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The_Face_of_Boo
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12 Dec 2020, 7:37 pm

A comment made me realize about something:

Quote:
Most companies try to pay "market value". So they try to pay the same that a different comparable company would be willing to pay. The goal is to make sure that there isn't a strong incentive to leave based on pay. Many companies do actually share salary information!


Digging more into this subject; I have found this old yet excellent article, it is about US companies but it’s really the same everywhere:

https://www.forbes.com/sites/joshbersin ... b2df0397ef

This part is a gem:

Quote:
Point 3: Companies Are Sitting On Cash But Not Raising Wages

HR and business leaders are well aware of these financial issues, yet are afraid to raise wages.

Apple, for example, recently announced that its quarterly revenue grew to $61 billion (making it a $250 billion company) and that it generated $13.8 billion in profit (almost 23% profit). This means that for every dollar you spend on an Apple product or service, 23 cents goes to the bank.

What is Apple doing with this money? They’re returning it to the shareholders. The company announced it will distribute $210 billion to shareholders through stock buy-backs and will increase its dividend as well. If you own Apple stock, you see a good return, but if you’re an Apple employee, you may or may not see a thing. (P.S. Apple pays only a 14.5% tax rate.)

Apple, by the way, has about 80,000 employees, so if the average employee makes $100,000 per year (which is high), Apple could give them all a 5% raise, and it would only cost the company $400 million per year, which is less than 0.2% of the cash the company is using for stock buybacks.

In other words, Apple management believes it is better for the company to return cash to the shareholders (which enriches its stock price) than it is to invest in the salaries of its employees.

I’m not saying Apple is underpaying its people. Apple employees are well paid (software engineers make well over $100,000) and sales and service representatives are fairly paid. The point is to consider how management is thinking: at a time when the company is flooded with profit, management chose to invest in its share price. Companies do not see employees as an investment.


Think about it, a trillion+ company can afford way much higher salaries for its employees (non-shareholders); a half million salary for each may be peanuts for it; yet they won’t do it. I think employers are afraid that if employee gets too rich then he/she may even stop working altogether, no? So in theory an employer has incentive to keep you poor in order to keep you dependable on them.

Is there a name for this sinister vicious cycle?



funeralxempire
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12 Dec 2020, 7:55 pm

The_Face_of_Boo wrote:
Is there a name for this sinister vicious cycle?


I think it's called capitalism. :nerdy:


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Mountain Goat
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12 Dec 2020, 8:22 pm

Anyone reading that could be forgiven if they think that the sole purpose of businesses these days is to make money.


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Fnord
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12 Dec 2020, 8:49 pm

Mountain Goat wrote:
Anyone reading that could be forgiven if they think that the sole purpose of businesses these days is to make money.
The primary goal of every business is to turn its profits over to its owners and investors -- not to provide jobs!


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Mountain Goat
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12 Dec 2020, 9:00 pm

Fnord wrote:
Mountain Goat wrote:
Anyone reading that could be forgiven if they think that the sole purpose of businesses these days is to make money.
The primary goal of every business is to turn its profits over to its owners and investors -- not to provide jobs!


Nooo. That's where greed comes in.

Companies and businesses philosophy should be to provide a product or service. Obviously they need to make money to survive, but that is a secondary objective as if it becomes the primary objective somethings morally wrong.


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Fnord
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12 Dec 2020, 9:08 pm

Mountain Goat wrote:
Fnord wrote:
Mountain Goat wrote:
Anyone reading that could be forgiven if they think that the sole purpose of businesses these days is to make money.
The primary goal of every business is to turn its profits over to its owners and investors -- not to provide jobs!
Nooo. That's where greed comes in...
Yes, and that's called "Capitalism".
Mountain Goat wrote:
Companies and businesses philosophy should be to provide a product or service.
No.  Corporate philosophy is: "Increase our wealth by providing products and services that are in demand."  There is nothing morally wrong with that, regardless of what you or anyone else believes it "should" be.  Sad, but true.


