Cost of living crisis.

[The Year Of The Fox]

4 minutes ago, Sideshow Faes said:

I was thinking this. As if giving his staff a 5% rise would lead to somebody closing down their entire business. Would need Donald Trump levels of ineptitude as a businessman for that to be true.

 

If you plumbing bill goes from £500 to £515 to account for it (as wages aren't the only thing included in pricing a 5% pay rise does not equal a 5% cost rise) you aren't going to be that bothered.

Assuming the increase in diesel costs/energy costs on the office have already been passed on (cost of materials most definitely will have been passed on) then of course the 5% would be for wages only. 

[Guest Sideshow Faes]

Just now, The Year Of The Fox said:

Assuming the increase in diesel costs/energy costs on the office have already been passed on (cost of materials most definitely will have been passed on) then of course the 5% would be for wages only. 

I think I'll probably bow out of this conversation here as we aren't likely to agree 

 

I'll just explain this point.

 

Obviously the total cost of a job is made up of multiple elements: wages, materials, logistics, taxes, other business costs etc.

Ignoring other cost rises as if they've already happened, as you say, let's say after that the cost would be £500. 

 

If the wage element increases 5% it is still only that one element of the overall cost that increases 5%, not the whole cost. So it doesn't require a 5% increase per job to fund a 5% pay rise. Even if wages are the biggest cost it will still be significantly less than 5% of the total price. 

[Bryn]

28 minutes ago, Zear0 said:

I'd argue that the difference this time being huge swathes of companies making record profits out of these hard times.  It's not at all like the financial crisis where everyone was hard up, this is hardship caused, predominantly, by profiteering.  Workers just want a piece of the pie.

 

Not to make my way onto Oz's hit list, but I'm a business owner and have literally never had it so good.  We've had massively increased turnover due to global markets changing and I've not had to lift a finger. I wish my staff would just "crack on" and not expect wage increases to reflect our improved profits, but sadly (joking aside I'm please they're not herds of sheep) they've got backbones and realise that wages and labour are a two way relationship.

I’m not sure small businesses with a handful of employees are responsible for egregious corporate profit.

 

I won’t pretend I know how to legislate to protect small businesses but I would expect any credible government to prioritise this as well as maintaining a healthy public sector, and I would also anticipate that a society with higher levels of spendable income would favour small businesses.

Edited 15 August 2023 by Bryn

[Zear0]

2 minutes ago, Bryn said:

I’m not sure small businesses with a handful of employees are responsible for egregious corporate profit.

 

I won’t pretend I know how to legislate to protect small businesses but I would expect any credible government to prioritise this as well as maintaining a healthy public sector, and I would also anticipate that a society with higher levels of spendable income would favour small businesses.

Not saying they are at all and I also agree that the best thing for the economy is people having more money to spend at Kate's Cake shop etc. rather than sending it all to Jeff and co. in Bermuda.  Also have no solution outside of targetted taxation on excessive profits and tax relief for organisations below a certain size.

[ozleicester]

A business first responsibility SHOULD be to ensuring its employees are appropriately paid for their service. Then its responsibility is to pay its taxes...finally it should be to its shareholders (who lets be honest have done NOTHING to earn any money from this business, just a bunch or neer do wells with cash).

Prior to the 70s, this was the model.

[Lionator]

1 hour ago, The Year Of The Fox said:

Conversely I think these people should stop thinking the world owes them a living and knuckle down to work. 

Junior doctors aren’t paid enough, it’s that simple. And there’s lots of opportunity to raise public sector funds from people who hoard assets and wealth. Ideologically it helps nobody if the tories refuse to negotiate. Their best chance of winning the next election is to negotiate, not villainies nhs workers. 

[Tommy G]

1 hour ago, ozleicester said:

A business first responsibility SHOULD be to ensuring its employees are appropriately paid for their service. Then its responsibility is to pay its taxes...finally it should be to its shareholders (who lets be honest have done NOTHING to earn any money from this business, just a bunch or neer do wells with cash).

Prior to the 70s, this was the model.

Are you on the wind up - when you refer to businesses' do you mean SME, PLC's, partnerships or are you just lumping everyone into the same pot. 

