However, if you want to solve wage inequality, why not address it directly by capping executives pay?
Lol, have these guys ever taken a business or economics class?
- Apple h4krBell3I am not a fan of government telling people what to do with their money.
However, if you want to solve wage inequality, why not address it directly by capping executives pay?
- “They should perhaps have an obligation to pay a higher wage in which case much of that 100B would belong to their employees”
Why the obligation? They worked and got paid. Don’t like it work for someone who will give away all their money. Why don’t you start a company and give away all that you built instead of others to do the same. I wonder if anyone would create anything if they couldn’t get rich out of it
“ It highlights that the money was definitely there and isn't 10 dollars as you claimed.”
This thread was about executives not owners.Feb 51
- During the high economic growth years from the 1950s through 1970 labor's share of national income was about 66%. Since then it has fallen to 58% while profits have increased. It's pretty clear that a large portion of the increased profit was simply transferring 8% of GDP from wages to dividends and capital gains. And as that happened economic output stagnated and we now have much lower GDP growth rates.
Potentially that's because when you pay a wage people spend the money, immediately reinvesting it in the economy, but when you pay a dividend investors hoarde it. Companies and investors sit on large cash piles and do not as quickly get that money working again. Thus it looks like wages generate more economic activity than profits.
Therefore we should shift that 8% of GDP back to wages to return to the more efficient, higher growth division of national income.
The question then become whether we need to correct the mistake that allowed the Walton's to smother the economy while racking up a $100b windfall. Maybe we can still recover some of the losses by returning that money back to labor where it always should have been.
- Microsoft HfsevjkThat ratio of labor’s share of income in the golden years was before globalization. The genie is out of the bottle now.
Forcing companies to pay less productive workers more money would just increase their incentive to offshore their employees.
(I suppose this would help with global income inequality if that’s what you care about. But then there’s still more incentive for pushing off labor to the robots).
- Pushing labor to robots is a good outcome. We will just create even more jobs and become more productive. Don't see that as a downside, no tech advance has ever resulted in permanent job losses, just changes. The industrial revolution did not throw everyone out of work, the IT revolution didn't, and the robot revolution won't either.
The current disparity is holding back the economy and we should change it in the name of economic efficiency.
- If the company has money for a buy back, then it has money to pay employees a living wage.
- Why should residual or excess go to workers instead of shareholders? Or customers? Corporations allocate across capital, labor, customers and boards are empowered to make this decision. What if Walmart instead of paying dividends or doing a buyback or raising wages decided to reduce the price of milk or whatever drastically? These are decisions for boards entrusted with the corporation health, not legislators pushing political agendasFeb 44
- Yes, I'd wager they both know quite a bit more about business and economics than you. The question is, why do you think you know everything? What about your short career writing code do you think gives you such insight?
- What makes you think Pelosi knows more. Is it her education? Anything she has delivered that helped the economy? Any business she ran? Anything she created
Oh I get it, you are probably impressed how she amassed 60million plus by being in the government. That is commendable
Same goes for chucklesFeb 44
- Well, Dems would prefer higher corporate tax, but given the current climate, this is a good way to get around GOP’s tax cut while still restricting the rich getting the too much benefits
- Oath / EngxxxcdRight, but dividends are taxed as regular income. So executives gets hit at whatever tax bracket they’re in.
Businesses can distribute the earnings as dividend so the money is taxed as individual income tax, or keep it and taxed as business income tax.
Propping up the stock price with buybacks is trying to get it to tax as capital gain.
- It's a dumb, populist idea meant for the low information base.
If you want to raise worker wages restrict the supply (like reducing immigration) or increase demand (like lowering payroll taxes).
Here's the crux of the story - "Sanders, I-Vt., is exploring another bid for the Democratic presidential nomination."
- There’s a good argument for this. The current compensation model for CEOs has been tied more and more to the share price rather than the CEO base salary. Their bonus and TC depends on growing that share price. So their focus is more on the share price for their own financial interest. This commonly leads to money that could go to workers, growing the company and hiring more workers, better benefits, etc...to rather be spent on stock buybacks to keep the share price higher.
And folks who attack politicians who do this miss the point. The politicians represent workers. They don’t care about the self interest of the share holders. They’re interested in the workers they represent in their district and their state and their focus is in the overall health of the workforce and not the shareholder investment class. They’re doing their jobs.
It’s really not that complicated to understand.
- Do people prefer that the money sit useless in foreign banks instead of in shareholder pockets? That’s moronic lib thinking for you.
The economy went from near recession in late 2015 to the best real wage growth in a generation due to the tax cuts. Other than the data, you are right.
Voters aren’t angry with the economy; they fucking love it compared to the shitty results from 2008-2016.
- “they fucking love it compared to the shitty results from 2008-2016.”
🤣🤣🤣 my 401k and stock returns strongly disagree with this statement. Republicans would have a rock hard hard-on if any one of them had Obama’s economic numbers during their term and you know it.
“Do people prefer that the money sit useless in foreign banks instead of in shareholder pockets? That’s moronic lib thinking for you.”
No. They’d prefer diversion would be illegal and not allowed in the tax code. And if they want to bring it back, they need to pay a living wage and have at least 3rd world benefits for employees first.
But trump is right about one thing. We should have more tariffs.
