The stock market is not the economy. It's grounded in business fundamentals but is steered by human sentiment.
The stock market is not the economy. It's grounded in business fundamentals but is steered by human sentiment.
In reply to frenchyd :
So, when the company posts a loss, it would be ok to not pay employees?
Employees aren't prepared to take the risk that employers and investors are. They want steady paychecks.
The only year my company suffered a loss, I borrowed money to keep it afloat. Never missed giving anyone a paycheck, except me. I didn't get paid many weeks, and went into debt (several hundred thousand dollars) to support them and their families. When Christmas came, I had to break the news that I wouldn't be able to pay Christmas bonuses because the year had been a bad one. My whole crew quit about a week later, because they wanted to believe the company was in a position it simply wasn't.
That was 20 years ago. I'm still paying back the debt.
Hovering over here in my quasi-lurker copter, there seems to be a lot of "us vs. them" that fuels many of these discussions. Situations that cause these feelings are often fluid, even more fluid than people realize. It's all changeable. We don't like change and change can hurt, but we can move from "here" to a better "there".
I know there have been hard data discussed, but the sentiment is a feeling of unfairness. Just my additional, maybe unhelpful observation.
STM317 said:The stock market is not the economy. It's grounded in business fundamentals but is steered by human sentiment.
In the short term the market is a voting machine. In the long term it's a weighing machine.
1. REVENUE = total money coming in, EXPENSES = total money going out, PROFIT = REVENUE minus EXPENSES (or its called LOSS when negative). You pay TAXES on PROFIT. If you revenue $10 and expense $8 your profit is $2. You pay taxes on $2, not $10.
2. Payroll is an EXPENSE
So, by putting the above 2 facts together, you can clearly see that we already live in a system where choosing to increase your payroll expense decreases your tax liability.
Also, you can go and find zillions of corporate case studies and "in general" businesses do better by hiring and paying for better employees than their competition. The human fallacy is to think that individual employees all have similar output. But the reality is that the "good" employees making 10% more than the "bad" employees usually do much more than 10% more work.
You are also leaving out all the large single owner companies that DO have profit sharing with their employees that is directly tied to profits. They are still in it to make money so it's not crippling because those companies are doing everything they can to use their "income" to build and reinvest in the company.
We have an intricate fabric woven of the many, many different types of business structures that exist right now. Some of them are exactly what you are calling for. Some of them are good, some are bad.
Basically, anyone can choose what type of business they'd like to work for.
Your one-size-fits-all solution is not a solution at all. It would be a mandate that would lead to a mess, and many failed businesses and lost jobs.
I agree there is an enormous amount of worker dissatisfaction, and you have expressed a great deal yourself over the years. My only suggestion is that contentment is incredibly important, and anyone who can't be satisfied at the company they are working at should move. Quickly.
It's the only way to effect any change.
I'm pretty content with my place of employment. It's a good fit for me.
Could it be better? Absolutely. I am made offers every month that are better financially. But I know the good side of what I have as well, and I choose to stay where I am at.
One thing I wouldn't want... a profit sharing structure. Because I know it would mean lower wages with a promise of more when times are good, but sharing the burden when times are bad. My company is welcome to both the profits and the losses, as well as the related stress. I don't want it.
In reply to SV reX :
I was paid a commission for my hard work and success. Yes I got a draw against commission but that was only barely enough to meet my cost of living. Since I had expensive tastes and hobbies I really pushed myself for that bonus ( commission) money but without the pressure of meeting my needs I could treat my customers fairly and they knew that I was around for the long haul.
As a result whenever I showed up they set aside whatever they were working on and listened to me. Because they had learned It was worth their time.
A lot of workers want to get by putting out the minimum they can. Some shared profit would instill a sense of investment in the company. Thus putting forth more than the minimum.
Maybe they have a simpler procedure or more effective method. Why share it without that investment?
SV reX said:We have an intricate fabric woven of the many, many different types of business structures that exist right now. Some of them are exactly what you are calling for. Some of them are good, some are bad.
Basically, anyone can choose what type of business they'd like to work for.Your one-size-fits-all solution is not a solution at all. It would be a mandate that would lead to a mess, and many failed businesses and lost jobs.
I agree there is an enormous amount of worker dissatisfaction, and you have expressed a great deal yourself over the years. My only suggestion is that contentment is incredibly important, and anyone who can't be satisfied at the company they are working at should move. Quickly.
It's the only way to effect any change.
Many can't take the risk. They are living from paycheck to paycheck and the loss of even one paycheck puts them into the credit drainhole.
I happen to work at one of the world's largest private companies (in top 100). I wouldn't trade my experience here for any publicly listed company. Able to take the long term view, focus on invention and innovation treat people well in both good times and the lean times.
Employees are share holders. We are all invested in success, not just quarter by quarter but over decades. It's over half my retirement now and much more stable than the open market, out growing it as well.
Want a company to have a more vested interest things other than shareholders: stay private.
Toyman! said:At the end of the day it's all driven by the consumers.
Americans vote for big corporations with their dollars every time they price shop. It's the race to the bottom. They want more for less and the corporations squeeze every aspect of the company to give them those prices. It's the reason Walmar and Amazon are so big. Whoever can do it cheaper and faster will knock them off their pedestal.
Yep. This is the situation. There are varying positions regarding whether it is a problem and if so/how to address it, but that will get political quickly.
In reply to frenchyd :
So, you are suggesting we reward people for trying to get by doing the bare minimum? No thanks.
According to the Bureau of Labor Statistics, 20% of companies fail in the first 2 years. 45% fail in the first 5 years. 65% fail in the first 10 years. Only 25% of companies survive 15 years.
So, how many of the 75% of people would be happy sharing their company's losses as part of their "compensation" package?
