Federal Reserve chair says decline in workers' share of profits 'very troubling' • Hacker News Board

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

#131

Post by slg » Tue, Jul 17, 2018, 9:09 PM UTC

kadenshep wrote: post #111

slg wrote: post #97

Earlier quoted context omitted.

I am not victim blaming, I am pointing out a way that the "broken system" has failed to educate people about the problem. You also can't just cite the average cost of living as if that it is a standard that has no waste in it. We need to do a better job of framing things like "if you switch to a worse phone plan and save $10 per month to invest, you will probably have something around $30,000 in 30 years while only i…

I edited my comment to remove the statement "Stop blaming people for a system they didn't choose." I'm sorry you read it. It was unnecessary and you're right, you're not really victim blaming. I got frustrated at face value because increasing wages would do more to alleviate a lot of American's financial woe's -- now and later -- than (rightfully) helping to educate Americans about investing money. You're right, even…

I sincerely appreciate this reply. Not enough people are willing to do to what you just did.

I agree with everything else you said here. More money is always going to be the quickest and simplest fix for this. I was simply pointing out that financial education should also be part of an ideal solution and that education alone is "better than nothing."

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

#132

Post by headcanon » Tue, Jul 17, 2018, 9:09 PM UTC

israelisreal wrote: post #92

headcanon wrote: post #87

Earlier quoted context omitted.

I'm happy for your daughter, but I'm not sure what your point is. State service can be a rewarding career path, I don't think that is in debate here.

The post was meant to state that there are paths that do not require going into mounting debt. The military is a fine path for those who are wired that way. It teaches discipline, team work, being a part of something bigger than yourself, and in return you basically live for free, largely pocketing the lion's share of your income. A young person can get a degree at night in the military (free) and if they like the mi…

The statements "There exist valid and rewarding career paths for those who are willing and able" and "There exists a troubling economic trend between the relationship of capital vs labor that should be addressed" are not contradictory statements - both can be true.

People should have a sense of personal responsibility, certainly. People should also be financially educated and make good career decisions. We should also look to our political and financial organizations to find problems in the large and do what we can to fix them. And since we live in such a diverse society with drastically different values (the very values your daughter and her colleagues nobly fight to protect), the answer is not "everyone else should adopt my way of thinking". Even if you're "right", that is simply not a realistic path for policy makers, who need to deal with problems in the large.

Maybe this will highlight my thinking - I'm an engineer who went to engineering school and chose a rational career path with high expected gains. I have friends who majored in art at a very expensive school and will likely never be able to pay off their debts. I would say they did not manage their career well and perhaps should have made a different decision. However I would not want to live in a world where we did not have artists. Art education of some type is necessary for us to maintain our culture, so if everybody did the personally "rational" thing where would we be as a society?

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

#133

Post by padobson » Tue, Jul 17, 2018, 9:09 PM UTC

acchow wrote: post #102

methodover wrote: post #79

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 of…

But you're also part of the problem. Startups offer very little equity because they're able to find someone they want that will take it. Were you coerced into this agreement?

I agree with this. Every offer I've gotten from an early-stage startup was market salary and <1% equity, often when I was engineering hire 1-5. I had conversations with founders and told them that if they couldn't meet my market rate, they had to give me 3-5% of the company. They all said no, so I did to. Then I'd get my market rate from a bank or a security company or went back to contracting for multiple clients.

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

#134

Post by maerF0x0 » Tue, Jul 17, 2018, 9:11 PM UTC

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…

> to the places where desperate poverty allows wages to be as low as possible, and the greatest degree of worker exploitation is allowed.

Not that it helps people today, but eventually this trend leads to reductions in poverty and their children demand more. Look at China's middle class. I don't doubt that in 50 yrs they'll be equally as entitled as American and European labor.

So I agree this is a hard time, but I think it's the result of non-smooth changes in protectionism and the ability to globalize the workforce.

