A living profit

[coloradoatheist]

The usual result of salary caps is companies find other ways to compensate the people they want.

For example, that's how we ended up with health insurance coming from one's employer.

So they all get healthcare too. What does that have to do with capping a bigshot's salary? You didn't address the fact that these employees didn't flee this awful imposition on their genius. It is possible they know a good thing when they see it and it is not always greed that motivates people...as you seem to think.

However it had the unintended consequence of tying health care to employment over time, one we are trying to untangle. Actually the US tried to limit executive pay by capping cash compensation for the CEOs, so stock options became the new norm and pay increased even higher. it's one of those they keep trying to fix the loopholes after it happens.

 

[Underseer]

So they all get healthcare too. What does that have to do with capping a bigshot's salary? You didn't address the fact that these employees didn't flee this awful imposition on their genius. It is possible they know a good thing when they see it and it is not always greed that motivates people...as you seem to think.

However it had the unintended consequence of tying health care to employment over time, one we are trying to untangle. Actually the US tried to limit executive pay by capping cash compensation for the CEOs, so stock options became the new norm and pay increased even higher. it's one of those they keep trying to fix the loopholes after it happens.

There is less competition in the health insurance business, because a long time ago, health insurers were excluded from anti-trust laws.

With less competition, health insurers have a motive to be as inefficient as possible in order to increase shareholder profits and CEO income. Since our government is unable or unwilling to enforce anti-trust laws, then we can't really count on competition alone to make the system more efficient.

 

[coloradoatheist]

However it had the unintended consequence of tying health care to employment over time, one we are trying to untangle. Actually the US tried to limit executive pay by capping cash compensation for the CEOs, so stock options became the new norm and pay increased even higher. it's one of those they keep trying to fix the loopholes after it happens.

There is less competition in the health insurance business, because a long time ago, health insurers were excluded from anti-trust laws.

With less competition, health insurers have a motive to be as inefficient as possible in order to increase shareholder profits and CEO income. Since our government is unable or unwilling to enforce anti-trust laws, then we can't really count on competition alone to make the system more efficient.

I don't disagree with you there, there is a lot of problems with how the system has grown up since it first started being tied to employment instead of just a free market purchase.

 

[Jimmy Higgins]

There is less competition in the health insurance business, because a long time ago, health insurers were excluded from anti-trust laws.

With less competition, health insurers have a motive to be as inefficient as possible in order to increase shareholder profits and CEO income. Since our government is unable or unwilling to enforce anti-trust laws, then we can't really count on competition alone to make the system more efficient.

I don't disagree with you there, there is a lot of problems with how the system has grown up since it first started being tied to employment instead of just a free market purchase.

Heh... free market solve all problems. In Soviet Russia the you free the market.

 

[prideandfall]

You're still missing the basic problem: Your approach causes lots of unemployment.

i'm not missing it, i'm simply disagreeing with your assessment that higher wages automatically means higher unemployment.
i do get what you're saying in the sense that you posit businesses would just hire fewer people, and i'm sure that in the short term that would be an issue because corporate greed is alter upon which all things are sacrificed, but ultimately i don't think that the trend of actively screwing over employees would be any different than it is now.

plus, if more jobs provided a sustainable income, there's a chance that more people would be willing to diversify in terms of what kind of work they'll do, which could have a positive effect on unemployment.

 

[Loren Pechtel]

The usual result of salary caps is companies find other ways to compensate the people they want.

For example, that's how we ended up with health insurance coming from one's employer.

So they all get healthcare too. What does that have to do with capping a bigshot's salary? You didn't address the fact that these employees didn't flee this awful imposition on their genius. It is possible they know a good thing when they see it and it is not always greed that motivates people...as you seem to think.

The point is that it was a way of circumventing the salary cap and it led to the job lock in problem we used to have from pre-existing condition limitations.

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You're still missing the basic problem: Your approach causes lots of unemployment.

i'm not missing it, i'm simply disagreeing with your assessment that higher wages automatically means higher unemployment.
i do get what you're saying in the sense that you posit businesses would just hire fewer people, and i'm sure that in the short term that would be an issue because corporate greed is alter upon which all things are sacrificed, but ultimately i don't think that the trend of actively screwing over employees would be any different than it is now.

plus, if more jobs provided a sustainable income, there's a chance that more people would be willing to diversify in terms of what kind of work they'll do, which could have a positive effect on unemployment.

