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  • disneysteve
    started a topic What are your thoughts on income inequality?

    What are your thoughts on income inequality?

    WARNING: This is NOT a political thread. Please do not make it one. Blatantly political posts will be deleted. If you want to discuss policies, that's fine, but not politics.

    I am by no means an economist but I hear and read so much about income inequality. Is it truly a problem? Does the CEO's pay really influence or affect the hourly worker's pay? Could companies get top quality leadership today without paying what they are currently paying? There have recently been stories in the news from companies such as Disney and Uber among others. Are shareholders and top executives exploiting their workforce?

    I honestly am not sure what to think about all of this. Part of me thinks it's ridiculous when some CEO is making tens of millions of dollars per year because what could they possibly be doing to justify that? But at the same time, if the company is booking record profits year after year, and those profits are in the billions, is that CEO pay really that unreasonable? As for the hourly employees, should they be making more or are they getting a fair price for what their job, training, and duties warrant? What about a company like Uber that actually has yet to generate a profit? Should things be different there than with a company like Disney that is wildly profitable?

    Should there be a scale of some sort that dictates the maximum multiple of average salary that the CEO can earn? Or would that just limit the talent pool and stifle innovation and growth?

    I suppose minimum wage plays into this too. If a company claims that it can't "afford" to pay a higher minimum wage at the same time that their executives are taking home 7-figure salaries, is there a problem there that needs fixing?

    I'm curious to hear your thoughts. And again, let's not make this political or partisan. Please keep it civil.

  • TexasHusker
    replied
    Originally posted by ~bs View Post

    True, but you have to draw the line somewhere. For most people, at the least they'll observe boosting income and cutting expenses to the extent legally possible. Many people have an even higher bar than that, and will observe what they feel is morally right/wrong. Otherwise all business owners would rip off customers, make workers work extra hours without pay, and use their businesses as drug fronts.
    I don't have the same level of confidence in humanity that you do.

    Leave a comment:


  • ~bs
    replied
    Originally posted by TexasHusker View Post

    Most humans are driven by greed. What can I save, what can I make. Where can I cut expenses, where can I boost income.

    Ethics are someone else's problem.
    True, but you have to draw the line somewhere. For most people, at the least they'll observe boosting income and cutting expenses to the extent legally possible. Many people have an even higher bar than that, and will observe what they feel is morally right/wrong. Otherwise all business owners would rip off customers, make workers work extra hours without pay, and use their businesses as drug fronts.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by TexasHusker View Post

    Most humans are driven by greed. What can I save, what can I make. Where can I cut expenses, where can I boost income.

    Ethics are someone else's problem.
    I don't entirely agree though I also don't think you're entirely wrong.

    One problem, at least from an investing standpoint, is that most of us don't buy individual stocks as our primary means of investing. We buy mutual funds and ETFs and largely index funds. So although I wouldn't go out and buy stock in Altria, for example, I'm quite sure it is a holding in one or more of my mutual funds. There's no way to buy the index and not get a piece of various companies that I may not otherwise want to be involved with.

    As for shopping, I'm definitely guilty there. We shop at Amazon all the time. They have everything so we don't waste a bunch of time driving to various stores searching for what we want. They almost always have the best price around. They deliver everything right to our door in 24-48 hours and sometimes even the same day. Not only do they have everything but we go on and get just what we want. There's no browsing or temptation or impulse purchases as there can be if we go into Target or Walmart. Local merchants simply can't compete, which is why so many of them have closed up and more are closing all the time.

    Leave a comment:


  • TexasHusker
    replied
    Originally posted by james.hendrickson View Post

    Wait a moment here, doesn't ethical behavior actually increase profits in the long run?
    Most humans are driven by greed. What can I save, what can I make. Where can I cut expenses, where can I boost income.

    Ethics are someone else's problem.

