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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'

#151

Post by Gibbon1 »

sbov wrote: post #49
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.

The reason is simple: labor has less options. Capital can mostly go where it pleases - if it is taxed too much it might flee the country. But your 160 million workers aren't going to uproot themselves and move to another country because they're too heavily taxed.

> Capital can mostly go where it pleases

Historically this was not the case at all. It's only during the modern neoliberal era that this is true.

Thing to remember Capital isn't a primary resource like energy, infrastructure, materials, and labor.

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

#152

Post by SketchySeaBeast »

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…

There's a barrier to entry and a requirement in regards to education that are intrinsic in the stock market. You also need liquid cash you're willing to part with, and in large enough amounts to matter. And in between the stock market and the worker are a ton of predatory "advisers" who would rather suck someone dry with fees than ever see the worker profit.

I'm finally at a point where I have enough liquid cash to finally start investing, and I'm finding the whole process very daunting. Trying to get enough information to make the "right" decision has filled me with analysis paralysis.

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

#153

Post by extralego »

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.

Please just go now.

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

#154

Post by jcranmer »

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…

> There's a lot I don't like about Trump, but I think his tariffs really will make America great again (if they aren't just repealed by the next administration). Because we're finally doing something about this situation.

The tariffs are at best misguided and most likely highly counterproductive. In the steel sector, the main problem boils down to China massively overbuilding steel production in the past decade and dumping (subsidized) steel on the world market. Building a coalition of nations to confront China on this matter wouldn't be very difficult... but Trump manages to make it about attacking Europe, Canada, and Mexico instead. And the fact of the matter is that there are far more jobs in manufacturing sectors that are at risk because of sudden increases in raw materials brought about by tariffs than there are job prospects to be brought back. On top of that, the resulting trade war is going to cause more pain in the labor market in unrelated segments.

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

#155

Post by acct1771 »

jrjarrett wrote: post #75
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…

Because the seller still needs to sell it. And their reduced cost of goods sold compared to USA is low enough to sustain a decrease in margin. How much, I don't know.

Devil's advocate: who else will actually buy that steel?

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

#156

Post by s73v3r_ »

arblegobblebrbl wrote: post #40
wavefunction wrote: post #32

Earlier quoted context omitted.

It's hard for working-class people to get away from their jobs to vote.

Its the law that you must be given time away from your job to vote.

And good luck proving that you were let go from your job because you went to vote.

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

#157

Post by extralego »

Analemma_ wrote: post #110
hammock wrote: post #42

Earlier quoted context omitted.

Who is worried about automation and lack of productivity growth? Seems like the worry is over inequality.

People who would rather not change the balance of power between labor and capital worry about lack of productivity growth, because up until recently productivity growth was the bandaid hiding the underlying problems with inequality. As productivity growth stops, we have to address the actual problems, and certain people would rather not.

But Steven Pinker and Bill gates said things are better than ever before.

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

#158

Post by tdb7893 »

pembrook wrote: post #124
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…

That's not what the Fed chair is talking about. Nobody is concerned about wages in tech. Tech is one of the few industries that has the opposite of a stagnant wage growth problem.

We are paid a lot but I heard somewhere that even though we should have crazy bargaining power we still are capturing less of the profits than would be expected so tech isn't fully immune to it (especially if you aren't working at one of the more famous tech companies)

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

#159

Post by germinalphrase »

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…

Are you suggesting some kind of "American Dividend" for all citizens?

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

#160

Post by gbacon »

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…

We've thrown a significant percentage of our lives, and they've only thrown in money

Money saved, borrowed, or inherited represents a significant percentage of someone’s life. Even if you deny this, the money in someone’s pocket in the present represents an enormous percentage of that person’s future life.

Put yourself in the shoes of the owner who took risk up front. Yes, you took some as well, but at any time you could have walked away and accepted another job. If the owner put on chains of debt, walking away means losing a house, other significant assets, or payments for years into the future. If the company is at breakeven and debt was involved up front, not much of it has been retired. The debt may be gone, but memory of the burden and stress is not.

Everyone wants equity. Lots if not all employees feel like the deserve it, even the person who answers the phone and could be most easily replaced. The owner presumably took the risk up front with the objective of making money. To make sense, giving away equity should come with an expectation of adding to the owner’s wealth, not subtracting. Employees and consultants who clock out at the end of the day do not fit this criterion and are already being paid in exchange for their time and effort. The people who will add to the owner’s wealth are the people who will bring in new customers, sell more to existing customers, and generally work on the business — not just in it — to make it more valuable.

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