 

Shareholders never do anything to earn any money from a business - please educate yourself. Some shareholders have invested their life savings, borrowed money from family or worse to start their own business to then employ others to make a lifestyle. It's so blinkered to even make a statrement like that. Your whole existence on here is just to profit bash businesses, whilst you make have some half decent arguments your view is so one sided, I can only assume you've been burnt in the corporate world or have some kind of envy issue.

[Lako42]

1 hour ago, ozleicester said:

A business first responsibility SHOULD be to ensuring its employees are appropriately paid for their service. Then its responsibility is to pay its taxes...finally it should be to its shareholders (who lets be honest have done NOTHING to earn any money from this business, just a bunch or neer do wells with cash).

Prior to the 70s, this was the model.

Shareholders are the reason some businesses exist in the 1st place. 

 

Businesses that employ people 

[Górnik Leicester]

22 hours ago, Sideshow Faes said:

The idea it has to be capitalism or socialism/communism is a false dichotomy.

 

People often say that socialism has failed everywhere it's been tried. On the other hand there are arguments to be made about the extent of American foreign policy in making that the case. Either way, I don't think it's relevant. 

 

Ignoring the alternative systems used before, it's pretty clear that capitalism as practiced in the US and UK has failed the people badly. Though it hasn't actually failed in terms of what it is set up to do.

 

The UK and US have a different corporate governance regime that elsewhere on the planet. It is much more geared towards shareholders first. Businesses literally exist to increase value to shareholders. In Europe there are other aspects to corporate governance that have seen less corporate excess.

 

Over decades we've seen that in practice this means cutting enjoyment costs by letting wages fall a fast as possible. Cutting production costs by using cheaper materials and pushing for reductions in consumer, environmental and other protections and what they like to call 'red tape'. Increasing shareholder dividends, even when companies aren't putting money into pension schemes as they should be. Then there are issues like fire and rehire, benefit system supporting low wage employers etc that also hurt ordinary people.

 

The end result is that over decades the % of GDP that goes to workers has fallen significantly, while the amount going to capital has risen significantly. So as GDP has risen, virtually all of the benefit has gone to capital. 

 

This is what capitalism was designed for. The clue is in the title. It's there to build capital - to concentrate the money and assets held across the economy, not to spread them out.

 

You may not like socialism but capitalism has also failed. We need a new approach that supports ordinary people - surely that's why we have an economy - and doesn't wreck the ecosystem for the benefit of a relative handful of ultra rich.

 

I see that virtually everybody - from the right to the left - agrees on most of the same problems. It's just the solutions that aren't agreed upon. For the most part it's because they've been hoodwinked into believing there's no alternative, when really the discussion needed is what the alternative should be. 

 

It feels as though much of it is down to branding. As soon as you put the "ism" on the end of "social", it seems to become a very dirty word.

 

I have a strong feeling that if another model was offered up, somewhere in the middle of socialism and capitalism, and was branded as "social capitalism", most of the general public would lap it up.

 

If it was called "capital socialism", however... 

[ozleicester]

1 hour ago, Tommy G said:

Are you on the wind up - when you refer to businesses' do you mean SME, PLC's, partnerships or are you just lumping everyone into the same pot. 

 

Shareholders never do anything to earn any money from a business - please educate yourself. Some shareholders have invested their life savings, borrowed money from family or worse to start their own business to then employ others to make a lifestyle. It's so blinkered to even make a statrement like that. Your whole existence on here is just to profit bash businesses, whilst you make have some half decent arguments your view is so one sided, I can only assume you've been burnt in the corporate world or have some kind of envy issue.

ALL businesses should, in the first instance, ensure the people working in it are appropriately remunerated, it is that simple.

You are right, a tiny minority of shareholders have taken risks and they are entitled to profits as long, as they are paying their workers properly, if they cant do that and make a profit, they dont have a viable business.

You know what they say about assumptions... No...Ive not been burnt, and ffs give up the "envy" bullshit. I dont have millions or a McMansion, but im happy with what i have.....Also I can just look at a society in which people are homeless and forced to survive on charity, even when "employed", while scumbags "earn" millions per year. 

No one can justify being paid... 300, 400, 500 times as much as the lowest paid worker in their business, and the fact that so many sheep defend this absurd societal structure because they are too selfish, greedy or stupid to see an alternative is just very sad.

