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> Unless you want employees to share the downside of business income volatility, it's unreasonable to expect them to share the upside. This is an incredibly di

> Unless you want employees to share the downside of business income volatility, it's unreasonable to expect them to share the upside. This is an incredibly dishonest statement. Employees DO indeed share the downside of business income volatility by being forced to take pay cuts when their company is going through a rough patch. I see it all the time and I've had it happen to me. Why are we pretending this is not the case?

yummyfajitas 13y ago
I'm confused. You signed on to be paid $X/month, you worked a month and were paid $X. Later you renegotiated the contract to be paid $Y < X/month, you worked a month and were paid $Y. If you want to work elsewhere for $X or $2X or whatever, you can. Downside risk: you signed on to be paid S shares/month or P% of profits. You worked a month and the share price tanked. You already took the loss.
- Adirael 13y ago
  Employees are negotiating from a vulnerable position when the options are "take pay cut or good luck finding a new job".
  - mattstreet 13y ago
    Add to that the "American Dream" of owning a house and therefore being more likely to be stuck looking for work in only one area.
  - pdonis 13y ago
    You left out an option: start your own business. What the Reuters article tells me is that there is a large pool of available labor for new businesses to use. Why aren't more people taking advantage of this opportunity?
    - unclebucknasty 13y ago
      Funny that you post that question on a forum full of people who know well from first-hand experience how difficult it is to start a successful business.
      - pdonis 13y ago
        I didn't say it wasn't difficult. Of course if the choice is between having a steady, reliable job and starting your own business, it's a lot easier to choose the steady, reliable job. But the whole point of the article in Reuters is that the job is not steady and reliable any more; that changes the relative risks involved. Also, to the extent that it's hard to start a business because of government regulation (which is a large extent), the obvious response is to remove the regulations that make it hard to start a business. That would mean more people starting businesses, hence more new jobs available for other people who are currently out of work. Funny how the Reuters article doesn't mention that.
        unclebucknasty 13y ago
        >the whole point of the article in Reuters is that the job is not steady and reliable any more That's circular reasoning where this thread is concerned. People are saying here that corporations should be sharing the upside with employees. You are saying that since they are not, people should start businesses. You're changing the subject and giving the corporations a pass. >to the extent that it's hard to start a business because of government regulation (which is a large extent), the obvious response is to remove the regulations that make it hard to start a business. Sorry about the delay. Took me a while to wipe the vomit from keyboard. Seriously, while these regulatory complaints are something that we tend to hear from people with certain political affiliations, I challenge you to cite references to actual regulations that are to any "large extent" preventing actual small businesses from starting. In fact, the implication in the Reuter's article is that businesses are doing just fine in the current regulatory environment. They are more profitable than ever at the expense of the worker. And, I think the HN populace exemplifies the actual difficulty in starting successful businesses. I doubt many here will cite regulations as a key challenge. Instead, it's actual business problems, such as product development, finding market-fit, competition, marketing, lack of capital, inability to scale, etc.
- VLM 13y ago
  "If you want to work elsewhere for $X or $2X or whatever, you can." No, you can't. Government regulations and tax codes were purchased by the companies to eliminate competition and centralize capital, such that there is only one monopoly provider of car factory jobs in your area. The .com and .gov merger made the mess, they should have to clean it up. If there was a competitive commodity free-ish market, then your plan makes sense. Sometimes that exists. Usually, very intentionally, it is prevented from existing.
- VexXtreme 13y ago
  There is nothing to be confused about, the scenario is pretty straightforward: you are presented with a (non)choice of either taking a pay cut or finding a box waiting for your on your desk. By being placed in this position, you have already been placed in a predicament where you have to accept the financial downside either in the form of taking a pay cut or having to find a new job. Again, the downside has already manifested and you are left dealing with the situation. So how exactly has being a salaried employee protected your from the said financial downside? When you're a 20something techie living in the Valley, it really doesn't matter since you'll have 5 offers waiting in your inbox tomorrow. When you're a 50 year old blue collar worker with a family, a mortgage and maybe a medical condition, this kind of situation can ruin your life. Most company owners don't readily share profits with their employees when their company is doing well but don't have a problem downsizing and cutting salaries across the board when they aren't doing so well. Since it's impossible to guarantee somebody income (even the best companies will go through rough patches), the only fair thing for managers to do is to share more wealth with the people who created that wealth when the times are good.
  - yummyfajitas 13y ago
    ...you have already been placed in a predicament where you have to accept the financial downside either in the form of taking a pay cut or having to find a new job. Again, the downside has already manifested and you are left dealing with the situation. You seem to be confusing your wages with a bond or perhaps a call option. Just because you sold something at a price $X does not mean you own some right to continue selling it at the same price. And if someone chooses not to keep paying you an old price, you have lost nothing - you simply have not gained as much as you thought you might. Being a salaried employee protects your 50 year old blue collar worker from downside because the 30 years worth of savings he piled up is completely safe even if the company goes insolvent.
    - namdnay 13y ago
      > Being a salaried employee protects your 50 year old blue collar worker from downside because the 30 years worth of savings he piled up is completely safe even if the company goes insolvent Except that a blue collar family with children don't exactly "pile" up savings... and most of those savings are tied up in his house, whose value is closely correlated to local employment. It's obvious that you are neither a blue collar worker, 50, or with children, so try to see things from that point of view instead of simply projecting your personal political beliefs
- unclebucknasty 13y ago
  The downside scenario you laid out also applies to executives who DO share the upside. Still confused?
deleted 13y ago
[deleted]
sgarg26 13y ago
This message thread calls for a graph to understand such income dynamics more carefully. :-) When a corporation that has cut wages has recovered what benefit do employees receive in relation to the strength of recovery?

yummyfajitas 13y ago

I'm confused. You signed on to be paid $X/month, you worked a month and were paid $X. Later you renegotiated the contract to be paid $Y < X/month, you worked a month and were paid $Y. If you want to work elsewhere for $X or $2X or whatever, you can. Downside risk: you signed on to be paid S shares/month or P% of profits. You worked a month and the share price tanked. You already took the loss.

