4 ms·

Your competition gives away free money. That’s, hard to compete with. Also, I’m not sure what people think the margins are in most industries, but there isn’t a

Your competition gives away free money. That’s, hard to compete with. Also, I’m not sure what people think the margins are in most industries, but there isn’t a lot of wiggle room to raise wages unless you are Walmart. If you want wages to go up, costs need to be passed on to consumers and thus you have the that nasty “inflation” word that gets thrown around a lot.

pwinnski 5y ago
Take a look at a 25-year chart of corporate profits[0]. While there was a dip in 2020 due to the pandemic, corporate profits are otherwise at an all-time high. There's no need to pass on higher costs to consumer, companies could accept, say, 2010-level profits instead. Or even 2000-level profits, and really boost wages! There are undoubtedly some companies operating at very low margins, but by and large, there has been a dramatic increase in profit-taking by companies, without corresponding increases in wages. 0. https://tradingeconomics.com/united-states/corporate-profits https://tradingeconomics.com/united-states/corporate-profits
- prepend 5y ago
  There’s no need for anything. But good luck figuring out a way to reduce corporate profits. Consider that your graph is just the for profit companies and there’s lots of nonprofits and gov-run orgs already. It’s a tough problem to try to have companies raise wages and reduce profits. Not sure of any legislative examples. Minimum wage laws tend to result in higher prices and fewer positions. Companies have business models with existing margins and any changes are hard given capital markets and competition. Look at what happened with insurance profits when the ACA introduced payout requirements. [0] Costs increased and so did profits. Profits weren’t decreased and bonuses weren’t decreased, insurers just raised costs to the level to support the profit and bonus levels. This did not reduce costs nor insurance profits, instead it increased costs. [1] [0] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/
  - pwinnski 5y ago
    Absolutely agree, but this is a radically different argument than GP was making, and it is to that argument I was responding. If you want to instead talk about unrealistic expectations baked into corporate earnings, then you'll get no disagreement from me!
- aaron-santos 5y ago
  In other words, the current system is operating exactly as intended. Any change would disrupt the natural profit-taking tendency.
- listless 5y ago
  That’s the “Walmart” qualification I made. And I agree 100%. Big corps that can pay should absolutely do that. But they aren’t going to. I know that because if they were, they would have done it already. You could force it up with this stimulus, but only big Corp would survive it.
amanaplanacanal 5y ago
How can they be your competition if they don’t offer a comparable product or service? That’s not any kind of competition I understand.
- listless 5y ago
  Fair point. Maybe we could say “labor competition”?

pwinnski 5y ago

Take a look at a 25-year chart of corporate profits[0]. While there was a dip in 2020 due to the pandemic, corporate profits are otherwise at an all-time high. There's no need to pass on higher costs to consumer, companies could accept, say, 2010-level profits instead. Or even 2000-level profits, and really boost wages! There are undoubtedly some companies operating at very low margins, but by and large, there has been a dramatic increase in profit-taking by companies, without corresponding increases in wages. 0. https://tradingeconomics.com/united-states/corporate-profits https://tradingeconomics.com/united-states/corporate-profits

prepend 5y ago
There’s no need for anything. But good luck figuring out a way to reduce corporate profits. Consider that your graph is just the for profit companies and there’s lots of nonprofits and gov-run orgs already. It’s a tough problem to try to have companies raise wages and reduce profits. Not sure of any legislative examples. Minimum wage laws tend to result in higher prices and fewer positions. Companies have business models with existing margins and any changes are hard given capital markets and competition. Look at what happened with insurance profits when the ACA introduced payout requirements. [0] Costs increased and so did profits. Profits weren’t decreased and bonuses weren’t decreased, insurers just raised costs to the level to support the profit and bonus levels. This did not reduce costs nor insurance profits, instead it increased costs. [1] [0] https://www.healthcare.gov/health-care-law-protections/rate-review/ https://www.healthcare.gov/health-care-law-protections/rate-... [1] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5145008/
- pwinnski 5y ago
  Absolutely agree, but this is a radically different argument than GP was making, and it is to that argument I was responding. If you want to instead talk about unrealistic expectations baked into corporate earnings, then you'll get no disagreement from me!
aaron-santos 5y ago
In other words, the current system is operating exactly as intended. Any change would disrupt the natural profit-taking tendency.
listless 5y ago
That’s the “Walmart” qualification I made. And I agree 100%. Big corps that can pay should absolutely do that. But they aren’t going to. I know that because if they were, they would have done it already. You could force it up with this stimulus, but only big Corp would survive it.

amanaplanacanal 5y ago

How can they be your competition if they don’t offer a comparable product or service? That’s not any kind of competition I understand.

listless 5y ago
Fair point. Maybe we could say “labor competition”?