Why do you think things would be any better in the long run?

If workers were worth those higher wages the price of labor would already have been bid up to those levels.

 

[DBT]

Regardless of running costs, as long as a company is making a reasonable profit, it will stay in business. If the company has trouble attracting staff, it offers higher pay and better conditions to attract applicants. No matter how much profit a company makes, if it has a large pool of unemployed to draw from, it has the upper hand and will only pay what it needs to, that is, the basic going rate for that industry. Decision making based on a cost to benefit ratio in relation to self interest (the company profits in this instance). This is just human nature at work in terms of business.

 

[untermensche]

Regardless of running costs, as long as a company is making a reasonable profit, it will stay in business. If the company has trouble attracting staff, it offers higher pay and better conditions to attract applicants. No matter how much profit a company makes, if it has a large pool of unemployed to draw from, it has the upper hand and will only pay what it needs to, that is, the basic going rate for that industry. Decision making based on a cost to benefit ratio in relation to self interest (the company profits in this instance). This is just human nature at work in terms of business.

It is the nature of SOME humans. Some humans are extremely greedy.

But there are also some humans wouldn't think of paying people as little as possible, which is what a market rate means. Honest people wouldn't.

Honest people would pay people in relation to the wealth their labor created.

The system is set up so these people rarely reach positions of power.

 

[Jason Harvestdancer]

Look, it should be a simple question, but those who are on the side of arguing that current corporate profits are excessive won't answer it.

How much profit is excessive?

 

[coloradoatheist]

Regardless of running costs, as long as a company is making a reasonable profit, it will stay in business. If the company has trouble attracting staff, it offers higher pay and better conditions to attract applicants. No matter how much profit a company makes, if it has a large pool of unemployed to draw from, it has the upper hand and will only pay what it needs to, that is, the basic going rate for that industry. Decision making based on a cost to benefit ratio in relation to self interest (the company profits in this instance). This is just human nature at work in terms of business.

It is the nature of SOME humans. Some humans are extremely greedy.

But there are also some humans wouldn't think of paying people as little as possible, which is what a market rate means. Honest people wouldn't.

Honest people would pay people in relation to the wealth their labor created.

The system is set up so these people rarely reach positions of power.

If it were only that simple. If companies only paid as little as possible, why isn't everyone making minimum wage? Or why aren't women always hired before men? And if that was the case then it would be much easier for us to recover from a recession, wages would be cut a percentage and prices could be reduced and then we move on it. But in fact we get sticky wages instead. Companies are like humans, some are better than others at controlling wages and costs.

 

[Jimmy Higgins]

Look, it should be a simple question, but those who are on the side of arguing that current corporate profits are excessive won't answer it.

How much profit is excessive?

I'd prefer to look at a more relevant question, how much profit margin is sustainable? Of course, that varies by industry.

 

[Jason Harvestdancer]

I think my question is quite relevant. People are essentially saying the companies are making too much profit, so how much is too much?

Is "too much" more than "sustainable"?

 

[prideandfall]

Why do you think things would be any better in the long run?

because people having money is better than companies have money, universally and unquestionably.

If workers were worth those higher wages the price of labor would already have been bid up to those levels.

the term "worth" here is the central issue - you think the worth is determined by some magical and infallible Deux Ex Markina that perfectly and fairly ascribes monetary value to every employment position in existence, which is so hilariously retarded of a concept that it defies description.
i happen to think that the criteria by which "the market" assigns worth is completely insane - the stocking clerk at Walmart who points me to the isle where i can find superglue has almost infinitely more value to me and impact on my experience with the store than every single upper level CEO in the company combined, so their work is of nearly infinitely more worth than all the executives put together, and so i find the idea that them getting less than a livable amount of money for their 40 hours a week is absurd and unacceptable.

"the market" is wrong when it comes to wages, and anyone who supports the current system of wage determination is wrong.

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I think my question is quite relevant. People are essentially saying the companies are making too much profit, so how much is too much?

Is "too much" more than "sustainable"?

who said companies are making "too much" profit?
i think you'll find that what's *actually* being said is that the amount of profit being made is sufficient to utterly invalidate any claim that paying people livable wages is an untenable burden.

