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[unnamed525.livejournal.com]

Comments

[badlydrawnjeff.livejournal.com]

I really need to start keeping track of who posts the most fabricated quotes in this community.

[404.livejournal.com]

unnamed525

[lafinjack.livejournal.com]

With friends like these...

[cindyanne1.livejournal.com]

I'm of two minds about businesses sharing profits with their employees.

Sure, everybody wants their hand in it when times are good, but what about sharing that risk, as well? If you're in it for the good, you have to be in it for the bad.

We had this same kind of conversation with a guy we rent a 70 acre field from to farm. We pay him $150/acre and he wanted more since he "heard that corn was $5/bushel so he knew we were making a lot of money." (Of course we had sold all of our corn back then at $3.90 because we don't have a crystal ball, but whatever.)

Anyway, we said sure... if he wanted to profit share and farm on the halves, that's fine! Great! But he wasn't only going to be sharing the profits. He was also going to be sharing the losses, which meant he might get LESS money per acre just as often as he would get more. We showed him the numbers... the actual numbers, not just what he'd "heard," of what his ground produced over the years and what we'd sold it for (again, no crystal ball here) and the actual cost of inputs, etc. If he wanted to share, he was going to have to share everything.

He thought about that for a while, then decided his guaranteed $150/acre was just fine.

It's true; we did make money off his land. But we also have all the risk on our shoulders. That's why when we do have a good year, we shouldn't feel as though we should give that money to other people.

[cindyanne1.livejournal.com]

Although, of course, we're operating on a very small scale. That's where the second mind of my two minds comes in. There does come a point when there isn't as much risk anymore. And not all businesses are as at the mercy of the weather and nature as ours is as well... so there's that.

I still don't like seeing all business owners painted with the same brush, you know what I mean?

[oslo.livejournal.com]

Sure, everybody wants their hand in it when times are good, but what about sharing that risk, as well? If you're in it for the good, you have to be in it for the bad.

There are more options than just non-participation in upside and full exposure to upside and downside risk. You and your lessor, for instance, could have agreed to an arrangement where he took a smaller share in profits but had a floor on the minimum rent you paid, which would be lower than the flat rate you're paying now. That fact that you countered with a no-exposure or total-exposure choice, thereby playing off your lessor's aversion to risk, suggests to me that you were driving a hard bargain to preserve a vastly preferential arrangement (for you) than any profit-sharing arrangement might be able to save you, in terms of overhead. I'll bet that you did your best to emphasize how much of a struggle it is for you, too.

Which isn't to criticize. I'm a professional negotiator, myself. Seriously - kudos.

But my point is more that we needn't expect employees to either take the wage that's offered them or to somehow become fully vested in the equity structure of the company. There are various ways that a company can and sometimes should reward employees when times are good, without expecting them to put their entire compensation at risk. Hundreds of thousands of employees work for compensation structured as a salary+bonus, for instance. Even some of the wage-hour jobs I've had included an informal bonus structure.

Employee participation in profits is not always the best idea, and it might not work for all kinds of employees. The question, to my mind, is really more about respect. Employees are not, in the end, simple commodities to be exploited whenever business needs require, much as people like Jeff want us to think that's actually the natural order of things. Employees are, instead, human beings engaged in a common purpose with their employers to conduct a productive business enterprise. CEOs who lose sight of this and instead just see "wages and compensation" as the biggest item on their balance sheet have lost sight not just of the human enterprise they oversee but the reality that enables the success of their business.

[cindyanne1.livejournal.com]

I agree. Land rent is one thing; human labor is another. I definitely see both sides of the coin.

[cinnamontoast.livejournal.com]

The question, to my mind, is really more about respect.

John Schnatter doesn't seem to be the sort of person who respects anyone but people who get face time with him. Everyone else is a number. I could be totally wrong, but I don't think so.

[lafinjack.livejournal.com]

If you're in it for the good, you have to be in it for the bad.

http://azizonomics.com/2012/07/19/explaining-wage-stagnation/
http://jobsearch.about.com/od/salaryinformatio1/g/pay-cut.htm
https://en.wikipedia.org/wiki/Layoff
https://en.wikipedia.org/wiki/Termination_of_employment

[cindyanne1.livejournal.com]

Yes, I realize my example (land rent) isn't quite the same as human employees and wages. It doesn't work the same across the board.

