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

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

#231

Post by edoloughlin »

dunpeal wrote: post #191
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…

> Sometimes when I'm working late or working on the weekend, which is often, I wonder: Is this really worth it? The key problem in your (all too common) story is that you're only waking up to reality now. I'm guessing that like most startup employees, you were swayed by initial aggressive courtship by the founders / chief-execs, with lots of vague handwaving and hyperboles telling you that you'll definitely become a…

From your perspective, you are already fully vested. [...] No sense in staying to be underpaid and overworked. [...] Your current startup likely won't collapse if you leave, so you're not risking your existing equity.

Employees usually have to buy their vested options if they leave or lose them. That means you have to raise the cash for the options there and then and you might incur a tax liability for the capital gain (in some jurisdictions it's actually taxed as income!). This doesn't usually make sense if the company isn't near being acquired or IPO'ing (and who does that any more?).

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

#232

Post by inetknght »

marme wrote: post #222
inetknght wrote: post #206

Earlier quoted context omitted.

> Nobody is concerned about wages in tech. Speak for yourself. Wages in tech is highly consolidated into tech owners, tech engineers, and then tech support. Anyone on the periphery is not getting their fair share whatsoever.

how to define fair?

That's the crux of the problem, isn't it?

If the company has millions of dollars in not just revenue but profits and a significant number of its employees are below poverty level and/or on welfare, is that fair? No, definitely not.

If the company's profit per employee is more than a certain percentage of a given employee's salary, is that fair? No, probably not.

If the company were to distribute a 10% salary bonus to all employees, would that bonus eliminate profits?

If the company were to distribute 10% of profits to all employees equally, how much difference against their salary would that change be?

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

#233

Post by slg »

s73v3r_ wrote: post #169
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…

"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 investing $3,600."." Prove that is possible. Find an investment that will do that.

Those were back of the napkin numbers. The S&P 500 has an average annual return around 10%. With a monthly investment of $10, it would take just over 32 years to get to $30,000. So I might have been a little too generous but the numbers are still realistic and the specific numbers were not really the point of the comment anyway.

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

#234

Post by npsimons »

SketchySeaBeast wrote: post #152
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 f…

> There's a barrier to entry and a requirement in regards to education that are intrinsic in the stock market.

This right here. While the audience here should be able to invest, based on income and education levels, the sad fact is that a vast majority of people have never been taught to save or even budget. I am very much in favor of self-reliance, but when you have an entire generation raised by a generation that doesn't save, what do you think is going to happen? Add on to this ever increasing prices in rent and basic necessities (food, utilities), and it's not a surprise when the vast majority of people don't own stock, even in an index fund. Shit, pensions were created over half a century ago because our grandparents couldn't be trusted to save for retirement!

I will say this: scrape together $1k USD, open an account at Vanguard and put it in a total stock market index fund. Keep putting money into it, as much as you can afford. There are other better websites out there that go into more detail, but that's the gist of it.

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

#235

Post by yardie »

knuththetruth wrote: post #51
arblegobblebrbl wrote: post #40

Earlier quoted context omitted.

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

Laws designed to protect workers are pretty rarely enforced, or only through costly legal proceedings that most working class people can’t afford.

Labor disputes are handled through state and federal labor relations boards. You file a complaint, an investigation is started, and eventually a ruling is made. Lawyers are not a requirement but the employer will probably send one anyway.

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

#236

Post by slg »

noobermin wrote: post #179
slg wrote: post #36

Earlier quoted context omitted.

I don't disagree with you, but the obvious counter is that you are mixing causation and correlation. You would have to show that people are not investing because they have no extra money and not that they are choosing to use their money now instead of investing. Realistically it is likely a combination of those two and therefore the comment that started this thread has a point that teaching people about investing can…

Has there ever been a real precedent for a society where a majority of them provide for themselves by investing in the stock market over living off of a wage? And I bet it is a combination of the two. Just I think it is probably 0.1% of because people don't do something they've generally never done and 99.9% that real wages haven't kept up with inflation.

No one was suggesting that a majority of society lives purely off investment income, just that investing can provide benefits for working class people too.

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

#237

Post by Art9681 »

bluGill wrote: post #216
Art9681 wrote: post #115

Earlier quoted context omitted.

I'm a veteran that had to enlist so I could get out of poverty. I also lean left. Let me say this out of a little spite since you decided to get political: If you and your daughter's mother made the "right" decisions, your daughter wouldn't have to enlist in the military to have a chance at a good life. I'll show myself out now.

This is true for poor people, but I know kids who have gone into the military form backgrounds where they could have gone other routes. They have the background to get a student loan to pay for everything.

Depends on the situation. I enlisted in 11th grade. I got a scholarship awarded as a senior and my recruiter told me it was too late to change my mind. A lot of kids are not aware of their options and neither are their parents. Also, the kids that enlist for the excitement of being a soldier base their decisions on the glorified version of events presented in movies and the media. Real war is an awful thing to witness. No sane person would ever enlist to take part in it.

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

#238

Post by dunpeal »

edoloughlin wrote: post #231
dunpeal wrote: post #191

Earlier quoted context omitted.

> Sometimes when I'm working late or working on the weekend, which is often, I wonder: Is this really worth it? The key problem in your (all too common) story is that you're only waking up to reality now. I'm guessing that like most startup employees, you were swayed by initial aggressive courtship by the founders / chief-execs, with lots of vague handwaving and hyperboles telling you that you'll definitely become a…

From your perspective, you are already fully vested. [...] No sense in staying to be underpaid and overworked. [...] Your current startup likely won't collapse if you leave, so you're not risking your existing equity. Employees usually have to buy their vested options if they leave or lose them. That means you have to raise the cash for the options there and then and you might incur a tax liability for the capital ga…

As an early employee, his strike price should be low, so the cost of buying his stock shouldn't be prohibitive. I'm not sure about tax laws, but I'm very sure that paying some tax should not be a reason for OP to stay where he's being overworked and underpaid.

I doubt the tax burden is so bad, but if it is, then the decision to join the startup in the first place was even worse than it seemed before. OP should just treat it as a sunk cost, cut his losses and leave.

Staying just escalates his investment and near-certain losses.

I haven't worked for startups in a while, but if the tax situation got to a point that it's compelling employees to stay put, then working for a startup is even less sensible than I thought.

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

#239

Post by methodover »

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.

Yeah, I mean you're absolutely right. I'm in an incredible position, and yet, it still feels unfair. I'm 90% sure that it's just that I'm petty and greedy.

And yet, like, at the end of the day the engine that drives the economy forward -- and humanity forward -- isn't cash. It's individual human beings sitting down and putting in the hard work in creating something new and nurturing it for years.

It feels like our economy gives most of the rewards to the people who put in money, and not enough to the people who put in the actual hard work. Even here, where things are amazing for employees.

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

#240

Post by DenisM »

Analemma_ wrote: post #140
DenisM wrote: post #135

Earlier quoted context omitted.

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.forbe…

The HN guidelines stipulate that you assume good faith: https://news.ycombinator.com/newsguidelines.html

Do you?

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