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Mountain Goat
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12 Dec 2020, 9:21 pm

Fnord wrote:
Mountain Goat wrote:
Fnord wrote:
Mountain Goat wrote:
Anyone reading that could be forgiven if they think that the sole purpose of businesses these days is to make money.
The primary goal of every business is to turn its profits over to its owners and investors -- not to provide jobs!
Nooo. That's where greed comes in...
Yes, and that's called "Capitalism".
Mountain Goat wrote:
Companies and businesses philosophy should be to provide a product or service.
No.  Corporate philosophy is: "Increase our wealth by providing products and services that are in demand."  There is nothing morally wrong with that, regardless of what you or anyone else believes it "should" be.  Sad, but true.


I think that is where things have gone wrong. Obviously one can't survive if one makes a loss. I personally think that the stock market needs closing, as it was origionally set up for a good purpose because some projects cost far more then a single individual could afford, and it was a way or getting large projects off the ground and the profits were shared as a "Thank you". This in principle was good and just.
What it became after that all went wrong where the sole purpose was to make money for doing nothing other then investing money, and often money that the investors did not actually own!
If the system is put back right to the origional concepts as it was intended, then I think this whole world would be better off. Half the poverty worldwide has been caused because of greed by others, and the stock market indirectly has caused this as its whole concept has swayed to be a money making machine, and where does the money come from? By taking advantage of others. In other words, the stock brokers are making money off the backs of hard working individuals and robbing them of the value of their work.

Sure there needs to be owners of factories as most people could not afford to set one up. But there needs to be a balance.


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cyberdad
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12 Dec 2020, 9:28 pm

Welcome to the world of publicly listed companies on the share market.

Shareholder's needs to see large profits and big dividends overrides employee wages.

Marketforces apply (as usual), if the sector is cashed up then employers who offer higher wages will attract better people. When that happens wages go up from competitors to attract better employees.



Fnord
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12 Dec 2020, 9:31 pm

There is a balance on the corporate side, influenced by economic Darwinism -- the most economic, effective, and efficient companies usually survive, while the rest fall by the wayside.

Sadly, there are people who believe that employment is a right, not a privilege.  True, people have the right to seek employment, but unless they already qualify for the position the want, they are not likely to be granted the privilege of occupying that position. Make no mistake: the position belongs to the employer, not the employee, and the employer is well within its rights to either dismiss the employee from that position, or to eliminate the position entirely, thus making the employee redundant.

That's business, kid.  Employers have the right to grant the privilege of employment, and to set the qualifications for those whom they would employ.


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cyberdad
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12 Dec 2020, 9:34 pm

Fnord wrote:
There is a balance on the corporate side, influenced by economic Darwinism -- the most economic, effective, and efficient companies usually survive, while the rest fall by the wayside.

Sadly, there are people who believe that employment is a right, not a privilege.  True, people have the right to seek employment, but unless they already qualify for the position the want, they are not likely to be granted the privilege of occupying that position. Make no mistake: the position belongs to the employer, not the employee, and the employer is well within its rights to either dismiss the employee from that position, or to eliminate the position entirely, thus making the employee redundant.

That's business, kid.  Employers have the right to grant the privilege of employment, and to set the qualifications for those whom they would employ.


Yeah its called marketforces. Keynesian economics at it's purest. Let the market decide wages. If companies are financially benefitting then the benefits will eventually trickle down to the workers

Like crumbs from the dinner table :roll:



Fnord
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12 Dec 2020, 9:38 pm

cyberdad wrote:
Fnord wrote:
There is a balance on the corporate side, influenced by economic Darwinism -- the most economic, effective, and efficient companies usually survive, while the rest fall by the wayside.

Sadly, there are people who believe that employment is a right, not a privilege.  True, people have the right to seek employment, but unless they already qualify for the position the want, they are not likely to be granted the privilege of occupying that position. Make no mistake: the position belongs to the employer, not the employee, and the employer is well within its rights to either dismiss the employee from that position, or to eliminate the position entirely, thus making the employee redundant.

That's business, kid.  Employers have the right to grant the privilege of employment, and to set the qualifications for those whom they would employ.


Yeah its called market-forces. Keynesian economics at it's purest. Let the market decide wages. If companies are financially benefiting then the benefits will eventually trickle down to the workers

Like crumbs from the dinner table :roll:
Yes.  "Like crumbs from the dinner table", but crumbs do not fall from empty tables, so why do people complain?  Likely because they are as greedy as the corporations they criticize, but simply lack the wherewithal to achieve true corporate status themselves.

