Is it just me? Corporations

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Don't get me wrong folks, I'm all for profitable corporations because it's good for everyone involved including me as say an investor. But there has to be a certain portion for wages that is fair and sustainable worked into the business model and then left alone because they should look at it as an investment that will pay dividends into their profits down the road as the economy functions well and cyclically.
 
Originally Posted By: 4WD
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The corporate executives have no loyalty either … keep raising taxes and they move headquarters abroad … many have.


Yeah you would think with all the economic summits, countries would all get together and have one equivalent tax rate to stop the running around the world business and playing everyone off each other so they are the winners and every other country looses out on tax revenues that they have to keep racing to the bottom just to try and keep them here.
 
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Originally Posted By: StevieC
Is it just me or does it seem that corporations today fail to realize that by being stingy with wages and rolling back wages / cutting work force that they along with others are only shooting themselves in the foot over the long term because consumer spending is then cut back out of necessity.

It's like they can't see that one hand feeds the other and that if they give a little they will get a lot in return with benefit of a stable society where inflation grows and so do their profits and everyone is happy.

Seems to me the cycle is broken and they just keep breaking it further ?!?


Not so sure.

I think they have a more global approach.
You can sell only in the US or EU and so forth, or you can try to bring the rest of the world along.

I'm not saying they are doing these things out of purely altruistic goals.

I really believe the big drivers of this are automation and offshoring pollution. Many jobs no longer exist because robots now do them.

I do see offshoring in the IT world. That is really a money issue. If you can pay someone $30/day or pay someone here $300/day to do the same thing, which are you going to do?

Companies are not in the community building business. It would be nice if they supported the communities where they operate. But on the other hand, how many communities make it difficult for the corporation or milk that cow dry, so to speak, making it an easy decision to leave?

It has to go both ways if you are looking for a mutually beneficial relationship.
 
Senior management, even owners are aware of that slippery slope. They know 10-15 years of sustainable growth is about all you can expect nowadays. So they pad the wallets of investors and senior management during that time, sell out, move on. Just before collapse. The new business books studied at college by the next generation of senior execs has the sustainable growth, training, workers pensions, healthcare pages omitted. Replaced by get rich quick by slashing, cutting, move on. There are rare exceptions like google, who want to take over the world, but for the most part lifelong employment with pensions and benefits is extinct. Unless of course you work for Uncle Sam.
 
You're definately right about it being an employers market. Globalization is forcing American labor to compete with cheap labor in the developing world. Thats why inflation adjusted wages haven't gone up in so long. Its great if you own a tech company in silicon valley, bad if you work in a factory or elsewhere. All regular American workers can do is to aquire a skillset that pays better than what they make, its hard out there now.
 
You know I'm so glad I have a rental property and I'm about to buy my second one. Pretty soon the first one will be paid and it will be an income stream for life and in 15 years the second one I want to buy will be paid. At least I have protected my future. But if these folks don't have a job how do I get my rent.

It's a 0 sum game I guess.
frown.gif
 
The income tax law only still applies to corporations, that is why you are "corporatized" on the day that you are born. Just refer to your birth certificate-It is in all capital letters, and is a corporate "fiction" of a real live person.
 
One of the school districts I currently work for realized that hiring IT contractors for $14 an hour vs. having a full-time town employee was a very bad idea.

The contractors were pretty much a revolving door. They all worked with the company less than a year before moving on to something else. This caused many headaches for the school district because they were constantly dealing with training new people, no documentation for their systems and info, and lack of planning/motivation by the employees. Good luck replacing 3 full-time people with different roles who make $50k+ a year with one person who makes $14/hr and has the same responsibility. The administrators were so focused on saving money, they didn't realize that their service would suffer because of what they were getting.

My task has been to "fix-up" some of these districts and piece them back together and it has been a nightmare. Some people would just quit on the spot due to stress, and not leave any documentation on servers and applications. When the servers go down, nobody had the password except the guy who quit who definitely won't be answering his phone.

Sometimes being cheap costs more in the long run, and I think some organizations are beginning to understand this.
 
Rental properties are big money in my area. Most are at 95% occupancy, 75% of renters are off shore IT contractors and computer programmers here on work Visa. Because they are full, waiting lists, the rents are soaring through the roof. What was once a cheap 2br is now close to, or exceeding 2k a month. That being said, these contractors are not getting $14 an hour. They are getting the same or better I was getting when I was in the IT trenches.
 
Its a capitalist society.

If Wal-Mart can staff its stores fully at $9 per hour, then that is the wage that the market bears. When they go to ritzy retirement communities such as Naples, FL, they cannot fully staff a store for $9 per hour. The area is mostly retirees, with a limited number of workers. As such, they must offer a minimum wage in the $12 to $13 range (approx) to staff a store in Naples. That is what the market bears. Supply and demand. More available workers = less wages. Less workers = higher wages.