 

[Tommy G]

7 minutes ago, ozleicester said:

ALL businesses should, in the first instance, ensure the people working in it are appropriately remunerated, it is that simple.

You are right, a tiny minority of shareholders have taken risks and they are entitled to profits as long, as they are paying their workers properly, if they cant do that and make a profit, they dont have a viable business.

You know what they say about assumptions... No...Ive not been burnt, and ffs give up the "envy" bullshit. I dont have millions or a McMansion, but im happy with what i have.....Also I can just look at a society in which people are homeless and forced to survive on charity, even when "employed", while scumbags "earn" millions per year. 

No one can justify being paid... 300, 400, 500 times as much as the lowest paid worker in their business, and the fact that so many sheep defend this absurd societal structure because they are too selfish, greedy or stupid to see an alternative is just very sad.

 

So if you earn millions a year you are a scumbag, get's better. What about millionaires that give to charity, are they scumbags? So effectively you are after a communist society......right. I'll leave it there.

[ozleicester]

Just now, Tommy G said:

So if you earn millions a year you are a scumbag, get's better. What about millionaires that give to charity, are they scumbags? So effectively you are after a communist society......right. I'll leave it there.

Nope, not what i said....but the misleAding response i expect from some.

Tell me... is the current system working?

[Soar Fox]

Fair play to anyone who goes out on strike for better pay. 
 

Instead of people turning on those going on strike maybe they should show their anger at the companies that have risen the prices of everything forcing people to need more % pay rises. 
 

Rocket up feather down.

[fox_up_north]

Am I the only one who would be quite happy to just see the back of work and everyone live a fairly standard, mundane life that just finds joy in the everyday?

 

Give me 40 years of keeping active, seeing friends and enjoying the outdoors over working to afford a house, holidays and other stuff. 

[TeamRocket]

Well am gonna be out of a job soon cos my store I work in is shutting down with so short notice.

Edited 16 August 2023 by TeamRocket

[ozleicester]

1 hour ago, fox_up_north said:

Am I the only one who would be quite happy to just see the back of work and everyone live a fairly standard, mundane life that just finds joy in the everyday?

 

Give me 40 years of keeping active, seeing friends and enjoying the outdoors over working to afford a house, holidays and other stuff. 

If you possibly can.....Do it... its the best decision i made.

After working for 40 years. I Took a massive reduction in income, moved to a cheaper quieter country location and started part time work for an NGO. You will of course be accused of envy by the societal sycophants when you point out the failings of the system but its worth it, for me at least, to work fewer days than i "play", to be available to help my family and community if needed, and to enjoy my life.

[dsr-burnley]

11 hours ago, ozleicester said:

A business first responsibility SHOULD be to ensuring its employees are appropriately paid for their service. Then its responsibility is to pay its taxes...finally it should be to its shareholders (who lets be honest have done NOTHING to earn any money from this business, just a bunch or neer do wells with cash).

Prior to the 70s, this was the model.

Just for clarity, are you saying that instead of raising capital from shareholders, they should be raising capital by further bank borrowings?  Or from another source?  Or perhaps do without capital altogether?

 

The advantage of getting funds from shareholders is that (as the covid years proved) in the bad years, you don't have to pay them a dividend and there is nothing that any government needs to do about it.  And when interest rates vary wildly, like now, the company can be more stable with its dividends.  If the funding is by loan or other interest-bearing instrument, the payment to service the loan is both volatile and uncontrollable, which puts the company into higher risk of bankruptcy and therefore being unable to pay its employees anything at all. 

 

Be careful what you wish for.

[dsr-burnley]

1 hour ago, fox_up_north said:

Am I the only one who would be quite happy to just see the back of work and everyone live a fairly standard, mundane life that just finds joy in the everyday?

 

Give me 40 years of keeping active, seeing friends and enjoying the outdoors over working to afford a house, holidays and other stuff. 

I'd certainly go for that.  I can sit around enjoying life for 40 years while other people work to bring me food, build my house, supply my fuel, and so forth.  (Of course, if everyone chooses that lifestyle then I will have to grow my own food and build my own house and fetch my own fuel; and then it starts to become like work again.)  

[ozleicester]

16 minutes ago, dsr-burnley said:

Just for clarity, are you saying that instead of raising capital from shareholders, they should be raising capital by further bank borrowings?  Or from another source?  Or perhaps do without capital altogether?

