. The whole problem with deflation is that it isn't evenly distributed. If the price of everything whatsoever increased or decreased by the same percentage at the same time then there would be no trouble.
The problem is the period of time between when people start being paid less and when things start to cost less. Or between when things start to cost more and when people start to be paid more. And during that period of time, companies hoard yet more cash which perpetuates the cycle.
If there were a constant and fixed supply of money, what you say would be true - but there is not, and therefore what you say is false.
Cars in driveways will not explode, crops will not catch on fire, but the incremental benefit from increased efficiency will never be realised in any tangible fashion.
Also, nice stoop to the ad-hominem - I'm no communist. Are you a primitive randroid?
You try to move away from "hiding money destroy wealth" and establish the ground to go to something like "printing money steals value". It is absolutely NOT the same thing.
I explained your logic was erroneous. Hiding money away does not destroy wealth.
By the way, printing money doesn't destroy wealth either, it transfers it. You can argue that it's evil all you want (and I would agree), but that's NOT the same thing as saying that destroying money destroys wealth.
Please re-read the HN guidelines, which ask you not to call names in comments.
Capitalist economies must continually grow to be healthy. Savings which is not invested does not create growth.
A healthy growth is a stable, slow rate. If growth is too fast, an economy should stop investing to slow things down. If growth is too slow, an economy should invest more. Unfortunately, neither of those are natural actions. People like to invest more during fast growth and invest less during slow growth. Thus boom-and-bust.
They aren't hiding it in their mattress, they're investing it.
Invested dollars absolutely do circulate through the economy.
The money we're talking about is held in banks as deposits. Big purchases means one account number is debited and another is credited, but the money remains in banks. Those bank deposits are used for lending. Money still participates in the economy.
Those bank deposits can be used for lending. That doesn't mean they are. And banks can currently borrow from The Fed at practically no interest, so the effect you're describing currently doesn't exist.
It's also entirely independent of the original money. The money would also be deposited in a bank and used for lending if it was paid to employees as wages.
People who withold their stash of money from the market cause deflation, meaning they just increased the value of money in other people's pockets (what others can buy for the same amount of cash).
So there's no loss for other people in the economy. The only loser is the company doing the witholding and its employees.
Other people had already benefited from the iPhone they bought or whatever.
Absolute amount of money in the economy doesn't matter much.
The action of the Fed is not constant; it is a reaction to the level of inflation/deflation. When the Fed is succeeding in meeting their target, any variation in inflationary/deflationary forces is cancelled.
Of course, Fed interventions are not perfect at accomplishing that goal; they don't always have the force to meet their targets, and all interventions have side effects. But to treat the Fed's actions as independent of economic conditions seems to mischaracterise its function entirely.
This money is not simply sitting under a mattress. It's being reinvested, often in low risk treasury bonds, lowering the cost of borrowing for the government. A small fraction of it might be allocated to equity, and a smaller fraction of that might be allocated to startups, etc.
Setting aside the UBI goal, even if they weren't returning the money to the investment cycle, your funding scheme is difficult to implement. The importance of cash reserves varies from company to company:
1. Some have pretty much no reserves, and when the overnight market collapsed in 2008, their ability to make payroll was suddenly in question. Otherwise productive companies had operations jeopardized by their financial arrangement. A tax on cash reserves would create additional incentive to produce more risky companies.
2. Banks have huge liabilites and cash reserves in the form of deposits. They're even required to keep certain amounts of money in liquid cash reserves. Do you propose offsetting cash on hand with liabilities owed?
3. Apple actually took out a huge loan against overseas money to fund a dividend. Overseas money is currently not taxable, do you wish to change that? Do you even need to tax reserves if you do?
4. Using the same company for another example: Apple is reputed to finance their supplier's manufacturing facilities. Do you want non-Apple companies to make investments in their company, their supply chain, etc. they currently aren't making? One has to assume boards don't approve capital investments aren't profitable. If the choices are pay a taxable dividend, hold as highly taxable cash, or invest it at a slightly negative, we may see more unproductive investments.
Note that I'm not against UBI, but we have to think about how changes to tax law results in changes in behavior.
What makes you think they would have been able to manage an even bigger stimulus any more effectively
Reinvesting cash in low return investments is not what a company should be about (unless it's an insurance company). It's basic company finance that if you can't reinvest into the company to increase earnings at a greater rate than a bond, then you should get rid of the cash (pay dividends). I'm not talking about apple here, just pointing out that reinvesting into low risk treasuries isn't much different to putting it under a mattress.
Quite true. But if the government then takes the cheap bond-prices, turns around, and implements fiscal austerity (because it ostensibly has too hard a time paying back those low-risk, low-interest bonds!), well then we've got a very funny situation. Then we've got the situation that people are being taxed so that the government can pay for-profit firms to hold their money while producing fewer public services and goods than before.