    Leave a comment:


  • Joan.of.the.Arch
    replied
    TexasHusker, I have to remind myself to shop local. My city really is just barely hanging in there and I know many people leave the city to do nearly all their shopping. Yesterday I was out in an ajoining county and knew I'd be passing a couple nurseries where I could buy a bale of straw that I really needed. I pulled into one, asked the price, whinced, and told myself that if they are asking $9.50 for one bale out here close to where it was cut, then, in the city they might be asking $10-$12. I reminded myself that I need to support my local businesses if I want to even have local businesses and all the good things that spins off.

    Got back into the city, went to the garden center that is within walking distance from home, and --surprise!-- they were only asking $5.50 a bale. So if it will stop frickin' raining, I can do my emergency straw mulching and then call the shop for a truckload delivery....Ultimately, maybe the city can address the sink hole developing two blocks away in the street the delivery truck will drive on to get to my place.

    Leave a comment:


  • corn18
    replied
    Wages are set by the market in most cases. When I first took over a division we had 221 employees. The company was high tech manufacturing. Our voluntary turnover rate was over 14% and that is very expensive. Time to hire was over 60 days. Nobody wanted to work there and then if we did get someone, nobody wanted to stay. So I asked HR to find out why. Started entry and exit interviews and surveys. Pay was part of it. We were already paying above min wage, but not keeping up with the other manufacturing companies in the area. So we raised average pay. We hired more and faster, but still had a high turnover rate. And high call in rates (calling in sick). Reason why? No training, no growth, no vision. Turns out, a lot of these workers wanted to be part of something more than just showing up to work.

    So we started all hands meeting with me, lunch and learns, skip level meetings and implemented standardized training and rating systems with a clear path for growth. This helped the most. Our turnover was low and our productivity went through the roof. We were doing the same production with 168 people that used to require 221 people. And quality went to 100%. On time delivery went from 23% to 100%. First pass yields went from 20% to over 80%. All of these improvements more than paid for the higher wages, but the real testament was the quality of life for the workers. They wanted to work there.

    And people started to advance up the ranks. Line workers were becoming supervisors. Supervisors were becoming managers. Managers were becoming directors and directors were becoming VP's. The beautiful thing was we were part of a megacorp that had a lot of opportunity for these folks, so there was no log jam at the top. I was always sad to see a great person go somewhere else, but a very proud poppa that they were moving up and out to do more great things.

    If you forced me to raise my minimum wage to $15, I would do it but I would also make it clear that will not solve anything. While we would start people at $12/hour, they could be at $14-$16 / hour in 3-6 months if they wanted to. If they didn't want to, they either left on their own or we made room for someone that did want to. But you had to earn it. Wasn't a very high bar, but just showing up and fogging a mirror was not going to get you a pay raise.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by james.hendrickson View Post

    Wait a moment here, doesn't ethical behavior actually increase profits in the long run?
    Who said anything about ethics? It isn't unethical to offer a lower wage if that gets you the staff you need to run your business. If it doesn't, then you need to offer more. Supply and demand.

    Leave a comment:


  • james.hendrickson
    replied
    Originally posted by TexasHusker View Post
    We are inching up our wages, as well as our prices. When stuff costs more, stuff then costs more.

    Companies aren't going to do anything out of a sense of responsibility. Shareholders don't care about responsibility. They want a dividend and growth. Responsibility is for someone else. Shareholders are the owners of these companies, not some boss man somewhere.

    Companies will pay more to retain and keep good people in order to protect their bottom line and their shareholders. If they are losing good people to other companies because of pay, they will either increase pay or accept a lower caliber worker.

    At my franchises, we pay well above the market. As a result, we tend not to have a lot of turnover, which means our customers are familiar with us, which means they stick with us, and they hopefully come back more often. It's a trickle-down effect. Meanwhile several competitors are trying to pay minimum or possibly a bit more to squeeze out more profit, they will tend to charge more than us for services, and they have absolute incompetents representing their brand. That is almost as good for us as us doing a good job delivering our brand! Who needs marketing when your competitors are a joke?
    Wait a moment here, doesn't ethical behavior actually increase profits in the long run?