 

The advantage of getting funds from shareholders is that (as the covid years proved) in the bad years, you don't have to pay them a dividend and there is nothing that any government needs to do about it.  And when interest rates vary wildly, like now, the company can be more stable with its dividends.  If the funding is by loan or other interest-bearing instrument, the payment to service the loan is both volatile and uncontrollable, which puts the company into higher risk of bankruptcy and therefore being unable to pay its employees anything at all. 

 

Be careful what you wish for.

One option is to raise funds from your employees, those well paid partners in your company who will benefit from the investment of their capital and receive a return on their work and investment.

There is a myth that capitalism causes innovation this is fundamentally untrue. If anything, it penalizes it - look at how iPhones have slowly removed features like the headphone jack, implemented planned obsolescence, etc.

Edited 15 August 2023 by ozleicester

[Jon the Hat]

13 hours ago, Sideshow Faes said:

The public sector is comparatively better educated than the private sector and the role it fulfills is (subjectively) more important to the country in many cases. Expecting those people to take part cuts every single year is clearly ridiculous.

Isn't this stat because they outsourced all the junior roles to the private sector?

[Jon the Hat]

12 hours ago, ozleicester said:

A business first responsibility SHOULD be to ensuring its employees are appropriately paid for their service. Then its responsibility is to pay its taxes...finally it should be to its shareholders (who lets be honest have done NOTHING to earn any money from this business, just a bunch or neer do wells with cash).

Prior to the 70s, this was the model.

No profit = no business.  It really is that simple.  Everyone needs to make a return on their investment, whether that is time or money.  Take away the profit and the money goes elsewhere, and jobs are lost.  A balance of the three is essential.  Your idea that capital is all unearned and hence deserves no return is frankly nuts.

[ozleicester]

3 minutes ago, Jon the Hat said:

No profit = no business.  It really is that simple.  Everyone needs to make a return on their investment, whether that is time or money.  Take away the profit and the money goes elsewhere, and jobs are lost.  A balance of the three is essential.  Your idea that capital is all unearned and hence deserves no return is frankly nuts.

Nope, not what ive said. Infact quite the opposite.

I stated, if a business isnt profitable... it isnt a business, (although try telling that to the corporate crooks at tax time). I said the business's first responsibility is to those who work in it, they must be paid appropriatley, then the business's tax responsibilities must be met.... THEN the shareholders.

Profits are quite simply the unpaid wages of the working class.

[Jon the Hat]

13 minutes ago, ozleicester said:

Nope, not what ive said. Infact quite the opposite.

I stated, if a business isnt profitable... it isnt a business, (although try telling that to the corporate crooks at tax time). I said the business's first responsibility is to those who work in it, they must be paid appropriatley, then the business's tax responsibilities must be met.... THEN the shareholders.

Profits are quite simply the unpaid wages of the working class.

If that is the case the working class should be setting up their own business to earn them.

[ozleicester]

11 minutes ago, Jon the Hat said:

If that is the case the working class should be setting up their own business to earn them.

Or.. the existing business's should pay them properly.

Tell me again how the current system is working and fair? 

Greg Goodman, the chief executive and co-founder of logistics giant Goodman Group, was the highest-paid Australia-based chief executive when using a metric called “realised pay”, which includes company equity that may have been claimed. On this metric, Greg Goodman earned $44.3m in 2022.

Average salaries for Goodman Driver: $43409

Honestly, do you believe the current system is working?

[Jon the Hat]

1 minute ago, ozleicester said:

Or.. the existing business's should pay them properly.

Tell me again how the current system is working and fair? 

Greg Goodman, the chief executive and co-founder of logistics giant Goodman Group, was the highest-paid Australia-based chief executive when using a metric called “realised pay”, which includes company equity that may have been claimed. On this metric, Greg Goodman earned $44.3m in 2022.

Average salaries for Goodman Driver: $43409

Honestly, do you believe the current system is working?

If he is taking big profits from the business (notwithstanding most of that is probably rebound of their share price in 2022) then a competing firm will to accept lower profit has an opportunity to come in and compete with them, while still paying drivers more. Not that Goodman is just a delivery company by any stretch of the imagination.