Are pensions a burden on the former employer?

No one does it alone. Larry Ellison doesn't write every line of code in his products. Without employees, the employer is dead in the water. It's a partnership. Or it should be a partnership. When the employer is sucking up all the profits and isn't sharing them with people who make the profits... not a good long-term thing.
 
Employees are like any other resource: water, bricks, lumber, space. Few are talented enough to make or break your business.
 
Employers who view quality employees like they do consumables instead of as valuable assets are destined for mediocrity at best.
 
DamnYankee said:
It makes sense if you don't understand capitalism.

The employer takes all the risk. He designs the product with no guarantee of success. He borrows capital and pays interest on it for months or years before he makes his first sale. He has to make critical decisions with respect to factory size and location, and has to bend over to comply with local, state and federal laws put together by bureaucrats that have unlimited time and resources, and no interest in his profitability. He then has to hire people, many times dealing with unions whose only interest is making money off him.

He can't buy labor for less than the market allows. And he has to pay them benefits, insurance, and keep then safe.

After making the product he has to pay to advertise, then sales commisions to keep the stock moving out the door and money coming in to pay his bills. He'll likely work 80-100 hours per week for several years, no vacations for himself or with his family, to avoid bankruptcy.

After all that, he draws his own paycheck.

I've been there, and I've got friends who have been there. Several lost their marriages because of the stress. If these guys make billions I say "good for them".
Click to expand...


This is a conversation about the economics of a firm, not entrepreneurship. I'm happy to discuss either, but make it clear if you choose not to argue the LTV.
 
DamnYankee said:
Employees are like any other resource: water, bricks, lumber, space. Few are talented enough to make or break your business.
Click to expand...

Workers are the sole reason a business, and an economy, is able to function. Without them, no goods would be produced, no services would be provided, and the economy would disintegrate.

On the other hand, a manager - the employer, the boss, the capitalist, or whatever you'd like to call them - is no more vital to the economy than a tick, a leech, or any other parasite. They have no value in the market; they produce nothing, but instead feed off the labors of others. And anyone with even a basic understanding of economics knows that if they did not exist, the economy would continue on, but at a more efficient and equitable pace.
 
Rose Captain said:
Workers are the sole reason a business, and an economy, is able to function. Without them, no goods would be produced, no services would be provided, and the economy would disintegrate.

On the other hand, a manager - the employer, the boss, the capitalist, or whatever you'd like to call them - is no more vital to the economy than a tick, a leech, or any other parasite. They have no value in the market; they produce nothing, but instead feed off the labors of others. And anyone with even a basic understanding of economics knows that if they did not exist, the economy would continue on, but at a more efficient and equitable pace.
Click to expand...

Try operating the business without them.
 
DamnYankee said:
Try operating the business without them.
Click to expand...

Folks have. They (cooperatives) worked great in Argentina before the Treasury Department stepped in. They flourished during the Italian and Spanish economic declines while top-down businesses crumbled. There's a significant body of research to say that they're more efficient than top-downs. When established, they can't outsource jobs and have incentive to protect the local environment. And the last number I saw (it was on PBS, or something) said that cooperatives took in an annual $400M in revenue in the United States.
 
http://thinkprogress.org/economy/2013/06/07/2123831/rich-entrepreneur-the-wealthy-arent-job-creators-middle-class-workers-are/

On Thursday, entrepreneur and self-described one percenter Nick Hanauer warned Congress that rich people like him aren’t the engines of the economy. In a testimony before the Senate Banking Committee, he explained why, in fact, middle-class workers are the economy’s real job creators:

In the same way that it’s a fact that the sun, not earth is the center of the solar system, it’s also a fact that the middle class, not rich business people like me are the center of America’s economy. […]

As an entrepreneur and investor, I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all would have failed and all those jobs would have evaporated.

He described what he calls a “virtuous cycle” in which middle class consumers have money to buy goods, which increases demand and therefore hiring. The rich, on the other hand, don’t fuel the economy with their consumption in the same way. “I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff,” he noted.

