Recovery up – living standards down

11 comments on “Recovery up – living standards down ”

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1. prism 1

   1 April 2011 at 9:40 pm

   What about making it mandatory for workers to share in profits? If they have to agitate for better wages, at least they would get recompense for hard work.
   • uke 1.1

     2 April 2011 at 4:49 am

     I think Ken Douglas once made a similar comment. His argument was that most workers “invest” a company more than they ever recompensed via wages: committing to the job long-term, settiling nearby, buying a house, raising a family etc. He contrasted this with investors and shareholders who “only” commit their funds and are also covered by limited liability, such that they are legally shielded from any adverse consequences their investment might have enabled to happen.

     Good ‘Economist’ article, too, and interesting to read some of the comments by readers.
   • chris73 1.2

     2 April 2011 at 4:17 pm

     If a company doesn’t make any profit and has to borrow to remain afloat will workers pay for some of the loan?
     • Colonial Viper 1.2.1

       2 April 2011 at 4:26 pm

       That’s a bullshit deal, instead sell ownership over to the workers to raise the needed capital, mate.

       That would be a step in the direction of a democratic socialist economy.
       • chris73 1.2.1.1

         2 April 2011 at 4:34 pm

         Assuming the workers have the capital and assuming the owners want to sell

         But whys it bullshit? Prism wants workers to share in the profits so they should also share in the losses as well, cant have it both ways
         • Colonial Viper 1.2.1.1.1

           2 April 2011 at 4:43 pm

           It’s a bullshit idea because providing a loan is not where the real money is. Ownership is where the real money and the real power is.

           If a company needs capital, workers can source that capital.

           Once the workers own part of the company, or say all of the company, they will also own all future profits. Good eh. That’s proper profit sharing. The workers who do the work get the profits. Not some faraway group of major shareholders and Board of Directors who don’t even know how to turn the lathes on.

           And what if the owners do not want to sell? Hey if they are strapped for capital they merely need to consider it an option.
           • chris73 1.2.1.1.1.1

             2 April 2011 at 4:58 pm

             No the people who set up the business get the profits, if the workers want the profits then they can set up their own business
             • RobC …

               2 April 2011 at 5:19 pm

               Chris, leaving sole-traders and perhaps very small business aside, companies cannot exist without workers. In society both are needed and are interdependent on each other. Taking your argument to an illogical extreme, if all workers decided to “set up business” then there would be no workers to sustain business.

               I ask you to reflect on a quote from A. Lincoln in 1861 – 150 years ago …

               Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration
               • chris73 …

                 3 April 2011 at 8:54 am

                 Sounds like a hippy 😉
2. Jum 2

   2 April 2011 at 2:02 pm

   Which one do I choose? Rob’s The New American Dream or Mike’s Recovery up, Living Standards Down? I know – I’ll copy it to both. It affects both threads only not in America or Britain but in New Zealand.

   Just when I thought the property investors federation were about to attack the vulnerable, I read this:

   http://www.scoop.co.nz/stories/PO1104/S00024/house-prices-not-main-cause-of-poor-productivity.htm
   • RedLogix 2.1

     2 April 2011 at 2:39 pm

     Andrew King is no fool.

     “Is lack of capital really the key problem with New Zealand’s productivity? Perhaps there are other more serious factors, such as selling our most profitable businesses, like banks, to overseas owners; selling low value primary products rather than hi tech and high value products; poor management of our existing companies; ineffective use of new technology or low economies of scale through focus on the domestic market.”

     While the guy may be a bastard capitalist landlord/investor… like me he’s never been a fan of the insane expansion of bank credit that pumped up the property market last decade. Any real investor KNEW that in the long run that could only hurt the market.

     The end result was that we have hundreds of billions of dollars tied up in mortgages that will take 15-30 yrs to pay down at a monstrous expense. Never, ever, forget that a typical 25yr table mortgage will repay 3-5 times the original principle in interest costs alone over the lifetime of the debt. And that each time you re-finance with a new mortgage, the table gets reset back to zero.. ie your back to paying 100% interest, 0% capital… every time.

     And we keep repeating this insanity on the same old stock of rubbish houses that we keep trading each other generation after generation. Still if you think this is a bad deal… try having it all blatantly stolen off you by the insider trading, sharp-suited den of thieves that is our stock market/investment industry

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