Duke wrote: Profits are up by what metric? Dollar volume, or percent of revenue, or ROI?....
Not an economics person, but the trend is cutting cost. So for the same sales rate this would be ROI, right? (same income, less invested)
It's pure, easy to quantify profit, that's why it's so hard to resist. Looks great on paper, but might be a bit of a "Cutting off the nose to spite the face" situation in the long run.
In reply to racerdave600:
I couldn't put it any better than that. +1 to you sir.
racerdave600 wrote: ....And to say companies are making record profits is simply not true. Maybe a few are, but as a whole, most are struggling for survival right now....
The stock market wishes to disagree with you here.
The question that people ask is: "If the economy is so bad, why is the stock market up?"
The answer, that I think is pretty well accepted, is that companies are "doing better" by cutting costs, not by doing more business.
racerdave600 wrote: I'm going to try and play nice here, but some of you guys crack me up. I've owned my own company, worked for many others, and used to interview hundreds of corporations. My father is a partner in 3 companies currently as well. First, you took the job, if it isn't what you want, go somewhere else. It makes zero difference how much a company banks or pays anyone else. You agreed to a salary when you took the job to begin with. Granted I think they need to be fair, but most people have no concept of the cost of doing business. Companies exist to make a profit, nothing else. I know that's harsh, but it's true. Sure people like Tim and family love what they do and bring joy to us in the process, but if they didn't make money, they wouldn't do it. To do so, they have to make decisions that affect their employees, and I'm sure they do so as well as possible, but along the way, someone isn't going to like it. It doesn't mean they are bad though. All corporations aren't bad. They are like people, and you can't change human nature as much as many like to think they can. So what you end up with are companies that are decent, and some that are not. By the same token, businesses get operating and investment money by floating it in the market. If they didn't have this, many would not exist to give anyone a job. And yes, the people that own the company have a HUGE investment compared to us that simply work at them, and that includes stockholders. I've made money and lost money on stocks, and you bank on a company's success. Rightly so they should get dividends, etc. as without them, you might be on the unemployment line. And to say companies are making record profits is simply not true. Maybe a few are, but as a whole, most are struggling for survival right now. This is such a gross overstatement. I know our industry is decimated, and many I talk to are facing similar situations. In fact, only a few industries that I'm associated with are doing well, and most are on govt. contracts in a few specific areas. In the end I think it boils down to this. Each person is responsible for themselves. I've never, ever thought a company controlled my future. If I've thought I was mistreated, I simply found a place that fit better. A company is going to look out for itself first, and while most I know value their employees and treat them well, they will do what they have to for survival. Sorry rant off....
A company wasn't formed just to give workers a job.
If you want to be a fat cat then you put your neck & all your worldly belongings on the line and see how you like it. As others have said, if you don't like it vote with your feet and good luck getting better.
Many times the employees make far more than does the company or the owners. You've got a safety net, but the owners do not. They are risking things, or else risked it all at some time and they deserve the lions share.
Now we've got Obamacare coming in to sweeten the cost pot for companies. The Wall Street Journal a little while back said employee costs will be rising about 20% which means you will have to take a 20% cut in pay, or not get raises or, as many companies are doing, they'll have to cut you back to part time or make you contract employees.
They have no choices. Fortunately implementation of OC has been pushed back again, but that doesn't mean it's going away. Employers still have to plan for that day. What do you as an employee have to worry about?
In reply to carguy123:
There is a difference between wanting to be a "fat cat" and wanting to make enough of a living to afford a middle class lifestyle. Have decent housing, eat good food, own reliable transportation, be able to raise a family, save for retirement, and hopefully have some extra for a few luxuries like vacations.
Beer Baron wrote: In reply to carguy123: There is a difference between wanting to be a "fat cat" and wanting to make enough of a living to afford a middle class lifestyle. Have decent housing, eat good food, own reliable transportation, be able to raise a family, save for retirement, and hopefully have some extra for a few luxuries like vacations.
So is that your "RIGHT"? So many posting seem to think it is.
Many or most of the business owners began just because they wanted the same things you do.
They put it all on the line and most fail - miserably!
It is well k own that the stock market is doing well because the Fed is endlessly printing money. Watch what happens to the stock market everytime the Fed hints at slowing the flood of money.
