11 ms·

Paying a wage = sharing your profits, just not on a % base, but a fixed amount. But in the end it's still: less profits for the founder, and more profit for the

by jerrre 4y ago

Paying a wage = sharing your profits, just not on a % base, but a fixed amount. But in the end it's still: less profits for the founder, and more profit for the employee.

varispeed 4y ago
Wage is a cost and profit comes after costs. If owner want's to share profit, they need to give company shares to the employees and pay dividends.
- HideousKojima 4y ago
  A cost that cuts into what would otherwise be profits. It's all fungible so you're quibbling about an accounting issue here. If an owner made a contract with an employee that they will pay them a $0 salary but will pay them a fixed annual dividend of $100,000 (broken up into convenient bi-weekly payments) would that fix your concern? I'm getting the impression that it wouldn't.
  - sidlls 4y ago
    This is disingenuous. Money is fungible but the flow of money is not. My buying weekly groceries is not the same as my putting a down payment on a new car: they're two different activities that use the same fungible source as a medium of exchange. Likewise, if I run a business, paying a fixed wage to an employee is not the same as distributing profit in the form of dividends to shareholders: the fungible medium of exchange is weighted differently, comes from different sources, and is used for different purposes.
  - welshwelsh 4y ago
    You're right, that wouldn't fix it. Fixing the problem would mean that instead of the 'owner' hiring an 'employee,' they instead form an equal partnership as co-owners. Because the business serves the interest of the owners, it will seek to maximize their compensation as the ultimate goal, rather than to minimize their salary as a way of reducing expenses.
  - varispeed 4y ago
    That would be illegal in my country. Dividend is considered an unearned income and is taxed differently as well. They could perhaps give the worker a minimum wage and the rest pay in dividends, but mind that dividends need to be distributed among all the shareholders equally, so you can't say you would pay $100,000 unless you allocate shares so that when dividend pay out is decided, worker's shares will yield that exact amount.
vasco 4y ago
Also this is not about a dystopian village with one single employer that exploits workers that cannot move. Startup employees agree with free choice to work somewhere for the agreed upon profit share, be that % based or fixed, or mixed.
- VictorPath 4y ago
  - Brigand 4y ago
    I am pretty sure among hunters there was a very strict pecking order and I am glad to live in the system we have today.
    - achenet 4y ago
      any proof of that statement? from reading description of native american societies in Dawn of Everything, the opposite seems to be the case.
    - wing-_-nuts 4y ago
      They really didn't. Hunter gatherer societies were the most democratic and egalitarian that we've ever had. Graeber's work on this is fantastic.
  - judge2020 4y ago
    Hunter-gatherer bands don't exactly survive without families to continue the cycle of reproduction, someone to take care of the children, someone to tend to the wounded and sick, someone to build the houses while the hunter-gatherers are out hunting, someone to grow crops when it's cold and food is harder to hunt for, someone to track how much food everyone is getting...
    - necovek 4y ago
      I did not read the original reply to mean that "hunter-gatherer band" only consists of hunters and gatherers. And while there is certainly division of labour as you describe it, it does not necessarily imply that these are distinct social classes (even today, we have different job roles in a single social class).
VictorPath 4y ago
The argument he is arguing against is that the workers create the wealth, and profit is that unpaid surplus labor time that the LPs/VCs/founders expropriate from the workers creating wealth. You can't "share" profits with workers when workers are creating all the wealth, the LPs/VCs etc. expropriate profits from workers.
- HideousKojima 4y ago
  So if the people providing the funding weren't there, where would the salary for the workers who are currently getting their surplus labor expropriated come from? If these workers are getting unjustly exploited, then what's to keep them from starting a co-op together where they share all profits? Plenty of co-ops exist in modern day capitalist societies, including several successful ones like WinCo in the US and Mondragon Corporation in Spain. No one is forcing these employees to give up their "surplus labor" to investors.
roflyear 4y ago
No not really. If I generate $1m of value for a company and they pay me $90k a year that isn't really sharing profit.
- jstanley 4y ago
  But if you cost the company $1m you still get your $90k.
  - WitCanStain 4y ago
    More likely you get fired.
  - roflyear 4y ago
    Hopefully you do not have many employees that are costing you $1m a year...
    - necovek 4y ago
      Look at the cost of Zuckerberg's metaverse push to Meta, and Musk's work to Twitter: sure, that's currently sitting at a lot more than that, but they are hoping to turn that around in a number of years. Which is to say that cost/value proposition is never simple. I've been at companies where people were paid simply not to jump to competitors.
      - dotnet00 4y ago
        It isn't even limited to high profile cases like those. Same goes for a lot of hiring (in junior positions especially), it often takes some time for the employee to learn the ropes, during which time their cost (both in terms of direct costs like salary, benefits and equipment and indirect costs like the time of the people bringing them up to speed) is almost definitely higher than the value they're bringing to the business.
        necovek 4y ago
jmyeet 4y ago
Are you familiar with "debt bondage"? Technically, the brick kiln workers of India and Pakistan are paid a wage [1]. Closer to home, Amazin warehouse workers probably wouldn't consider themselves as sharing in Amazon's profits. Let me summarize: 1. Debt is built into your existence (student, medical, housing, etc); 2. The system is designed to extract (exploit) value from labor; and 3. There is no value without labor. [1]: https://www.antislavery.org/what-we-do/past-projects/india-debt-bondage/ https://www.antislavery.org/what-we-do/past-projects/india-d...
- judge2020 4y ago
  What is your point? OP's comment was about how revenue - (other employees wages) = profit, not the actual details surrounding working for a wage.
  - jmyeet 4y ago
    And that revenue wouldn’t exist without labor. That’s the point. So offering to “share” that in the form of mostly fixed wages both betrays a presumption of ownership and gives a false appearance of charity or benevolence.
shadowfoxx 4y ago
This is a fun semantic game but Profits are not the cost of doing business. When you have an employee sign a contract for $X dollars per year, that's a cost. Conflating Revenue and Profit for the sake of an argument is bad faith. My Assumption here is that the common usage of profit is, "Money after all expenses paid", which employee compensation is clearly outside of that definition.
- lolinder 4y ago
  Don't assume bad faith: that their framing is unorthodox doesn't make it misleading. Money is fungible and what we identify as "expenses" versus "profit shared" is arbitrary. Economic value is created by the enterprise, and that value is then split between the owner, the employees, the suppliers, and the customers. We can argue about whether the distribution is fair, but complaining about the specific accounting method by which the value is distributed is myopic. Either you're getting a fair share of the economic value or you aren't—whether your share comes of the pre- or post-tax portion of the pie is the government's concern, not yours.
  - shadowfoxx 4y ago
    I think people are largely arguing over whether or not the share of economic value is proportional to contributions and when they talk about that share they typically refer to profits. I think redefining/reframing what profit means in this conversation is intentionally misunderstanding/redirecting the argument. Workers: "We should see more of the profits the company makes and we are making the case that collectively we produce a larger portion of the value we're asking for" Poster: "Your pay is part of the profit, the more money you make the less that goes to the owner" You're right. I shouldn't assume a framing is misleading just because its unorthodox, I'm attempting to make a case for the framing being misleading with supporting statements. At best the parent comment isn't saying anything of substance at all (in response to ITS parent comment), and in my view, at worst its an attempt to redirect the concept of 'profit' to make the argument seem less credible.
    - lolinder 4y ago