 

[dismal]

Good news! ksen-style economic awesomeness is on its way...to Argentina.

One of South America's largest countries has passed new measures to cap consumer prices of goods, set profit margins for private businesses and levy fines on companies found to be making "artificial or unjustified" profits.

If that sounds like something they would do in Venezuela, well, that's because they already have.

Now it's Argentina that wants to use the heavy hand of the state to grip the invisible hand of the market.

After an all-night debate, legislators in Argentina's lower house voted 130-105 early Thursday for a new "supply law" pushed by President Cristina Fernandez de Kirchner, who is battling inflation, product shortages and a debt crisis her government blames on "vulture" bondholders.

http://www.washingtonpost.com/blogs...tina-joins-the-venezuela-school-of-economics/

Best we enjoy the existence of these economic practices while we can because once things go to shit we will inevitably be told they were never *really* tried.

 

[Jimmy Higgins]

Good news! ksen-style economic awesomeness is on its way...to Argentina.

One of South America's largest countries has passed new measures to cap consumer prices of goods, set profit margins for private businesses and levy fines on companies found to be making "artificial or unjustified" profits.

If that sounds like something they would do in Venezuela, well, that's because they already have.

Now it's Argentina that wants to use the heavy hand of the state to grip the invisible hand of the market.

After an all-night debate, legislators in Argentina's lower house voted 130-105 early Thursday for a new "supply law" pushed by President Cristina Fernandez de Kirchner, who is battling inflation, product shortages and a debt crisis her government blames on "vulture" bondholders.

http://www.washingtonpost.com/blogs...tina-joins-the-venezuela-school-of-economics/

Best we enjoy the existence of these economic practices while we can because once things go to shit we will inevitably be told they were never *really* tried.

What I find interesting is that this is how the Federal, State, and Local Governments handle public engineering contracts. They set the acceptable overhead rate and a profit rate. Somehow, despite the dire warnings from the dismals, plenty of engineering companies out there making money.

 

[dismal]

Good news! ksen-style economic awesomeness is on its way...to Argentina.



http://www.washingtonpost.com/blogs...tina-joins-the-venezuela-school-of-economics/

Best we enjoy the existence of these economic practices while we can because once things go to shit we will inevitably be told they were never *really* tried.

What I find interesting is that this is how the Federal, State, and Local Governments handle public engineering contracts. They set the acceptable overhead rate and a profit rate. Somehow, despite the dire warnings from the dismals, plenty of engineering companies out there making money.

I assume you're not too dense to understand the difference between letting out a contract and regulating an entire economy so I won't respond to the specific point.

But should we take this as you going on record with your support for what Argentina is doing here and your optimism that their economy will thrive with such enlightened practices?

 

[Jimmy Higgins]

What I find interesting is that this is how the Federal, State, and Local Governments handle public engineering contracts. They set the acceptable overhead rate and a profit rate. Somehow, despite the dire warnings from the dismals, plenty of engineering companies out there making money.

I assume you're not too dense to understand the difference between letting out a contract and regulating an entire economy so I won't respond to the specific point.

Odd, because you seemed to imply that a practice of limiting profits was reckless. Are you ignoring that now because it doesn't necessarily fit with your narrative. You seem to like taking ideas held to an extreme and using that as a median point.

 

[dismal]

I assume you're not too dense to understand the difference between letting out a contract and regulating an entire economy so I won't respond to the specific point.

Odd, because you seemed to imply that a practice of limiting profits was reckless. Are you ignoring that now because it doesn't necessarily fit with your narrative. You seem to like taking ideas held to an extreme and using that as a median point.

Are you dancing about to avoid answering?

I can ask again: Do you support the actions Argentina is taking and are you confident that these economic practices will lead to prosperity and general awesomeness?

This is not a hypothetical question. They just passed a profit cap law.

 

[Canard DuJour]

Look, it should be a simple question, but those who are on the side of arguing that current corporate profits are excessive won't answer it.

How much profit is excessive?

Because "how much profit is excessive? isn't a simple question but a facile one. Profits are considered excessive because of the distribution and conditions precipitating it. Not any absolute quantity of ...what? The question makes no sense.

 

[Jason Harvestdancer]

Ok, at least you answered.

So, elaborate? Can you tell me what conditions of distribution can make a profit excessive?