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You are of course obviously correct. Employees, at least those earning income from real labor, always share the downside of business income volatility. In fac
by Quequau 13y ago
You are of course obviously correct.
Employees, at least those earning income from real labor, always share the downside of business income volatility. In fact, it's arguably an outsized share. One simply needs to observe the various employment metrics, and their rate of change. Particularly those tracking layoffs, discharges, and other involuntary separations initiated by employers.
What's perhaps even more illustrative are the comparisons of job requirements and starting salaries for positions with similar responsibilities; found in employment advertisements before, during, and after a "business cycle".
In fact I've read several studies showing that people who happen to graduate and enter the workforce during the nadir of financial crises earn, over the course of their entire career, substantially lower wages as compared to people who simply happen to enter the workforce at any other point of the business cycle.
- syntaxfree 13y agoThey share some risk in the form of correlations to the actual risk to their employment contracts. But employees who are fired during downturns walk away with all of their human capital and most of their future earning potential (minus what the firing signals in their CV), while the downturn chips away at the firm's capital. Let me put this another way: no one is really entitled to a job; not in the way their entitled to their properties, which have a _title to their name_. Capital, on the other hand, risks its very entitlement. Employees don't have any assets seized during a downturn. If they wanted to share in the risk and return, they could have bought stock.