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Federal Reserve chair says decline in workers' share of profits 'very troubling'

latimes.com

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Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#71

Post by lsiebert »

Shivetya wrote: post #21
ams6110 wrote: post #5

People need to be taught about investing and the time value of money from an early age. If you invest in some low-cost index funds, you share in the profits. And if you start early, it doesn't have to be a big sacrifice.

What Americans need is more emphasis on creating and sticking to budgets, recognizing true needs versus wants, and how to save. Investing can come later after the budget which includes some attempt at savings. Many people who enter a program to learn how to budget quickly learn how all the monthly bills in their life add up quickly to consume their income. Examples are spending too much on cell and internet service p…

Okay, this is a post about how wages haven't gone up, not about how bad americans are at budgeting. American's haven't suddenly gotten bad at budgeting, real wages have been stagnant as the cost of many things, like college for their kids, new homes, etc, have gone up significantly.

Where is your post about how million dollar CEOs need to cut their executive pay budgets, stop paying for new yachts, and pay their workers a higher share of profits instead of taking higher pay, in order to encourage the economy?

Why is it the people who have the least who have to tighten their belts?

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#72

Post by israelisreal »

csense wrote: post #52

40-50 years ago, a young person fresh out of high school could get a job that allowed them to live the middle class life -- own a house and support a family with only one spouse needing to work. Nowadays even college graduates struggle to achieve "liftoff." Globalization has led to a race-to-the-bottom situation where jobs flow across borders, to the places where desperate poverty allows wages to be as low as possibl…

I agree. I remember those days. At 50, I've been in IT now for 3 decades. The pay in IT has decreased as well. My dad pulled a family of four along on his salary and we were comfortable, but not rich. I lacked nothing. However... when I turned 10, I came home one day from school and there was a brand new mower sitting in the driveway with a gas can and a rope. My dad said, "Son, canvas the neighborhood and charge $5-10 (size) a lawn. That money is yours. Save a dollar for every 10 for gasoline." I was making about $250 a month.

This taught me to get off my own butt and make it on my own, which I have. I paid my own way through college (impossible now), bought my own car, married a woman who did the same. We are largely debt free (mortgage), but will be free soon. Except for property tax, we owe no man anything, and this is the way it should be. Pull yourself up by your own bootstraps. Big daddy government is not the answer and technically owes you nothing. As Gerald Ford once said, "A government big enough to give you everything is big enough to take it all away."

Sadly, this young generation has embraced the notion of entitlement. No one is owed anything except human dignity. Americans have lost the sense of doing it on their own. Te military is a great choice for kids who cannot afford college. I'm not babying my kids. They will need to make it on their own. My dad did it, I did it, my wife did. None of us were rich, and by today's standards, we would have been considered poor.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#73

Post by NickBusey »

anon12341234 wrote: post #33
AlimJaffer wrote: post #9

Earlier quoted context omitted.

With what money? Between student debt, stagnant wages, the 'gig' economy, and limited mobility - how is anyone supposed to save a reasonable sum to invest in even when taking into account the joys of compound interest?

With the money they use to go to bars, pay for netflix, eat out at restaurants, go to concerts, buy video games, etcetera etcetera. Almost every person who claims to have no money to invest actually has plenty of money; they just squander it on immediate gratification.

Yea those damn Americans, always wanting to, you know, actually live a life and not sit at home apparently staring at a wall to save money.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#74

Post by epicureanideal »

anon12341234 wrote: post #33
AlimJaffer wrote: post #9

Earlier quoted context omitted.

With what money? Between student debt, stagnant wages, the 'gig' economy, and limited mobility - how is anyone supposed to save a reasonable sum to invest in even when taking into account the joys of compound interest?

With the money they use to go to bars, pay for netflix, eat out at restaurants, go to concerts, buy video games, etcetera etcetera. Almost every person who claims to have no money to invest actually has plenty of money; they just squander it on immediate gratification.

Netflix is $10 per month. I am sympathetic to the view that people are squandering money they could invest, but in many cases it's just not a meaningful amount of money. Buying a video game every couple months is what, $50 or $100? Sorry, but this just isn't meaningful compared to things like rent and transportation. If someone is paying $1000 per month in rent, a single month of rent is an entire year of saving on little things, and that's a level of rent that's relatively low even far away from the Bay Area.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#75

Post by jrjarrett »

csense wrote: post #52

40-50 years ago, a young person fresh out of high school could get a job that allowed them to live the middle class life -- own a house and support a family with only one spouse needing to work. Nowadays even college graduates struggle to achieve "liftoff." Globalization has led to a race-to-the-bottom situation where jobs flow across borders, to the places where desperate poverty allows wages to be as low as possibl…

But he is going about it completely wrong. Imposing tarriffs on things we need to produce when we cannot meet our own demand, and won't ever again only lets other countries impose tarriffs on things we NEED to sell.