Racerdave you are a big sack of awesomeness
petegossett wrote: Employee-owned corporations are the solution. I work for one, and I'm amazed every day how "right" it is. *We* are the share holders - the employees - not outside investors with no interest in the business its self. I've worked for large multinational corporations, mom & pop owned businesses, and everything else in between. But this is the first employee-owned business I've worked for, and I never intend to work for anything else.
Do you mind my asking what co you work for? I am very interested in this.
Seems like many are confusing a single owner co with a public co that doesn't determine lower paid employees' salaries. Regardless, I think thasuppressing employee salaries to make another $100k is a dick move. The employee probably has as much proportional stake in the place as the owner, except without the $1m soft landing place. If you increased pay for lower paid folks, you would increase their ownership of company outcomes. Maybe better customer service? Maybe repair done right the first time instead of running it down the line as "good enough"? Maybe just that employee defending his company's rep in a bar? Huge dividends.
You might be surprised at the loyalty the military generates these days.
carguy123 wrote: So is that your "RIGHT"? So many posting seem to think it is.
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
If you believe that as well, I say a qualified "yes". You do not get a free ride, but if you contribute to society greater than you are a burden to it, it should be expected that you are able to share the benefits of the wealth generated by that society. That wealth is necessary for Life, Liberty, and the pursuit of Happiness.
This does not mean handouts. It does not mean communism. It means society exists to take care of the people in it. An economic system is necessary to serve the needs of those people. So far, capitalism seems to be the best economic system to determine what is most needed by society, and provide for those needs. That economic system exists to serve the people of society, not to be their master though.
If the system is failing to meet the needs of the people who contribute to it when there are enough starting resources, that means something is not right. That does not mean it is the fault or responsibility of any one person or group of people. It means we can, and should do better.
I like the comments that the Corporations have so much on the line, that they're are risking more than us working slobs.
What did we learn in the latest crash? CEO and Board members made "risky" decisions and sank many companies. What happened to them? Did they lose everything they had? Did they risk losing their house and job security?
Nope. They got their full payments AND bonuses while thousands of workers lost their jobs, life long workers lost their pensions and retirements, the middle class sank that much further down the food chain.
There is obviously a huge difference between people who leverage all they own to start a business and the CEOs and such that played with our money like it was a family night Monopoly game.
How much (income/security/benefits/lifestyle) is the CEO of Wally world risking while his employees get kept just shy of full time employment, not paying overtime, paying the bare minimum wages, not giving benefits?
I hear so much bitching on here about the leeches sucking up welfare/food stamps/"entitlements". Most of those people are working low paying jobs that require them to ask for handouts to supplement. You should be outraged at the employers that can't keep the wages rising at the same rate as inflation and cost of living. THEY are the reason YOUR tax money gets handed out.
Teh E36 M3 wrote: If you increased pay for lower paid folks, you would increase their ownership of company outcomes. Maybe better customer service? Maybe repair done right the first time instead of running it down the line as "good enough"? Maybe just that employee defending his company's rep in a bar? Huge dividends.
I think this is the heart of the original article that people are missing. That paying employees well when you have the capacity, is good business.
Look at Henry Ford. He wanted every worker to be able to afford one of the cars they worked to make, and then to have surplus resources in time and money to be able to take their families out and enjoy what they had made. That proved to be good for his business and made it stronger.
Cone- said better than I did. Thanks.
racerdave600 wrote: I'm going to try and play nice here, but some of you guys crack me up. I've owned my own company, worked for many others, and used to interview hundreds of corporations. My father is a partner in 3 companies currently as well. First, you took the job, if it isn't what you want, go somewhere else. It makes zero difference how much a company banks or pays anyone else. You agreed to a salary when you took the job to begin with. Granted I think they need to be fair, but most people have no concept of the cost of doing business. Companies exist to make a profit, nothing else. I know that's harsh, but it's true. Sure people like Tim and family love what they do and bring joy to us in the process, but if they didn't make money, they wouldn't do it. To do so, they have to make decisions that affect their employees, and I'm sure they do so as well as possible, but along the way, someone isn't going to like it. It doesn't mean they are bad though. All corporations aren't bad. They are like people, and you can't change human nature as much as many like to think they can. So what you end up with are companies that are decent, and some that are not. By the same token, businesses get operating and investment money by floating it in the market. If they didn't have this, many would not exist to give anyone a job. And yes, the people that own the company have a HUGE investment compared to us that simply work at them, and that includes stockholders. I've made money and lost money on stocks, and you bank on a company's success. Rightly so they should get dividends, etc. as without them, you might be on the unemployment line. And to say companies are making record profits is simply not true. Maybe a few are, but as a whole, most are struggling for survival right now. This is such a gross overstatement. I know our industry is decimated, and many I talk to are facing similar situations. In fact, only a few industries that I'm associated with are doing well, and most are on govt. contracts in a few specific areas. In the end I think it boils down to this. Each person is responsible for themselves. I've never, ever thought a company controlled my future. If I've thought I was mistreated, I simply found a place that fit better. A company is going to look out for itself first, and while most I know value their employees and treat them well, they will do what they have to for survival. Sorry rant off....
