4 ms·

Hmm...this article, along with Elizabeth Warren's recent proposals make me think that maybe the answer we ought to be looking at is something quite simple: Prov

by darawk 7y ago

Hmm...this article, along with Elizabeth Warren's recent proposals make me think that maybe the answer we ought to be looking at is something quite simple: Provide significant tax advantages to compensating employees with equity. If the problem is that employees are losing at the expense of shareholders...well, let's make them shareholders.

solveit 7y ago
It's a bad idea to put both your money and your career into the same basket. Either the employees will immediately sell the equity, which will essentially make this just a tax cut, or (if they can't) they'll be in a dangerous position and the next recession will be devastating.
ryandrake 7y ago
You can't really make people into shareholders--at least not into successful investors. The reason many (most?) people aren't shareholders is because they simply can't afford to save. You can't eat AAPL. You can't clothe your baby in JNJ. People should "pay themselves first" as savings but the reality for the normal person working 3 jobs in order to hold their household together is there's no room to pay yourself first--you barely make enough to survive. Even if you have $100 in your pocket at the end of the month, if you use it to buy a stock you're -10% right off the bat due to brokerage fees. What are some ways a company can try to "make" their employee into one of the shareholder class? Well, they can just give their employees company stock in lieu of some other compensation, but then the employee is stuck with this risky single-equity portfolio which they either need to sell (minus transaction fees and taxes) then use to buy some other diversified investment (minus transaction fees), or hold on to and risk being the next Enron casualty. They can offer a 401K and even match contributions, but this requires the employee to deliberately elect to participate, which only makes sense if your basic needs are already met. 401Ks seem to mostly benefit middle class and affluent people who already budget for saving. Plus most 401K plans I've seen are loaded with expenses that eat a significant percentage of participants' savings. Maybe the government can step in. People talk about Basic Income... Maybe instead of cash basic income offer basic equity: every American could be issued N shares of SPY every month or something. Let everyone have some basic baseline skin in the financial system game. This helps everyone benefit, not just employees. Maybe instead of tax refunds being a big lump of cash, they can default to being issued as treasury bonds. I don't know. "Tax breaks to corporation, hoping they in turn act nice" hasn't worked out very well for us.
deleted 7y ago
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by darawk 7y ago

solveit 7y ago

It's a bad idea to put both your money and your career into the same basket. Either the employees will immediately sell the equity, which will essentially make this just a tax cut, or (if they can't) they'll be in a dangerous position and the next recession will be devastating.

ryandrake 7y ago

You can't really make people into shareholders--at least not into successful investors. The reason many (most?) people aren't shareholders is because they simply can't afford to save. You can't eat AAPL. You can't clothe your baby in JNJ. People should "pay themselves first" as savings but the reality for the normal person working 3 jobs in order to hold their household together is there's no room to pay yourself first--you barely make enough to survive. Even if you have $100 in your pocket at the end of the month, if you use it to buy a stock you're -10% right off the bat due to brokerage fees. What are some ways a company can try to "make" their employee into one of the shareholder class? Well, they can just give their employees company stock in lieu of some other compensation, but then the employee is stuck with this risky single-equity portfolio which they either need to sell (minus transaction fees and taxes) then use to buy some other diversified investment (minus transaction fees), or hold on to and risk being the next Enron casualty. They can offer a 401K and even match contributions, but this requires the employee to deliberately elect to participate, which only makes sense if your basic needs are already met. 401Ks seem to mostly benefit middle class and affluent people who already budget for saving. Plus most 401K plans I've seen are loaded with expenses that eat a significant percentage of participants' savings. Maybe the government can step in. People talk about Basic Income... Maybe instead of cash basic income offer basic equity: every American could be issued N shares of SPY every month or something. Let everyone have some basic baseline skin in the financial system game. This helps everyone benefit, not just employees. Maybe instead of tax refunds being a big lump of cash, they can default to being issued as treasury bonds. I don't know. "Tax breaks to corporation, hoping they in turn act nice" hasn't worked out very well for us.

deleted 7y ago

[deleted]