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Looking at it from another angle, the laid-off employee loses nothing - they simply stop receiving. However, the owners are on the hook if the company goes bell
by jakevoytko 16y ago
Looking at it from another angle, the laid-off employee loses nothing - they simply stop receiving. However, the owners are on the hook if the company goes belly-up
The entrepreneurial system is organized so that the risk takers are the money makers when a company succeeds. It doesn't really make sense any other way - why else would someone start a business that might fail and cost a fortune?
- jbarham 16y agoA lot of those laid-off people who "simply stop receiving" their paychecks are losing their houses. And the whole point of incorporation is that if the company goes bust, the owners are not personally liable. The risk-reward incentives for being an employee vs. employer are not quite so simple as you make out.
- astine 16y agoA lot of those people who are losing their houses are losing them because they treated money they had not yet earned as an asset. Unless your employment contract says you have tenure, you should act as if it does.
- davidbr02 16y agoThen nobody would ever be able to buy a house with anything less than cash. Nobody has a guaranteed job for the next 30 years
- watmough 16y agoRemember the mortgage is secured on the house, so in a non-recourse state, you can simply hand the house back to the lender and walk-away. This is how commercial real estate works. Can't fill the building? Hand it back to the lender.
- astine 16y ago"Then nobody would ever be able to buy a house with anything less than cash." I've heard worse advice. That would have avoided the mortgage crisis anyway. The fact that the default in so many markets is to 'buy' things with borrowed money is probably for the worse. I'm not saying one should never go into debt, but, plan ahead. Your job is not a given so make sure you have a buffer.
- yummyfajitas 16y agoIf you don't have a guaranteed job, don't take out a mortgage under the assumption you'll never lose your job.
- pvdm 16y agoIn a public traded company, the owners are the stock holders. Some of the people running the company hired by the shareholders are paid well and do not suffer any consequences if they do a poor job. This is how big corporations work.
- gaius 16y agoNo they aren't - that's what "limited liability" means.