Still though, it bothers me to be a business owner and then read about how evil business owners are... even though I know our business (family farming) and their businesses are apples and oranges in a lot of ways. I have to keep that in mind. We don't have any employees, only us. We're not that large. The land owner in question? He'll get a raise on his rent this year just as we raise everyone's every year at contract time. We're not out to stiff anyone; we pay the going market rate for the land in our area.

But again... I realize land rent is a bad example and wages for human labor are another thing entirely.

[anfalicious.livejournal.com]

There's a difference between "business owner" and "employer" for a start. You don't employ people, but imagine if you did. Your profits be affected if you were unable to employ people? If you start to realise that your profits are based on your ability to expand your business due to being able to employ people you start to see how your increased profits aren't all your own doing. Employees do share in the risks; they risk unemployment if the business makes a loss, that's just as bad as a business making a loss. Sure you might lose your farm, but after bankruptcy you'll at least be left with nothing (ie no assets but no debts) so you'll be right back where the worker is when they lose their job (except with likely an increased social and cultural capital earned from being a business owner that should make it easier for you to find work). The risks may not seem so large, but neither are the profits.

Having said all of that, you're not an employer, you're self employed, and I think one of the greatest lies the neo-libs have been able to spread over the last 20 years is that the self-employed person has more in common with a fortune 500 CEO than they do with a factory worker (don't be fooled that class warfare is purely a tactic of the left). You're probably better off thinking more along the lines of what would happen to you if your inputs went up, whilst the farm gate price of your produce stayed the same, but the market price went up, which is what's happened to working people. Cost of living has increased, wages have stagnated or gone backwards, but upper management and the stock market are booming.

[cindyanne1.livejournal.com]

All very good points! Thank you for making that distinction between business owner and employer; that makes sense to me.

It does seem true that republican propaganda has us (meaning small business owners) feeling as though we're lumped in with the Wal-Marts and the McDonalds' of the world. They lead us to believe what's good for them is also good for us, and it's not always the case because the businesses are run so differently.

[anfalicious.livejournal.com]

It's one of the ways the 1% turn the rest of us against each other.

[madam-shapo.livejournal.com]

Not obligated only means that somebody doesn't have to do it, but still he might do it.

[peristaltor.livejournal.com]

He might. He might at that. And he might not.

[mylaptopisevil.livejournal.com]

But just to be clear, he won't.

[farchivist.livejournal.com]

Not obligated only means that somebody doesn't have to do it, but still he might do it.

It would be irrational and illogical to do so, therefore it will not be done. Sharing profits with the wageslaves is not in the best interests of the owners and shareholders.

[madam-shapo.livejournal.com]

Not necessarily, a lot of companies do that to keep their best employees. However, of course they won't do it, if any minute they can easily replace them with other people with no adverse effect on business.

[farchivist.livejournal.com]

However, of course they won't do it, if any minute they can easily replace them with other people with no adverse effect on business.

All employees are disposable. the only people in a business who cannot be replaced with no adverse effect are the Job Creators, the bosses. Everyone else is a wageslave robot.

[madam-shapo.livejournal.com]

Of course, but some are more disposable then others. It is a fact that some companies have profit sharing or stock options. It isn't because they are nice or more sharing. They do that because it's good for business. When millions of illegals ready to take any low paying jobs, you are not going to have profit sharing for burger flippers. So you should blame Dems to actively legalizing foreigners, that shouldn't even be here.

[farchivist.livejournal.com]

Of course, but some are more disposable then others.

No, I disagree with that.

It isn't because they are nice or more sharing. They do that because it's good for business.

No, they do that out of misguided charity and socialist idiocy. It's not good capitalistic practice.

When millions of illegals ready to take any low paying jobs, you are not going to have profit sharing for burger flippers. So you should blame Dems to actively legalizing foreigners, that shouldn't even be here.

No, the foreigners SHOULD be here. Native-born Americans won't work for what they're worth. That's why we have to outsource to China and bring in illegals to work. If Americans would accept $2.25/hour wages, then they would be properly employed.

[madam-shapo.livejournal.com]

I disagree with you disagreeing with me.
It is a very good capitalistic practice-encourages people work harder and they can abuse the employees more.
If government stops paying them for sitting on their behinds, then they will. Nobody likes starving.