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

#135

Post by DenisM » Tue, Jul 17, 2018, 9:13 PM UTC

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.

Top corporate tax rate in 2017: 35%. [1]

Typical individual income tax: 30%. [2]

[1] https://www.thebalancesmb.com/corporate-tax-rates-and-tax-ca...

[2] https://www.fool.com/retirement/2017/03/04/whats-the-average...

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

#136

Post by malcolmgreaves » Tue, Jul 17, 2018, 9:14 PM UTC

vturner wrote: post #129

Why doesn't the stock market act as a balancing system to low wages? Lowering wages implies higher efficiency thus resulting in higher profits which ultimately end up in "investors" pockets. Why are these "investors" not the common American "worker" whose wages are low? Why has the market not created such an instrument to supplement the "worker" who has low wages but could ultimately profit from the ever-increasingly…

Because you need lots of captial in order to buy enough stock to make a substantial life improving financial gain. The short term gains, fluctuations, etc. can easily wipe out the capital gains that one is able to make on a worker's take home pay.

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

#137

Post by padobson » Tue, Jul 17, 2018, 9:14 PM UTC

vturner wrote: post #129

Why doesn't the stock market act as a balancing system to low wages? Lowering wages implies higher efficiency thus resulting in higher profits which ultimately end up in "investors" pockets. Why are these "investors" not the common American "worker" whose wages are low? Why has the market not created such an instrument to supplement the "worker" who has low wages but could ultimately profit from the ever-increasingly…

I feel like unions really missed the boat on this one. Maybe I don't know union history well enough, but it seems like the UAW should have made large equity stakes in Ford, GM and Chrysler (or the equivalent historical companies) important priorities in their heyday.

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

#138

Post by codexon » Tue, Jul 17, 2018, 9:15 PM UTC

oflannabhra wrote: post #18

Powell also spoke to this in a recent interview with Marketplace[0] >Ryssdal: I want to get to the regulatory part of your job, which you address right there in a second, but I want to first talk about some of the things that came out of the financial crisis that we're still dealing with. And maybe the most relevant for consumers in this economy is the idea that wages now for a decade or more really have been stuck.…

The answer is so obvious I find it strange that Powell is confused.

Globalization.

No one is going to pay workers here more when they know that workers are getting paid $2/hr in China or Cambodia.

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

#139

Post by TaylorAlexander » Tue, Jul 17, 2018, 9:15 PM UTC

test6554 wrote: post #108

wavefunction wrote: post #98

Earlier quoted context omitted.

Sounds like you should probably start researching now if a 20% capital gains rate makes you think "Latin America" outweighs an additional 5% in taxes.

If Bernie Sanders was elected, I wouldn't just move my money. I'd take my chances with the cartels. Free health care, free tuition, $15 minimum wage, guaranteed sick days and paid time off. Universal basic income, unicorns, etc. And the 3-5 trillion dollars it costs each year can just be paid by either the wealthy or by placing crippling debt upon future generations. Either way, free stuff is good.

You leaving is a risk I’m willing to accept to help millions of Americans access health care.

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

#140

Post by Analemma_ » Tue, Jul 17, 2018, 9:16 PM UTC

DenisM wrote: post #135

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.

Top corporate tax rate in 2017: 35%. [1] Typical individual income tax: 30%. [2] [1] https://www.thebalancesmb.com/corporate-tax-rates-and-tax-ca... [2] https://www.fool.com/retirement/2017/03/04/whats-the-average...

Absolutely nobody pays the actual statutory corporate tax rate, the average tax rate paid by US business after applying loopholes and so on is 22-24%: [1], and about a fifth of profitable companies pay no tax at all: [2]. This is so well-known and obvious that even mentioning the 35% rate at all is evidence of bad-faith arguing.

[1] https://www.cbpp.org/research/federal-tax/actual-us-corporat...

[2] https://www.forbes.com/sites/eriksherman/2017/04/24/trumps-c...