As I have noted, there are companies who profit share and do it well. But 75% of companies fail.
ProDarwin said:Toyman! said:At the end of the day it's all driven by the consumers.
Americans vote for big corporations with their dollars every time they price shop. It's the race to the bottom. They want more for less and the corporations squeeze every aspect of the company to give them those prices. It's the reason Walmar and Amazon are so big. Whoever can do it cheaper and faster will knock them off their pedestal.
Yep. This is the situation. There are varying positions regarding whether it is a problem and if so/how to address it, but that will get political quickly.
Funny enough I've heard an argument from a capitalist perspective that all companies are equally terrible, just some are better at hiding it than others, so trying to make ethical choices on who you support with your spending is, from an ethical standpoint, a wasteful at best or destructive at worst exercise in supporting the most competent liars...which sounds a lot like the very socialist viewpoint of "there's no ethical consumption under capitalism" 
In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
If you changed "all companies" to "all publicly traded companies" I'd say equally terrible is valid.
However with enough consumer pressure even greedy companies sometimes do whats best because it is what consumers want. I don't know that I would necessarily call that lying.
SV reX said:In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
Must disagree, there are people all over the good/terrible spectrum, ranging from Jonas Salk to Hitler...
SV reX said:In reply to frenchyd :
So, you are suggesting we reward people for trying to get by doing the bare minimum? No thanks.
According to the Bureau of Labor Statistics, 20% of companies fail in the first 2 years. 45% fail in the first 5 years. 65% fail in the first 10 years. Only 25% of companies survive 15 years.
So, how many of the 75% of people would be happy sharing their company's losses as part of their "compensation" package?
As I have noted, there are companies who profit share and do it well. But 75% of companies fail.
Actually that's exactly what is happening with most companies. Keep your head down, follow the rules, and don't rock the boat is rewarded by longevity.
Really, over time all companies fail. Look at Sears. There wasn't any retailer who sold more. All they had to do was adapt with the times and Amazon would be just a small footnote. But even Jeff Bezo's says within 35 years Amazon will declare bankruptcy
Look at GM and all the other powerhouses of the mid 20th century.
GameboyRMH said:SV reX said:In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
Must disagree, there are people all over the good/terrible spectrum, ranging from Jonas Salk to Hitler..
So, all companies are terrible. Then, on the same page, you say all people aren't. But all companies are controlled by people.
Are you saying that all the people who own companies are terrible? If so, I have a problem with that. So would my employees.
Toyman! said:GameboyRMH said:SV reX said:In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
Must disagree, there are people all over the good/terrible spectrum, ranging from Jonas Salk to Hitler..
So, all companies are terrible. Then, on the same page, you say all people aren't. But all companies are controlled by people.
Are you saying that all the people who own companies are terrible? If so, I have a problem with that. So would my employees.
No I don't believe the "all companies are terrible" theory myself, and I do put some effort into ethical consumption choices. However I do think that the profit motive inherently incentivizes destructive actions for the same "race to the bottom" reasons you stated.
In reply to GameboyRMH :
So, what motive would you replace it with?
Profit is the only reason most people get out of bed in the morning. That includes business people and employees.
Toyman! said:GameboyRMH said:SV reX said:In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
Must disagree, there are people all over the good/terrible spectrum, ranging from Jonas Salk to Hitler..
So, all companies are terrible. Then, on the same page, you say all people aren't. But all companies are controlled by people.
Are you saying that all the people who own companies are terrible? If so, I have a problem with that. So would my employees.
I'm on the line that there's a spectrum of good/bad companies.
But I do think that the concept of the stockholder running the company has made some very questionable companies. "Shareholder value" has made many companies much, much worse- and they can be lead by great people.
Your point before is that consumers being the driver should be the ones driving the company. They are the ones really paying the bills, afterall.
Here's an example- way back in 2006, Ford got a massive loan of $23.5B. IIRC, that loan was paid off in the 2012 time frame- but I can't really remember, and I'm too lazy to look it up. But even pretend that it was paid off in one year. In 2006, Ford's global revenue was $143B, so the customers input ~6x that of the people who loaned Ford money.
Granted, it was a massive amount of money, but the customer input to the company was far, far larger. Spread the loan out over the 5-6 years it was run (probably?), then the customer input to the loan is more like 30-50x more.
This has turned into a massive tangent, and I apologize. But the point should be companies are run by their consumers, not shareholders.
edit- just because.... Right now, Ford's Market Cap (the sum of all the shares of stock value) is just barely under $50B. So every single year, the consumers who buy the product put far more risk out in the +$150B than the risk the shareholder have.
Consumers should be 1000% focus. They are really the ones paying the bills.
In reply to alfadriver :
I don't disagree, but my point about the consumers is they don't care beyond what something costs them. ZFG. They want the most for the cheapest even if it means their shoes are made by slaves in 3rd world countries and their cars are made by large evil corporations without a care for their fellow man. Unless it's a $10 Starbucks coffee so their barista can get paid $15/hr to do a minimum-wage job, they just don't care.
Edit: Don't get me wrong, I'm not saying I'm any better. As a general rule, I could care less where or how something is made. I want the best product for the best price. Where I probably differ from many people is I don't mind paying more for a better product as long as it's actually better. And Starbucks isn't better, at least not $10 worth of better.
GameboyRMH said:SV reX said:In reply to GameboyRMH :
Well, I think it would also be fair to say that all PEOPLE are equally terrible...
Must disagree, there are people all over the good/terrible spectrum, ranging from Jonas Salk to Hitler...
I offered you back the same absurdity you offered.
In reply to Toyman! :
I get that there is a race to the bottom, and generally they don't care. But they are paying the bills.
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