by jerrre 4y ago

Paying a wage = sharing your profits, just not on a % base, but a fixed amount. But in the end it's still: less profits for the founder, and more profit for the employee.

varispeed 4y ago

Wage is a cost and profit comes after costs. If owner want's to share profit, they need to give company shares to the employees and pay dividends.

HideousKojima 4y ago
A cost that cuts into what would otherwise be profits. It's all fungible so you're quibbling about an accounting issue here. If an owner made a contract with an employee that they will pay them a $0 salary but will pay them a fixed annual dividend of $100,000 (broken up into convenient bi-weekly payments) would that fix your concern? I'm getting the impression that it wouldn't.
- sidlls 4y ago
  This is disingenuous. Money is fungible but the flow of money is not. My buying weekly groceries is not the same as my putting a down payment on a new car: they're two different activities that use the same fungible source as a medium of exchange. Likewise, if I run a business, paying a fixed wage to an employee is not the same as distributing profit in the form of dividends to shareholders: the fungible medium of exchange is weighted differently, comes from different sources, and is used for different purposes.
- welshwelsh 4y ago
  You're right, that wouldn't fix it. Fixing the problem would mean that instead of the 'owner' hiring an 'employee,' they instead form an equal partnership as co-owners. Because the business serves the interest of the owners, it will seek to maximize their compensation as the ultimate goal, rather than to minimize their salary as a way of reducing expenses.
- varispeed 4y ago
  That would be illegal in my country. Dividend is considered an unearned income and is taxed differently as well. They could perhaps give the worker a minimum wage and the rest pay in dividends, but mind that dividends need to be distributed among all the shareholders equally, so you can't say you would pay $100,000 unless you allocate shares so that when dividend pay out is decided, worker's shares will yield that exact amount.

vasco 4y ago

Also this is not about a dystopian village with one single employer that exploits workers that cannot move. Startup employees agree with free choice to work somewhere for the agreed upon profit share, be that % based or fixed, or mixed.