    Leave a comment:


  • disneysteve
    replied
    Originally posted by bjl584 View Post

    To add to this; I've worked in retail on and of my entire working life. Some companies were good, some not so much. The truth is that some of these retailers are paying decent, but becoming a full time employee is often an uphill battle.

    $15 an hour is nice, but if you only get 25 hours a week and don't have benefits, not so much anymore.
    This is very true, as is the comment about higher pay often being accompanied by lower benefits. People like to look at one factor: the hourly wage. You really need to look at the total compensation package. At my job, I have great health insurance and dental insurance, life insurance for 2X my income, reimbursement of gym membership, 7 weeks of PTO, and several other benefits. All of that stuff is worth money. When I look at what I'm earning, I also need to add in the value of all of those things, not simply focus on the hourly rate.

    Many places will pay more but keep everyone below full time hours so they don't need to provide benefits. Would you rather make a couple dollars more per hour but only get 24 hours/week or would you prefer to make a bit less, get 40 hours consistently, and have health insurance?

    Leave a comment:


  • disneysteve
    replied
    Originally posted by TexasHusker View Post
    Amazon isn't collecting, nor remitting, local or state taxes.
    They didn't use to but they do now for the most part. Almost everything I've bought on Amazon in the past year or so has had sales tax charged. I'm not sure what determines it exactly but it used to be nothing was taxed. Now almost everything is.

    Leave a comment:


  • bjl584
    replied
    Originally posted by Smallsteps View Post


    It is VERY difficult to compare companies unless you were/ are in their system.

    I find JOBS are like insurance you often do not KNOW how good or bad it is until you USE/work it.

    Even in my new temp job a person applied and is driving a LONG way based on " I heard they pay X once you get on as regular employee" but they did not know they just shed or transferred to lower cost area about 400 regular jobs and are really relying on a temp system to do things and almost no one is being converted to regular employee.

    I worked at a bank they paid well per hour but had expensive/ almost no benefits. turned down a job at Costco for same reason.

    I also worked at a store that was so proud to tell customers and once a local news story " we pay over minimum wage".
    Often making some think they were generous and cared for employees when the truth was they started .10 cents over minimum. They did not lie..... just it was not the Big picture people assumed.
    I remember so many customers coming in saying they were so glad they were supporting a "good" company . If asked, I told them the truth and many felt differently.

    Some places do pay better without gutting benefits or other limitations and that is their choice.
    It is often their choice as well to be very picky in whom they hire and shed ASAP many that do not earn it.
    .
    Pay more - get more from employees often does not happen. So many people simply assume all those people are hard workers getting the shaft.
    That is often why it come to government trying to force things to get those employees that at $10 are overpaid.... for their PERSONAL effort.




    To add to this; I've worked in retail on and of my entire working life. Some companies were good, some not so much. The truth is that some of these retailers are paying decent, but becoming a full time employee is often an uphill battle.

    $15 an hour is nice, but if you only get 25 hours a week and don't have benefits, not so much anymore.

    Leave a comment:


  • TexasHusker
    replied
    Originally posted by amarowsky View Post

    ​​​​​​Yes most shareholders react only to returns. And consumers drive all the returns in retail companies. If consumers chose to support responsible companies that use good corporate citizenship, and ignore those that tend to underpay, it would reinforce the better team over the worse.

    People seem to be shameless for profit. I'm not discriminate in my investments as a shareholders. But as a consumer of goods, I do my best to support companies doing the right thing. And avoid companies that are underpaying or just straight up exploiting people.

    Sheeple are by nature selfish. It is an inborn trait to all. As for supporting companies "doing the right thing", that's great. You might also think about supporting companies that are paying for your local police and firefighters.