In a word: "Jealousy". :mrgreen:


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funeralxempire
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12 Dec 2020, 9:55 pm

Deregulated capitalism fails to deal with vicious cycles such as this and that's why it only succeeds on paper. :wink:


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Bradleigh
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12 Dec 2020, 10:10 pm

This is literally capitalism, and what studies of socialism have studied to address for a very long time. Under strict capitalism the only job a business has is to make money, and everything it does along the lines of making a mission statement, investing in staff and building goodwill, is all in service of a company making the most money. This is basic stuff if you have studied business.

Again, noted by the forefathers of socialism is that left alone capitalism will eat itself alive as you have people and businesses hoard all the wealth to themselves, while giving as little to the people that actually keep it turning, employees turned customers.

This is how it is ridiculous when people treat companies not only as legal entities but as entities like a human where health, happiness and lives are really at risk.


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cyberdad
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12 Dec 2020, 10:22 pm

Fnord wrote:
cyberdad wrote:
Fnord wrote:
There is a balance on the corporate side, influenced by economic Darwinism -- the most economic, effective, and efficient companies usually survive, while the rest fall by the wayside.

Sadly, there are people who believe that employment is a right, not a privilege.  True, people have the right to seek employment, but unless they already qualify for the position the want, they are not likely to be granted the privilege of occupying that position. Make no mistake: the position belongs to the employer, not the employee, and the employer is well within its rights to either dismiss the employee from that position, or to eliminate the position entirely, thus making the employee redundant.

That's business, kid.  Employers have the right to grant the privilege of employment, and to set the qualifications for those whom they would employ.


Yeah its called market-forces. Keynesian economics at it's purest. Let the market decide wages. If companies are financially benefiting then the benefits will eventually trickle down to the workers

Like crumbs from the dinner table :roll:
Yes.  "Like crumbs from the dinner table", but crumbs do not fall from empty tables, so why do people complain?  Likely because they are as greedy as the corporations they criticize, but simply lack the wherewithal to achieve true corporate status themselves.

In a word: "Jealousy". :mrgreen:


Of course there are people who aspire to be rich. But in order to be competitive in a neo-capitalist you need to produce goods/services by minimising wages.

Even small business need to make use of cheap labor. I know small clothing stores here in Melbourne that rely on sweatshops in the third world countries to make fabric material that are exported to be stiched and designed by the owner. My own brother-in law has a side business in diving equipment where he gets the parts made in a factory in China.

Employing locals to make goods that can be manufactured by wage-slaves in Mexico will mean going out of business as you have to pass the cost to the customer.



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12 Dec 2020, 11:13 pm

In economics human life has no value other than what it can do for that given organization or more importantly its bottom line. If a robot can do it better and has no HR cost then the robot is better. Similarly if you can pay someone a particularly low wage you pay them that low wage because it's the going rate.

I think a big chunk of not just the tendency but the lack of freedom to do otherwise is the public equity model we have and how many things there are in place to deal with companies who are undervalued or not optimized in every way. It's also clear that we need to get really serious about not having economic systems dictate one's right to live, particularly that if or when they do they'll mangle human values badly enough to ratchet the whole culture toward sociopathy generation by generation.


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13 Dec 2020, 12:08 am

techstepgenr8tion wrote:
In economics, human life has no value other than what it can do...
This is not just the prevailing economic model, it is also the dominant social model as well.

Think about it ... how many friends might someone have if they never produced any benefit for any other person?  Even worse, how many friends would someone have if all they ever do in their relationships is take, take, take?

No ... whether or not we admit it, we form a relationship (corporate or social) with another for the sole purpose of gaining more from the relationship than we put into it, and the relationship is very likely to end when we stop contributing our "fair share" to it -- whether it is refusing to do any work at the jobsite or office, or parking our butts in front of the TV 24/7 and expecting to all of our personal needs to be met by our roommates or spouses.  The usual, eventual result is dismissal or divorce (maybe both).

Sure, it sucks; but that is the way life works.


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