- Your 401k and stock value is higher today than 2016, no?
Why would shareholders own shares if they are penalized when they realize the returns? There’s only two ways companies can return retained earnings to shareholders - buybacks and dividends. Unless you prefer money just sit in banks.
Labor is a cost - it’s idiotic to think that people will pay more than the value they receive net of differentiated skills.
- I made more money under Obama than under Trump. And last year the stock market was flat overall, so Trump had only one good year for stocks.
Use your head. You say people need to be selfish and look for their own self interest. This includes workers. Well earning a living wage and catching up with the third world in terms of benefits is a selfish interest. Unions gave them the power to be selfish and to look out for their own interests more effectively (ever try to negotiate better healthcare, vacation, or 401k matching all by your bad self?). Unions is capitalism at work, but apparently a poisonous noxious fume to the righties and have branded it that way.
“Why would shareholders own shares if they are penalized when they realize the returns?”
WTF does this mean? You want to abolish capital gains now? You’re out to lunch.
- That’s...that’s not how wealth valuation works. It doesn’t matter the percentage increase, it matters the net worth at point A vs point B. It’s much higher today because of TJCA.
Workers can devolve into a mob, but they won’t like what’s on the other side. The only thing it succeeds at is making everyone poorer. But if envy is your thing, go for it.
How else do you think shareholders realize their gains besides dividends or buybacks? If you sell, you are no longer a shareholder. We want to incentivize owners to not be owners? There shouldn’t be a corporate tax and a capital gains tax - it’s double taxation of the same money.
- “There shouldn’t be a corporate tax and a capital gains tax - it’s double taxation of the same money.”
Does that talking point actually still work? Didn’t realize there were low information voters that actually believed it still.
What do you think the cost basis is on your 1099. ? It’s not double taxation.
As for the rest, you seem to be derailing into monologuing since you seem to have launched into tangential frat boy economic theory and away from the original topic. You either need to smoke some weed or you need to pass that doobie and let me try it. It must be good stuff.
- The cost basis doesn’t include the corporate tax that was already subtracted from it. You think money should be taxed twice? Three times? Any limit?
Good luck with your unions! Seems to have gone really well for every company that’s done it the last 50 years. Paying useless middle people a share of your pay seems pretty dumb.
- New UHtz31public companies exist to create value for its shareholders, not its employees. This is rudimentary to public companies and core to their existence.
Changing the rules of the game only adds additional agency costs at this point.
They should be looking to improve incentives around org structures that are aligned to employee interests such as co-ops
- Nutanix saySomethiLove this. To all those against it, what is your interest in protecting shareholder? Buy backs were illegal intil 1982. They don't benefit anyone except the biggest shareholders
- The economy works better and we get higher growth rate when more money goes to wages and less to profits.
We know that companies and investors hoarde cash and are especially prone to hoarding it when there is an economic downtown. They will roll it into really conservative investments like government bonds or even just leave it sitting in a money market, just when the economy needs it most.
On the other hand if instead of paying a dividend (or share buyback or cash pile) you pay that same money out in wages, and especially wages to the lowest paid workers, that money is immediately spent, meaning, reinvested in the economy in another business, generating sales and creating jobs.
Also wages are spent locally whereas profits are reinvested globally.
When the economy was growing fast about 66% of national income went to wages, from the 50's to the 70's. Then in the 80s and 90s income shifted from wages to profits, about an 8% of GDP shift.
In that same time we saw GDP growth plummet and it's been anemic ever since.
Not hard to see that 8% GDP shift away from wages is the culprit. Paid as wages it likely results in an extra 2 to 3% GDP growth versus what it achieves as profits.
So we should indeed adopt policies that get that money working again, and I literally mean working: pay it to workers.
- The most significant shift in that timeframe was from wages to healthcare compensation. After tax compensation has increased for every income quintile.
In your world, a 1x ROI is good (give to person A to buy something). If that were true, communism would work. But it doesn’t 100% of the time. I’d rather people invest to create new products and services to increase our standard of living.
- It's actually very public easily checked data that 8 percent of national income shifted from wages to corporate profits.
We weren't communists when we were allocating 66% of income to wages between 1950 and 1980 so stop with the ridiculous and unproductive hyperbole.
The most efficient economy is a balanced economy. Communists we unbalanced in one direction, we are now unbalanced in the other. We have the same economic inefficiency now that feudalism had: also a failed system.
- Feel free to forward the link the the very public easily checked data that shows that the overwhelming shift wasn’t from wages to non-monetary compensation (healthcare).
Communism is the most balanced economy (literally everyone makes the same wage), and it’s the worst.
Every class has increased its standard of living over the last 30/60/300 year timeframe. Feudalism increased living standards by 2x in 1500 years; democratic capitalism does that every 30 years.
- Here is a source, insurance is listed in the last bullet:
The larger portion of labor compensation is employee compensation, which comes directly from the U.S. Bureau of Economic Analysis (BEA) and is a comprehensive measure that includes all forms of pay and benefits:
Wages and salaries
Severance payments and early retirement buyout payments
Regular supplementary allowances, such as housing allowances
The exercising of nonqualified stock options
In-kind earnings such as transit subsidies, meals, and lodging
Employer contributions to employee pension and insurance funds and to government social insurance