Take steel for example: https://www.statista.com/statistics/268683/us-steel-demand-s...

In 2017 the US needed 100M metric tons of steel as raw material. We only produced 23M tons. Where is that difference coming from? Purchasing it from other countries. We just don't have the production to make what we need, so why on earth would anyone force the price of that upwards?

So now the cost of everything goes UP 25% or more due to tarriffs, and we no longer can sell our exports of soybeans or whatever because they're now 25% more expensive overseas.

Explain how that makes "America Great Again."

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#76

Post by israelisreal »

isostatic wrote: post #66
israelisreal wrote: post #39

My daughter is going into the Air Force, getting her degree at night for nothing in 2.5 years, going back in as an officer, effectively doubling her income all the while not paying for food, lodging, medical/dental. She plans on doing 20. She'll likely marry an Air Force officer, and two people retiring at 39/40 YO will have a combined retirement of just under 100k (today's money), all the while not wasting precious…

All paid for by those who don't go into the military–industrial complex, but instead pay enormous taxes to fund it. The kid fixing broken windows does well too. The U.S. accounts for 35% of the world's defence spending, more than twice that of Russia and China together.

You are paying for it by your service, which only 1% of the population serves. I have nothing but respect for the military and those who serve. People need to stand behind the troops or in front of them. People sleep well at night because of the military and their sacrifice.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#77

Post by oh_sigh »

legitster wrote: post #27

To me it is pretty ridiculous how much labor is taxed, and how little capital is taxed. Especially if we are worried about automation and lack of productivity growth, it seems so counter-intuitive that we are completely stuck to a tax system that devalues workers.

It always seemed to me that losing X hours of your life every day to perform the labor was tax enough.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#78

Post by astrodust »

pmoriarty wrote: post #55
legitster wrote: post #27

To me it is pretty ridiculous how much labor is taxed, and how little capital is taxed. Especially if we are worried about automation and lack of productivity growth, it seems so counter-intuitive that we are completely stuck to a tax system that devalues workers.

It's not counter-intuitive if you look at who makes the laws. The system is one where back-scratching, ass-covering, and kickback-giving is the norm. It's surprising there's any tax on capital at all. A few more rounds of conservatives in power might take care of that. Conservative anti-tax crusader Grover Norquist once said, "I don't want to abolish government. I simply want to reduce it to the size where I can drag…

Those are the kinds of people that are astonished at what those running the show are doing these days.

Conservative pundits from the 1990s are rabid leftists by the standards of the current regime. Richard Nixon would be branded a communist!

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#79

Post by methodover »

The allocation of profits in startups, at least, feels... problematic.

I was the #2 engineer hire when I was hired five years ago. Since then, we haven't become super successful -- yet -- but we're at least at breakeven. We have three engineers and we're working on a huge new project that hopefully will really grow the company.

I have 1.8% equity.

Sometimes when I'm working late or working on the weekend, which is often, I wonder: Is this really worth it?

I'm totally fine with taking a pay cut to build something new, in order to have the chance at making life changing money. But at the equity I have, we'd need to be quite successful in order to get that.

The VCs who funded our seed and series A (the only funds we've raised) will see the lion's share of the profits. Emotionally, that feels odd. We've thrown a significant percentage of our lives, and they've only thrown in money -- and a pretty small amount of it, really. I know it's supposed to make sense from a financial perspective or whatever, but emotionally it doesn't feel fair.

But hey I guess it worked, I have what feels like a small percentage and yet I'm throwing everything I have at this company. I'm likely an outlier, though. I suspect that if VCs and founders gave employees a bigger piece of the pie, they'd have a much more motivated workforce.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#80

Post by astrodust »

toomuchtodo wrote: post #48
jiveturkey wrote: post #38

Earlier quoted context omitted.

define "we".

> define "we". People who want to avoid violent revolution, which historically has occurred when inequality has reached a certain threshold. https://www.marketwatch.com/story/want-to-level-income-inequ... https://www.economist.com/books-and-arts/2017/03/02/the-less...

Either you fix the system or the system fixes you.

When you grind people down so much that tens of millions have nothing left to lose, watch out.

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