    Most sheeple don't have a clue that they are effectively killing their local tax base by purchasing everything off of Amazon to save a few dollars. Amazon is to local retailers what WalMart was to local retailers 30 years ago. Sears is almost done, as is Toys R Us, JC Penny, and a host of others.

    But your local government, schools, parks, recreation, police, and fire departments are funded either by property taxes or sales taxes, or a combination thereof. When these retailers go out of business, it is gutting your local tax sources, as Amazon isn't collecting, nor remitting, local or state taxes. And obviously when you have scores of employees being laid off, you have more houses for sale and apartments vacant, which translates into decreasing property tax receipts.

    Amazon has gotten so big here that each Christmas season, UPS is now renting a local parking lot to park large trucks in for packages, and they are literally shuttling packages throughout the neighborhood on golf carts for about 6 weeks each year. I first thought that was a nifty thing. Now I realize it is a massive threat to my municipality and local economy in general. So I try to do my part and buy local.
    Last edited by TexasHusker; 06-17-2019, 04:53 AM.

    Leave a comment:


  • Smallsteps
    replied
    Originally posted by amarowsky View Post
    I don't think these companies have been mentioned yet. But what about Costco for example...

    They are nothing extraordinary, just a well managed supermarket. Their employees aren't particularly over or under skilled. But the company can manage to pay labor workers on average like ~$20 ish an hour. Actually just saw an article today that they are bumping up starting pay to $14 an hour.

    The point to focus on, is Costco does this and is a successful company with a good reputation, quality, price, and profit.

    If I'm not mistaken, trader Joe's pays their employees really well. And they're just a grocery store

    I heard Chase and Bank of America are bumping their minimum wages to$20 an hour in a year or two. That's pretty wild considering how larger the companies are. It must hint to how ubsurd the profit must be from their operations.

    At least we know some of these companies can pay like people with like skills, more pay. If the company is responsible and managed well enough to pursue doing what is proper.
    ​​​​

    It is VERY difficult to compare companies unless you were/ are in their system.

    I find JOBS are like insurance you often do not KNOW how good or bad it is until you USE/work it.

    Even in my new temp job a person applied and is driving a LONG way based on " I heard they pay X once you get on as regular employee" but they did not know they just shed or transferred to lower cost area about 400 regular jobs and are really relying on a temp system to do things and almost no one is being converted to regular employee.

    I worked at a bank they paid well per hour but had expensive/ almost no benefits. turned down a job at Costco for same reason.

    I also worked at a store that was so proud to tell customers and once a local news story " we pay over minimum wage".
    Often making some think they were generous and cared for employees when the truth was they started .10 cents over minimum. They did not lie..... just it was not the Big picture people assumed.
    I remember so many customers coming in saying they were so glad they were supporting a "good" company . If asked, I told them the truth and many felt differently.

    Some places do pay better without gutting benefits or other limitations and that is their choice.
    It is often their choice as well to be very picky in whom they hire and shed ASAP many that do not earn it.
    .
    Pay more - get more from employees often does not happen. So many people simply assume all those people are hard workers getting the shaft.
    That is often why it come to government trying to force things to get those employees that at $10 are overpaid.... for their PERSONAL effort.





    Leave a comment:


  • amarowsky
    replied
    Originally posted by TexasHusker View Post

    Companies aren't going to do anything out of a sense of responsibility. Shareholders don't care about responsibility. They want a dividend and growth. Responsibility is for someone else. Shareholders are the owners of these companies, not some boss man somewhere.
    ​​​​​​Yes most shareholders react only to returns. And consumers drive all the returns in retail companies. If consumers chose to support responsible companies that use good corporate citizenship, and ignore those that tend to underpay, it would reinforce the better team over the worse.

    People seem to be shameless for profit. I'm not discriminate in my investments as a shareholders. But as a consumer of goods, I do my best to support companies doing the right thing. And avoid companies that are underpaying or just straight up exploiting people.


    Leave a comment:

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