If McDonald's DOUBLED the pay of EVERY employee, including the highly compensated Board of Directors, etc, an item that cost $1, would then cost $1.17. You're right, untenable would be the circumstance.
CEO pay increasing, as relative to the lowest paid employees, by more than an order of magnitude..........over the last 35 years, how does "getting another job" solve that? There aren't jobs for everyone at Costco or State Farm (both companies well known for taking care of their employees).
I believe the article is also saying, that if those big corporations that focus on maximizing shareholder profits at the expense of the quality of life of their employees were to pay their employees better wages it would actually be of benefit to the middle class small business owners. They would be putting more money into circulation among consumers. If the guy who works at Walmart has enough money to do more than share an apartment with two other people, eat rice and beans, and ride the bus to work, he will spend that money going out to eat at your restaurant, having your shop fix his car, having your flooring business redo his carpets, or funding your artistic hobby by buying a print of your painting.
If the guys who have been wildly successful shared some more of that success with the workers who continue to make them rich. They would make it much easier for other people starting businesses to be successful too... and they would still be rich.
So Conejunky what are you doing to become one of the big boys with their unimaginable salaries?
When did you start working towards that direction?
Do you think the guys at the top just lucked into their positions?
No, they planned, worked and went to school to learn how to do that. Do you think you can run one of those big corporations and juggle all the balls?
It's not as easy as you think. You've got to be constantly on top of the market and changing with the times. Look at IBM & Xerox, once the biggest of the big. Where's Kodak?
First and foremost the company has to make a profit before the employees can make their money. And employee costs are only ONE of the many cost balls that has to be juggled.
Swank Force One wrote:PHeller wrote: Another thing I've noticed as a recent college grad is that many of my peers are working full-time jobs with benefits, which is great, but they are only getting $12-16/hr. That's just enough money to pay rent and utilities, and pay back student loan debt, but not much else. If your car leaves you sit you better hope you have a friendly co-worker who will pick you up or a family member who can. What I hate is that instead of our government incentivising companies to pay a larger number of employees a better wage, we'll tax the rich owners of the companies, and give handouts to those who don't work at all. I'm all for taxing the living crap out of people who get rich doing nothing, especially sports stars and thug-life rappers, but we need to find a better way of convince the rich to pay more people to do stuff. What if we tied personal income tax rates to unemployment rates? All the rich folks would get together and hires lots of maids/butlers ala Downton Abbey.This is one of those scenarios where one REALLY needs to step back and look at a degree as an investment, not a requirement. Jobs that pay that much and MORE are available without a degree. I still believe that kids are pressured to go to college and get a degree without anyone really stopping them and forcing them to think and do their research about what they're getting into. And what you just posted is the direct result.
This. Throughout high school I was told you must go to a four year college and get a degree if you want to be successful from both the teachers/educators and my older brother. I was dead set on joining the USMC my senior year and could care less. My older brother at the time who had a large influence on me because well he was a very successful brother convinced me to go to college. What did I get out of it? Some debt, a bad car accident, a horrible relationship with an ex, and a useless piece of paper.
I gained more knowledge and money learning a trade. I gained more knowledge that translated to more money joining the reserves and learning another skill set. If I would have enlisted at 18, I would have had 10 years experience in a field by now, better off financially, and not have 160 something wasted credit hours of time. Yes it looks good on a resume, yes it helps out a bit, but looking back I would have done it way differently. The only thing I can do is pass my experience down to my children and hope they make the right decisions for themselves.
Entry level wages are miserable for kids fresh out of college. I have multiple friends with great degrees working in their field of expertise struggling to get by because their employer wants a higher bottom line. Some are still living with their parents or grandparents because their student loan debt is so high they can't afford to live on their own.