Or, in very short, we've then got a situation in which the public is being forced to pay tribute to large financial firms.
Also, aren't the Corp's hoarding cash because interest rates are artificially low?
Is the 'cash' really paper money or something like hard currency (gold coins, etc...). In that case 'hoarding the hard currency is not really destroying it, and when the investment options include tying up the money for some time with only a small return on investment, maybe hoarding is the best answer.
If a company is going to incur an enormous tax liability by earning the money under one taxing authority, it will make sense for them to push that revenue to a subsidiary incorporated under a different taxing authority. One with a lower burden.
If, for example, the effective tax rate in the US is about 40% and the effective tax rate in Elbonia is 25%, for a sufficiently large corporation, it makes financial sense to incorporate a subsidiary in Elbonia to handle European and Asian business transactions. If the disparity is large enough, it not only makes sense to do so, it starts to border on insanity not to do it.
As other have pointed out, these reserves aren't mountains of cash sitting in vaults. It's money that's being lent for interest and invested elsewhere.
You're re-defining money in order to make your statement true. That doesn't make your statement true, it merely makes your definition wrong.
Money is (at least) two things: It is a facilitator of transactions, and it is also a store of value. You're saying that, if any particular chunk of money is (for a time) no longer being used for the first purpose, it ceases to be money. But it's perfectly serving the second function. You have to completely ignore that in order to reach your conclusion.
I suspect that your presuppositions are preventing you from looking at this objectively.
The wealthy will simply move money amongst themselves, cronyism will run rampant. By disoncentivising savings, in favor of investment, you'll absolutely destroy upward mobility and moreover push middle and lower income folks into directly or indirectly paying for the investment capital of the wealthy (or politically connected) class, socializing the risk and privatizing the gains.
Even if you make the taxable reserves progressively scaled, the inflation brought about by your ubi scheme will creep brackets higher than legislators can respond. Any attempt to automate bracket movement with measured cpi rates will suffer from cpi fudging
Your proposal is a recipe for social stratification and class warfare hell. It's effectively what we are doing now, except taken to 11.
The right public policy decision is probably to drive interest rates more negative.
As a saver with cash in the bank that's not in my personal best interest, but it's probably the right macroeconomic strategy.
Money != Wealth, for one.
If you hold money on a balance sheet, you are not destroying anything. In fact, you are reducing inflation since inflation is more money chasing less goods.
Except that FED will counter that effect because they are keeping stable inflation. People who don't save like you do will still be in exactly the same situation as they were before you decided to save.
If all of the rich people one time decided to spend their money on something that touches real economy (not just stock gambling) it would drive up inflation, possibly too fast for FED to counter it.
Of course not. Since the original statement was about holding gobs of money on a balance sheet, it is clear that regardless of what the FED does, you would increase inflation by spending that money rather than keeping it on the balance sheet. Therefore, holding that money reduces inflation(since the other option was to spend that money and increase inflation).
The real solution is to just do a UBI. If this is not an obvious call sign of how the efficiencies of recent decades are obsoleting human labor in general I don't know what is. Redistribute that money so consumers have spending power again.
I'm actually not sure this is true. From a short term perspective, perhaps. But longer term it is more beneficial for everyone if there is more money to be spent.
Most of the companies I've worked for I would never buy their product: either because I didn't need it, or because I knew its true quality, or both.
I think it could be a terrible PR move. If you effectively pay your employees less and justify by giving them discounts. A program that begins with good intentions could end badly. Especially if the program is conceived in an era of high profits. In low profits, management makes different decisions. Also, you often get new management.
I meant you run into problems when you end up effectively paying them less and justifying via a larger discount.
Management could end up doing this gradually as times get tough. For example, a company announces lay offs and pay cuts, but softens the blow with a larger discount.
I guess I'm recommending caution. I would avoid making a discount a major part of employee compensation. A worker deciding to apply for jobs at Walmart and Costco could end up weighing a better health plan against a higher discount on basic goods. That seems problematic to me.
In the short-run, yes. In the long run, perhaps not. From retention to training to quality issues, it can make sense to pay more.
Universal basic income is a bandaid on the fact that the short-term, market-driven focus of capitalism under-values people and seems to be creating a winner take all game that will eventually end the game itself, if balance isn't restored.
I'm not opposed to UBI – it may well be the best option at this point, but I'd also like to figure out how to incentivize the system to look at long-term consequences as well. (Though, I recognize I'm far from the first down this line of thought).
Depends on how consolidated the industry has been, and whether the firms that are left can collude or silently set norms to put ceilings on pay and quality.
