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But they don't generally share in the bad times. If a company has a bad year most people don't take a pay cut. And they definitely won't get paid nothing for a

But they don't generally share in the bad times. If a company has a bad year most people don't take a pay cut. And they definitely won't get paid nothing for a year while lending money to the company!!! For example you own a local garage. On normal years to make $500,000. Your costs are $400,000. One year thing go bad and you only make $300,000. In most cases the owner will borrow the money to cover the difference. Maybe someone is let go but in most cases the owner tries to retain the staff hoping next year is back to normal. Maybe the owner will use his own money rather than borrow. In any case they will find the money somehow or close. And remember this is at the same time as having your salary reduced to $0! Eventually the owner wants to recoup and protect themselves from any bad year. But at a $100,000 profit a year, and remember this is pre tax, and profits are double taxed for the owner, then how long will it take to save pay them back and save enough for the next bad year? So if one year he make $600,000, or double the profits, he needs to keep those profits for the bad years. Now big corporations are slightly different but at the same time they need to be absorb harder years. So right now they squeezing profits but at some point those profits will be needed for a bad year. Or perhaps it was to pay for the recent bad years in which they may have acquire debt... Some corporations are greedy, but a lot aren't. You have to look at the multi year picture when it comes to profit sharing. And most employees are not willing to loan money to a corporation in a bad year like the owners will most likely have to ;)

tomp 13y ago
> most cases the owner tries to retain the staff hoping next year is back to normal Any evidence to support that claim? Especially during the crises (when there is not one, but several years), I think it's not very true. > profits are double taxed for the owner They are not double taxed if they are reinvested in the company (or saved as insurance for bad years). > the owners will most likely have to [loan money to a corporation] Really? Any recent examples?
MereInterest 13y ago
You're assuming that both the company and that division of the company survives. If it goes under, if labor is outsourced, if a factory closes, the workers lose their jobs. Of course they share in the bad times, and far more than the owners of the company do, since the workers have more at stake.
josho 13y ago
You present a false choice here, regarding employees not "generally sharing in the bad times". The CEOs of these companies often don't share in the bad times either, while they most certainly are rewarded for the good times. Why should it be any different for all levels of employees? Now, regarding the owner of a small business loaning their company money, while employees do not. Employees are not given the choice, likely because the loan is to high of risk for the average employee given their personal net worth and as important most owner's don't want their employees to be given the option (ie. as an owner of a garage I would not want my employees having that level of access to the company's finances). The primary issue however is the treatment of labor, let's not get lost in details of risk/loans/etc. Given that technology is leading to a surplus of labor, a general multi-decade trend against labor. The question that society needs to address is how do we treat labor? Business can exploit labor pushing what's acceptable, which will lead to larger wins for industry as we can already see today, but is that right? I think you and I differ in opinion on the answer to that question.

tomp 13y ago

> most cases the owner tries to retain the staff hoping next year is back to normal Any evidence to support that claim? Especially during the crises (when there is not one, but several years), I think it's not very true. > profits are double taxed for the owner They are not double taxed if they are reinvested in the company (or saved as insurance for bad years). > the owners will most likely have to [loan money to a corporation] Really? Any recent examples?

MereInterest 13y ago

You're assuming that both the company and that division of the company survives. If it goes under, if labor is outsourced, if a factory closes, the workers lose their jobs. Of course they share in the bad times, and far more than the owners of the company do, since the workers have more at stake.

josho 13y ago

You present a false choice here, regarding employees not "generally sharing in the bad times". The CEOs of these companies often don't share in the bad times either, while they most certainly are rewarded for the good times. Why should it be any different for all levels of employees? Now, regarding the owner of a small business loaning their company money, while employees do not. Employees are not given the choice, likely because the loan is to high of risk for the average employee given their personal net worth and as important most owner's don't want their employees to be given the option (ie. as an owner of a garage I would not want my employees having that level of access to the company's finances). The primary issue however is the treatment of labor, let's not get lost in details of risk/loans/etc. Given that technology is leading to a surplus of labor, a general multi-decade trend against labor. The question that society needs to address is how do we treat labor? Business can exploit labor pushing what's acceptable, which will lead to larger wins for industry as we can already see today, but is that right? I think you and I differ in opinion on the answer to that question.