But the country’s policies pretend otherwise. He included facts that display how skewed America’s policy priorities really are:

Corporate profits and unemployment are simultaneously at 50-year highs.
The share of income for the richest 1 percent has tripled since 1980 while their taxes have only risen by 50 percent.
The rich enjoy a 15-20 percent tax rate on capital gains, dividends, and carried interest while the top marginal rate on middle class Americans is 39 percent.

He concludes, “Tax the wealthy and corporations – as we once did in this country – and invest that money in the middle class-as we once did in this country.”
Click to expand...
 
I think now that tekkychick posted that link, some explanation of capitalist economics is due. I'll phrase it like this:

There are three really big principals in modern economics. Positive and negative incentive from Friedman, surplus value from Marx, and circular flow from Keynes. Once you understand these three, you have a usable understanding of capitalism. So, on the topic of the third, you absolutely need to be familiar with how money flows through the economy. And while I don't generally tend to side with Keynes' bourgeois economics, he developed this idea above and beyond any other figure in history. He posed that it works like this: Money is spend on some product(s); the maker(s) of the product(s) find out that more people are willing to purchase their product(s); they make more; in order to make more, they need more workers; they hire more workers, who earn a wage; this wage is spent on some product(s); the cycle continues.

Now there's another component to this. Those who earn a low wage (or no wage) will spend any additional income to increase their standard of living. This is true for almost all members of the population, but there's an upper limit (which varies based on the value of currency and the cost of goods). Once you go past this limit, individuals cannot, or don't need to, increase their standard of living. Any additional income here is stored, not spent.

Then why, you may ask, is the country not taking measures to raise income equality? Well, power has a way of extenuating itself. Adam Smith had a theory which I think is more than applicable here: That the public decisions of a country structured like the US/Britain are almost always representative of the wills of the upper class.
 
Rose Captain said:
Folks have. They (cooperatives) worked great in Argentina before the Treasury Department stepped in. They flourished during the Italian and Spanish economic declines while top-down businesses crumbled. There's a significant body of research to say that they're more efficient than top-downs. When established, they can't outsource jobs and have incentive to protect the local environment. And the last number I saw (it was on PBS, or something) said that cooperatives took in an annual $400M in revenue in the United States.
Click to expand...

$400M? Wow that's huge. What percentage of GDP is that?
 
First post from a non rocket scientist so be kind :)

The keynes theory went totally out the window with companies who saw increased product demand decided to create jobs for communist chinese and take 6.5 +million livable wage jobs from americans. Who not only dont have any disposable cash to buy their products may have to be on public assistance, food stamps etc. That of course doesnt include all the additional jobs sent to India, indonesia and the phillipines and bangladesh you get the picture.
Americans cant buy this economy out of its malais, the corporate interests seem to have assured that. What going to exascerbate the problem is automation technology thats going to put more people out of work.
This country is going to have 60% plus of its population in 3rd world status. We all know everyone cant be rich and successful and educated and have a degree and a profession. Cant all be Drs Lawyers and Indian Chiefs.
Some where along the line the Rich had better decide that they are Americans and that Helping Americans and America means more than a few extra bucks profit. You get to the point to many americans are hurting then we may have a real revolution where the peasants storm the castle and the Baron is rich no more. Just rambling uneducated thoughts :)
 
Yoda said:
..
Americans cant buy this economy out of its malais, the corporate interests seem to have assured that. What going to exascerbate the problem is automation technology thats going to put more people out of work.
Click to expand...
Good start with a terrible follow-through.

1. "Corporate interests" are profits, which are good for the economy.
2. Automation is awesome for the economy since more wealth can be produced with less labor.
 
No it doesn't matter where the money is invested. If they buy a nice house for themselves then that helps home builders and the real estate market. If they toss it into the bank then the bank has more capital to lend and interest rates go down....
 
You must log in or register to reply here.
Back
Top