No, but people do tend to be. We seem to be wired to value near-term gains much more strongly than long-term gains -- http://www.behavioraleconomics.com/mini-encyclopedia-of-be/t...
This then drives us to create the systems that focus on near-term rewards – like the quarterly reporting and equities that can be traded at a moment's notice, etc. etc.
If you let the masses take charge, you're going to a get a more wild, dynamic, unpredictable outcome. In the stock market this new "democracy" manifests as extremely short hold times, in the political arena, as fringe candidates that party elites would never have let win the primaries, had they been in charge.
I, for one, hold stocks for a long time, and hope companies do optimize for the long term, but I realize I may be in the minority.
A recent experience when trying to get a personal mortgage as a company director underscored this:
"Your profits are down! Your business must be failing!!"
"No, we opted to re-invest some of the substantial amount of cash we're sitting on, and therefore took a hit to profitability this year so as to be more profitable in the future."
"So your business is failing?"
Consider this at a grand scale and you understand the incentives within which corporations operate. Everything is about the quarterly earnings report.
Look at a typical main street business: retailer, car dealership, restaurant, etc. There is no "R&D". Profits scale linearly with revenue; it's not so crazy to jump from "profit is down" to "business is failing".
In fact, the very definition of a "high-technology company" is one that reinvests a large amount of revenue into development. The exact threshold varies, but 20-30% and most people agree you're into "high tech" land. For comparison, consumer product goods companies like P&G spend some 10% of their revenue on marketing/advertising. http://adage.com/article/special-report-pg-at-175/procter-ga...
The real issue is that "Business" doesn't yet understand the economics of software companies. They have no tangible assets, their cash cycles are vastly different from most other companies, and they grow in discontinuous, sharp, nonlinear ways. You'll see this bias all over the economy if you look.
"Silicon Valley companies are overhyped, THEY HAVE NO PROFITS"
"That company is failing, it's going under"
Amazon is the grand counterexample, look at how much of a head-scratcher that company is to Wall Street to get an idea of how puzzling this is to Joe Business Guy.
This implies retention. It also implies a certain level of quality or the agreement fails. So your long run argument falls flat.
Yes, you can pay more to get more quality. This is not at odds with wanting you to work for as little as you will agree to.
We talk about how the tech industry has a problem with employer / employee loyalty where you should expect to work for a half dozen companies by 35, but even moreso investors have zero loyalty whatsoever, and will jump at the first sign of declining growth.
So entrepreneurship is only half the battle - we also need to incentivize more Dells that either revert from public to private or just get more new business startups that aren't looking to just cash out and sink the business.
Henry Ford realized just how wrong this is almost a hundred years ago. He realized that if you don't pay your workers enough they you won't have demand, and growth is driven by demand. It's a feedback loop. This is why having so much wealth concentrated at the top is so bad, it stifles growth. You end up with a stagnant middle ages type economy.
Already in service industries, it seems like current companies that focus on employees more have higher reputations overall, and often have higher growth despite higher expenses on employees. Costco and Trader Joe's vs. Wal-Mart is the frequently cited example of this sort of case scenario, but there are plenty of others.
Unfortunately, I'm not sure that a large portion of the investor class is really great for evaluating long-term value, and too focused on the quarter end. (Quite a number of the better service oriented companies are not public owned.)
For the same reason, I'll be honest, while UBI is another way around increasing automation, I just can't see the same short-term oriented investor class fully getting behind this concept, at this time.
The last time we had a similar scenario (the Gilded Age), it took a lot of unrest for things to get better for the manufacturing worker class. Unfortunately I wonder if a similar future will happen for the service worker class if something doesn't change...
A sentiment I agree with, but if the recent Yelp call center fiasco is any evidence, I don't find it terribly likely.
If I'm at a self-service gas station using the self-service pump and paying at the self-service machine, I really don't care if there's good service from the person behind the counter inside. I certainly wouldn't want to pay more for better service from a person I don't ever interact with.
Let's say it: it took the Russian Revolution to get the Western owning classes sufficiently scared that they decided to buy wholesale into Bismarckism and social-democracy.
Rather, capitalism's answer is for companies to return the cash to their shareholders. This can be done either through stock buybacks or dividends.
I'm not enough of an expert to speculate on what happens next. Maybe this would just shuffle the hording problem around. But this would be a very simple first step that works entirely within the parameters of our current system.
Same way that it's better for the local economy if I were to go out to eat every night. But it's definitely not better for ME, which is why I don't do that.
You need a better solution or incentive than "macroeconomic hope".
If you want to spread the wealth around, then you need the government to perform this task.
Companies have no incentive to do that. Paying your employees more doesn't directly lead to more profit.
This might be true for many large corporations, but hard to study, since aggregate salaries are not public for any one company.