Its pretty easy to be all mad at corporations, coming from the "poor down trodden worker", but these folks dont understand market conditions, market competition, taxes, EBIT, gross profit, net profit, and margins. For instance, the average grocery store in America has a 1% profit margin. A $15 minimum wage sounds excellent to the "worker", but a $15 min wage also blows the 1% profit margin completely out of the water. Basically, it kills profits. A business without profits, is not a business. Its a failed business, with thousands of workers fired and unemployed. How do we compensate for higher wages? Higher prices. And in the competitive corporate environment, if your local grocery store raises its prices 15-20% to compensate for increased wages, then you find two unintended consequences. First, a large portion of their customers will shop at a different store across town. And a large portion of their customers, will buy less product. People have fixed budgets, and they can only afford X amount of dollars per week. They will just get less product for their dollar and make due.

So sorry OP. Its a misinformed rant without any understanding of business economics. For millennia, poor folks have been jealous of others with more, and it continues to this day.

Is it better to have 1 million employees making $8 per hour, or 500,000 employees making $12 per hour and 500,000 let go and unemployed?
 
As a corporate buyer I find that I get the worst service from my largest suppliers; some of the largest corporations out there. They intentionally understaff their customer service departments and have their shipping departments so overloaded that frequent mistakes are the rule. They've been so beaten down that they simply don't care anymore. I myself have been given more work, year after year consistently, with pay raises not exceeding 1.5%. That was the largest increase I've seen in three years. I am told that "salary survey" data indicates I am already above the "prevailing rate" for my job in this region. And, this all comes after quarter after quarter of back-patting from the executives about record sales, record profits, record stock price, and record revenue growth. I fully understand why peoples' motivation level keeps declining.

Ultimately, yes, we all suffer as a result of corporate greed.
 
Originally Posted By: Mr Nice
Seattle minimum wage is showing to have a negative effect on low wage workers.

Companies are simply cutting hours.


I hope this doesn't turn the thread political, because that is not my intention, but this is exactly why the government intervening with this stuff never seems to work.

The same happened with Obamacare. The idea was to get more people healthcare, in theory, by requiring it for 40 hr per week workers. Well, corporations got around that by making those positions part time.

One of my friends works as a manager at a quick lube. He used to work 40-45 hour weeks but didn't have any benefits. He didn't make a ton of money, but it was livable with the wage he made. With the addition of Obamacare, the quick lube made all of their employees work under 40 hours to avoid this. Now they have more workers, but they all work 30 hours or so. Instead of being able to work hard at one job, my friend now has two part-time jobs with very different schedules in order to make the same income he had before.

The bottom line is corporations by their nature will always bend the rules to get what they want.

There was talk of $15/hr minimum wage in CT. That will mean that instead of having 2 people working the McDonald's drive-thru making $9-10/hr, you will have one overworked person making $15. It won't change anything.
 
Well I think its how CEOs are compensated. If they are compensated by stock price they will do things to up the stock price. If they have an extra $1B do they increase R&D or do stock buy-backs. Stock buy-backs will increase the stock price and the CEO gets more compensation. Increasing R&D may or may not help the stock price, if it does its likely to be in several years.

Thus why decreasing the corp tax rate to 20% will allow companies to do more stock buy-backs and not create more jobs, help the economy. It helps the owners of the stock, the rich people and maybe 401K owners.
 
Originally Posted By: Rand
What can happen:

Upper management have golden parachutes.

They grind good company into dust for short term profit usually 5-10years

after a few years they retire, move on with giant bonuses, etc.

Next company hires them thinking look what they did over there..

Meanwhile all the bad decisions catch up making the first company falter...

They blame the new executives that just continued what the previous set did.

So basically the executive racks up 10's of millions in pay and bonus.. and moves on.

Meanwhile thousands of people lose their good jobs.. yes its very broken.


110%.
 
Originally Posted By: jeepman3071
Originally Posted By: Mr Nice
Seattle minimum wage is showing to have a negative effect on low wage workers.

Companies are simply cutting hours.


I hope this doesn't turn the thread political, because that is not my intention, but this is exactly why the government intervening with this stuff never seems to work.

The same happened with Obamacare. The idea was to get more people healthcare, in theory, by requiring it for 40 hr per week workers. Well, corporations got around that by making those positions part time.

One of my friends works as a manager at a quick lube. He used to work 40-45 hour weeks but didn't have any benefits. He didn't make a ton of money, but it was livable with the wage he made. With the addition of Obamacare, the quick lube made all of their employees work under 40 hours to avoid this. Now they have more workers, but they all work 30 hours or so. Instead of being able to work hard at one job, my friend now has two part-time jobs with very different schedules in order to make the same income he had before.

The bottom line is corporations by their nature will always bend the rules to get what they want.

There was talk of $15/hr minimum wage in CT. That will mean that instead of having 2 people working the McDonald's drive-thru making $9-10/hr, you will have one overworked person making $15. It won't change anything.


In every legislation they manage to put some loopholes that in the end invalidates the original intent.
 
When 99.9% of the rest of the world can and will do your job for pennies on dollar how do our companies stay in business?
 
When the Chinese are paying a buck and a half an hour to factory workers it's tough to compete. The net result is layoffs and out sourcing. When a US company adopts better production technology to offset higher labor costs the Chinese steal it. A fellow named Wang ran a big computer firm in Massachusetts. his standing rule was NO Japanese with cameras allowed in his factory.
 
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