VictorPath 4y ago
- Brigand 4y ago
  I am pretty sure among hunters there was a very strict pecking order and I am glad to live in the system we have today.
  - achenet 4y ago
    any proof of that statement? from reading description of native american societies in Dawn of Everything, the opposite seems to be the case.
  - wing-_-nuts 4y ago
    They really didn't. Hunter gatherer societies were the most democratic and egalitarian that we've ever had. Graeber's work on this is fantastic.
- judge2020 4y ago
  Hunter-gatherer bands don't exactly survive without families to continue the cycle of reproduction, someone to take care of the children, someone to tend to the wounded and sick, someone to build the houses while the hunter-gatherers are out hunting, someone to grow crops when it's cold and food is harder to hunt for, someone to track how much food everyone is getting...
  - necovek 4y ago
    I did not read the original reply to mean that "hunter-gatherer band" only consists of hunters and gatherers. And while there is certainly division of labour as you describe it, it does not necessarily imply that these are distinct social classes (even today, we have different job roles in a single social class).

VictorPath 4y ago

The argument he is arguing against is that the workers create the wealth, and profit is that unpaid surplus labor time that the LPs/VCs/founders expropriate from the workers creating wealth. You can't "share" profits with workers when workers are creating all the wealth, the LPs/VCs etc. expropriate profits from workers.

HideousKojima 4y ago
So if the people providing the funding weren't there, where would the salary for the workers who are currently getting their surplus labor expropriated come from? If these workers are getting unjustly exploited, then what's to keep them from starting a co-op together where they share all profits? Plenty of co-ops exist in modern day capitalist societies, including several successful ones like WinCo in the US and Mondragon Corporation in Spain. No one is forcing these employees to give up their "surplus labor" to investors.

roflyear 4y ago

No not really. If I generate $1m of value for a company and they pay me $90k a year that isn't really sharing profit.

jstanley 4y ago
But if you cost the company $1m you still get your $90k.
- WitCanStain 4y ago
  More likely you get fired.
- roflyear 4y ago
  Hopefully you do not have many employees that are costing you $1m a year...
  - necovek 4y ago
    Look at the cost of Zuckerberg's metaverse push to Meta, and Musk's work to Twitter: sure, that's currently sitting at a lot more than that, but they are hoping to turn that around in a number of years. Which is to say that cost/value proposition is never simple. I've been at companies where people were paid simply not to jump to competitors.
    - dotnet00 4y ago
      It isn't even limited to high profile cases like those. Same goes for a lot of hiring (in junior positions especially), it often takes some time for the employee to learn the ropes, during which time their cost (both in terms of direct costs like salary, benefits and equipment and indirect costs like the time of the people bringing them up to speed) is almost definitely higher than the value they're bringing to the business.
      - necovek 4y ago

jmyeet 4y ago

Are you familiar with "debt bondage"? Technically, the brick kiln workers of India and Pakistan are paid a wage [1]. Closer to home, Amazin warehouse workers probably wouldn't consider themselves as sharing in Amazon's profits. Let me summarize: 1. Debt is built into your existence (student, medical, housing, etc); 2. The system is designed to extract (exploit) value from labor; and 3. There is no value without labor. [1]: https://www.antislavery.org/what-we-do/past-projects/india-debt-bondage/ https://www.antislavery.org/what-we-do/past-projects/india-d...

judge2020 4y ago
What is your point? OP's comment was about how revenue - (other employees wages) = profit, not the actual details surrounding working for a wage.
- jmyeet 4y ago
  And that revenue wouldn’t exist without labor. That’s the point. So offering to “share” that in the form of mostly fixed wages both betrays a presumption of ownership and gives a false appearance of charity or benevolence.

shadowfoxx 4y ago

This is a fun semantic game but Profits are not the cost of doing business. When you have an employee sign a contract for $X dollars per year, that's a cost. Conflating Revenue and Profit for the sake of an argument is bad faith. My Assumption here is that the common usage of profit is, "Money after all expenses paid", which employee compensation is clearly outside of that definition.

lolinder 4y ago
Don't assume bad faith: that their framing is unorthodox doesn't make it misleading. Money is fungible and what we identify as "expenses" versus "profit shared" is arbitrary. Economic value is created by the enterprise, and that value is then split between the owner, the employees, the suppliers, and the customers. We can argue about whether the distribution is fair, but complaining about the specific accounting method by which the value is distributed is myopic. Either you're getting a fair share of the economic value or you aren't—whether your share comes of the pre- or post-tax portion of the pie is the government's concern, not yours.
- shadowfoxx 4y ago
  I think people are largely arguing over whether or not the share of economic value is proportional to contributions and when they talk about that share they typically refer to profits. I think redefining/reframing what profit means in this conversation is intentionally misunderstanding/redirecting the argument. Workers: "We should see more of the profits the company makes and we are making the case that collectively we produce a larger portion of the value we're asking for" Poster: "Your pay is part of the profit, the more money you make the less that goes to the owner" You're right. I shouldn't assume a framing is misleading just because its unorthodox, I'm attempting to make a case for the framing being misleading with supporting statements. At best the parent comment isn't saying anything of substance at all (in response to ITS parent comment), and in my view, at worst its an attempt to redirect the concept of 'profit' to make the argument seem less credible.
  - lolinder 4y ago