It's also crazy to think some schools that receive federal assistance can still increase their tuition every year to astronomical rates. Then they include a $25 fee for each credit hour to pay for their athletics as if they don't make enough money off tickets, merchandise, and concessions.
z31maniac wrote: If McDonald's DOUBLED the pay of EVERY employee, including the highly compensated Board of Directors, etc, an item that cost $1, would then cost $1.17. You're right, untenable would be the circumstance. CEO pay increasing, as relative to the lowest paid employees, by more than an order of magnitude..........over the last 35 years, how does "getting another job" solve that? There aren't jobs for everyone at Costco or State Farm (both companies well known for taking care of their employees).
That premise was written by a student and has been debunked on any number of levels. For instance, are you aware that author of that claim didn't even bother consider the numbers from franchise stores?
This is what happens when an unqualified opinion is offered and then promoted as fact by people/organizations that have an agenda. It happens on both sides and there is no reason to think the OP's link is any different.
Does anyone really think the reasons for and solutions to economic problems are so easily summed-up in a few pages?
You are completely correct, I just saw the updated story. Although I'm curious in the % difference in labor between company owned and franchise stores.
Stolen from a communist factory worker:
They pretend to pay us,
So we pretend to work.
Everyone I told at Sam's Club laughed their asses off.
racerdave600 wrote: And to say companies are making record profits is simply not true. Maybe a few are, but as a whole, most are struggling for survival right now.
"Mr. Madison, what you've just said;... is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul..." Mr. Oblaski, Principal; Billy Madison
Well run companies are profiting like mad right now. Poorly run ones, are well poor.
We had a great thinning of the heard, the competitive market got that much more competitive. I am blessed in having an insight into energy, exports and durable goods production working where I do. There is no shortage of business. Most companiesthat made it through the recession are setting record profits, just not all industries.
GRM does not attract the loyal readership base that gives them money to absorb other failing publications because they hire the cheapest bloggers they can to make "Top 5" web lists. They find guys who write great editorials about "burrito blowouts" and pay them enough to keep them happily in parrots with enough left over to attend GWAR concerts.
That is how you run a good business. 
it's pretty simple math. If youdon't pay your employees a "fair wage", they don't buy stuff. If they don't buy stuff, businesses do not make money, if they do not make money, they can't afford to pay their employees a fair wage. It's a downward spiral that powers itself down the drain.
I see it all the time in Atlantic City. As I work at Multiple Casinos, I can see the differing corporate attitudes. Most of the casinos treat their employees as a liability. It shows in how clean they are, how the guests are treated, and how well they do each quarter. The only Casino that truely values their employees is the Borgata. They treat thier employees very well, pay them well, and expect their employees to do their very best. Guess what, there is a reason that the Borgata is -THE- Casino in Atlantic City. They are always at the top of the heap in Customer Satisfaction, Profits, and at the bottom for employee turnover.
And never think that a company does not have risk in treating their employees like crap. It costs a lot of money to train somebody to do a job and get them up to speed to where they do not slow down their other co-workers. To throw that way to squeeze a few more pennies of profit is shortsighted at best
mad_machine wrote: it's pretty simple math. If youdon't pay your employees a "fair wage", they don't buy stuff. If they don't buy stuff, businesses do not make money, if they do not make money, they can't afford to pay their employees a fair wage. It's a downward spiral that powers itself down the drain. I see it all the time in Atlantic City. As I work at Multiple Casinos, I can see the differing corporate attitudes. Most of the casinos treat their employees as a liability. It shows in how clean they are, how the guests are treated, and how well they do each quarter. The only Casino that truely values their employees is the Borgata. They treat thier employees very well, pay them well, and expect their employees to do their very best. Guess what, there is a reason that the Borgata is -THE- Casino in Atlantic City. They are always at the top of the heap in Customer Satisfaction, Profits, and at the bottom for employee turnover. And never think that a company does not have risk in treating their employees like crap. It costs a lot of money to train somebody to do a job and get them up to speed to where they do not slow down their other co-workers. To throw that way to squeeze a few more pennies of profit is shortsighted at best
This. In my business, the companies which try to squeeze their employees, micromanage them and don't allow them to do what's necessary have high turnover and poor CSI which results in poor sales. The ones which treat their employees fairly, empower them and pay them decently see the opposite result.
There's plenty of companies out there which won't let employees work full time thus saving on benefits expenditures, pay them minimum wage with the attitude that there's always another drone along in a moment (Wal Mart in particular gets raked over the coals about ths, even on this very board) and otherwise cut costs to the bone so their BoD can make huge bonuses.
So I guiess it's fair to say I agree with the article.
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