Adirael 13y ago
Employees are negotiating from a vulnerable position when the options are "take pay cut or good luck finding a new job".
- mattstreet 13y ago
  Add to that the "American Dream" of owning a house and therefore being more likely to be stuck looking for work in only one area.
- pdonis 13y ago
  You left out an option: start your own business. What the Reuters article tells me is that there is a large pool of available labor for new businesses to use. Why aren't more people taking advantage of this opportunity?
  - unclebucknasty 13y ago
    Funny that you post that question on a forum full of people who know well from first-hand experience how difficult it is to start a successful business.
    - pdonis 13y ago
      I didn't say it wasn't difficult. Of course if the choice is between having a steady, reliable job and starting your own business, it's a lot easier to choose the steady, reliable job. But the whole point of the article in Reuters is that the job is not steady and reliable any more; that changes the relative risks involved. Also, to the extent that it's hard to start a business because of government regulation (which is a large extent), the obvious response is to remove the regulations that make it hard to start a business. That would mean more people starting businesses, hence more new jobs available for other people who are currently out of work. Funny how the Reuters article doesn't mention that.
      - unclebucknasty 13y ago
        >the whole point of the article in Reuters is that the job is not steady and reliable any more That's circular reasoning where this thread is concerned. People are saying here that corporations should be sharing the upside with employees. You are saying that since they are not, people should start businesses. You're changing the subject and giving the corporations a pass. >to the extent that it's hard to start a business because of government regulation (which is a large extent), the obvious response is to remove the regulations that make it hard to start a business. Sorry about the delay. Took me a while to wipe the vomit from keyboard. Seriously, while these regulatory complaints are something that we tend to hear from people with certain political affiliations, I challenge you to cite references to actual regulations that are to any "large extent" preventing actual small businesses from starting. In fact, the implication in the Reuter's article is that businesses are doing just fine in the current regulatory environment. They are more profitable than ever at the expense of the worker. And, I think the HN populace exemplifies the actual difficulty in starting successful businesses. I doubt many here will cite regulations as a key challenge. Instead, it's actual business problems, such as product development, finding market-fit, competition, marketing, lack of capital, inability to scale, etc.
VLM 13y ago
"If you want to work elsewhere for $X or $2X or whatever, you can." No, you can't. Government regulations and tax codes were purchased by the companies to eliminate competition and centralize capital, such that there is only one monopoly provider of car factory jobs in your area. The .com and .gov merger made the mess, they should have to clean it up. If there was a competitive commodity free-ish market, then your plan makes sense. Sometimes that exists. Usually, very intentionally, it is prevented from existing.
VexXtreme 13y ago
There is nothing to be confused about, the scenario is pretty straightforward: you are presented with a (non)choice of either taking a pay cut or finding a box waiting for your on your desk. By being placed in this position, you have already been placed in a predicament where you have to accept the financial downside either in the form of taking a pay cut or having to find a new job. Again, the downside has already manifested and you are left dealing with the situation. So how exactly has being a salaried employee protected your from the said financial downside? When you're a 20something techie living in the Valley, it really doesn't matter since you'll have 5 offers waiting in your inbox tomorrow. When you're a 50 year old blue collar worker with a family, a mortgage and maybe a medical condition, this kind of situation can ruin your life. Most company owners don't readily share profits with their employees when their company is doing well but don't have a problem downsizing and cutting salaries across the board when they aren't doing so well. Since it's impossible to guarantee somebody income (even the best companies will go through rough patches), the only fair thing for managers to do is to share more wealth with the people who created that wealth when the times are good.
- yummyfajitas 13y ago
  ...you have already been placed in a predicament where you have to accept the financial downside either in the form of taking a pay cut or having to find a new job. Again, the downside has already manifested and you are left dealing with the situation. You seem to be confusing your wages with a bond or perhaps a call option. Just because you sold something at a price $X does not mean you own some right to continue selling it at the same price. And if someone chooses not to keep paying you an old price, you have lost nothing - you simply have not gained as much as you thought you might. Being a salaried employee protects your 50 year old blue collar worker from downside because the 30 years worth of savings he piled up is completely safe even if the company goes insolvent.
  - namdnay 13y ago
    > Being a salaried employee protects your 50 year old blue collar worker from downside because the 30 years worth of savings he piled up is completely safe even if the company goes insolvent Except that a blue collar family with children don't exactly "pile" up savings... and most of those savings are tied up in his house, whose value is closely correlated to local employment. It's obvious that you are neither a blue collar worker, 50, or with children, so try to see things from that point of view instead of simply projecting your personal political beliefs
unclebucknasty 13y ago
The downside scenario you laid out also applies to executives who DO share the upside. Still confused?

deleted 13y ago

[deleted]

sgarg26 13y ago

This message thread calls for a graph to understand such income dynamics more carefully. :-) When a corporation that has cut wages has recovered what benefit do employees receive in relation to the strength of recovery?