Corporations Going Too Far?

[Phi for All]

The last thirty years or so have seen the rise of corporate efficiency expertise. Wealthy firms that need to get even wealthier hired the best penny-pinchers around, and incrementally over the last few decades, the practices they've instituted have grown profits to record levels.

 

But after these financial wizards removed the low-hanging fruit, they turned their sights on other ways to save. They started paying less and made it clear that the workers were lucky to have a job. Over time, we've seen a good deal of money that should have gone to the middle class get reallocated to the execs and shareholders, where tax loopholes and the best attorneys decrease the amount of revenue the government can claim.

 

They discovered they could make an even bigger profit by writing their own legislation and lobbying it through Congress. They lobby for subsidies, no-bid contracts, and other sweetheart deals that corrupt the spirit of a free market. They get to de-regulate themselves and loosen restrictions even more. Now the financial guys are trying to move headquarters to more tax favorable havens so they can make even more money at the expense of taxpayers they still want as customers.

 

I don't think it's a matter of evil corporations, I think it's a matter of smart people taking advantage of ambivalent voters and a poorly monitored system. But how long can we continue to let these mega-corporations suck the life out of our tax revenue and our purchasing power while still enjoying access to our country's infrastructure and all the benefits that entails? At a certain point, don't you think corporations owe their country's more than just job-making? Shouldn't there be a certain allegiance to the country who holds your corporate charter?

[studiot]

Yes

[Ten oz]

Exploitation of work standards in less affluent countries have contributed to the problem as well. Modernized democracies should not tolerate companies who capitalize from work standards beneath their home country's standard.

[swansont]

Exploitation of work standards in less affluent countries have contributed to the problem as well. Modernized democracies should not tolerate companies who capitalize from work standards beneath their home country's standard.

 

What if they are paying above-average salaries/wages to those employees?

[fiveworlds]

At a certain point, don't you think corporations owe their country's more than just job-making?

 

We have a timber cutting corporation here. It employs two people to maintain robots.

[Phi for All]

We have a timber cutting corporation here. It employs two people to maintain robots.

 

Are you moving your HQ overseas to avoid paying taxes where your corporate charter is issued?

 

Do you hire lobbyists to help pass legislation favorable to you but not your competitors?

 

Has your corporation's wages kept steady with productivity, or has median income diverged like much of the rest of the country?

 

[fiveworlds]

Are you moving your HQ overseas to avoid paying taxes where your corporate charter is issued?

 

Do you hire lobbyists to help pass legislation favorable to you but not your competitors?

 

Has your corporation's wages kept steady with productivity, or has median income diverged like much of the rest of the country?

 

I know the guy who maintains the robots he doesn't get paid very much. Himself and his boss get 7 hours work a week.http://en.wikipedia.org/wiki/General_contractor

Edited August 29, 2014 by fiveworlds

[Phi for All]

I think we've lost the concept of mutual success, where corporations make products and pay their workers enough so they can buy those products, and everyone pays taxes to create infrastructure and programs that help us all. That's the kind of relationship worth paying the military to defend, and the police to protect, and the politicians to represent.

 

Is this just The Tragedy of The Commons being perpetrated by bean counters? Is the middle class income just a common resource they've overused?

 

Would it be all that difficult to start demanding, as consumers/voters/taxpayers, that the corporations we deal with stop skimming so much happiness from our pursuit? We're in this together, which would be easier to see if the CEOs and stockholders took off their greenback-colored glasses and realized that you can't suffocate people and still expect them to be customers.

 

 

 

 

 

I know the guy who maintains the robots he doesn't get paid very much. Himself and his boss get 7 hours work a week.http://en.wikipedia.org/wiki/General_contractor

Perhaps your corporation isn't representative of the focus of the OP.

[tentacle]

there are different types of corporations. there some who are quite amazing which put people in the first place not revenues and profit. sadly mainstream media do not cover those corporations. also there are many corporations, especially in media, pharma, banking, oil, war industry, food industry et cetera who are nothing then a insitutional beast which we feed every day. there are way to fight them but you first must know your enemy. you must know your poison. we, as customers and human beings have right to boycott. in todays world one would think we have democracy. usualy we have divide and rule, representative democracy, small choice, techoncracy and most improtantly new type of monarchies. corporate elite dynasties are ruling in a sense. they are too big to fail. sadly problem started cca. 150 years ago and to change our world we need a multi generation projects.

 

Are you moving your HQ overseas to avoid paying taxes where your corporate charter is issued?

 

Do you hire lobbyists to help pass legislation favorable to you but not your competitors?

 

Has your corporation's wages kept steady with productivity, or has median income diverged like much of the rest of the country?

 

 

 

that graph is great. but you dont need graph to notice that things went wrong. we now have bizzaro and casino economics. backthen only one family member need to work in order that family survive. now, sometimes, even when two are working its not enough to cover expenses. families are going trough big strugle.

I think we've lost the concept of mutual success, where corporations make products and pay their workers enough so they can buy those products, and everyone pays taxes to create infrastructure and programs that help us all.

what you describe is neo classic theory of economics. which i represent often. monetarists, classicists and keynesians are ignorants imho.

neo classic idea of higher wages of workers is based on idea that worker who get paid more will have better health and morale and in the end will be more productive. among others things they are proposing.

Edited August 29, 2014 by tentacle

[Ten oz]

 

What if they are paying above-average salaries/wages to those employees?

I understand the sentiment however the Euro and US Dollar is worth a lot more than the currencies in the various countries exploited. Workers deserve a "fair" share of the profits from their labor. What is "fair" can be very ambigious. As a starting place affluent countries should at least ensure safe work practices based on their current standards. Above average pay should not trump what has already been identified as something we wouldn't allow for ourselves.

[Phi for All]

there are different types of corporations.

 

Of course there are. The corporations I'm talking about are the ones who've been practicing this incremental removal of worker's rights and economic power through the use of abusive fear tactics and questionable accounting practices.

 

We're frogs in a pot of water they've been turning up the heat on for over thirty years. We don't realize how much they've boiled us down to nothing, insisting that productivity climbs even if the income doesn't.

[tentacle]

 

Of course there are. The corporations I'm talking about are the ones who've been practicing this incremental removal of worker's rights and economic power through the use of abusive fear tactics and questionable accounting practices.

 

We're frogs in a pot of water they've been turning up the heat on for over thirty years. We don't realize how much they've boiled us down to nothing, insisting that productivity climbs even if the income doesn't.

 

Phi i on purpose wrote that there are two kinds of corporations. i knew very well on what coroporations you thought when you wrote OP.

i do it because those others corporations should be example to others. yet common people will never hear about them in mainstream media.

what if i tell you that there are corporations where you choose time when you will work, where you can change your section as you desire, where you choose your salary, where you can eneter any meeting and discuss plans for next years or who will be fired? and most importantly those corporations grows by all means. how is that possible? answer isnt simple. but for start they change hierarchy. but tell that to your CEO.

Edited August 29, 2014 by tentacle

[EdEarl]

IMO corporate influence on politics has made the US de facto Fascist. Corporations are now people under the law; although, they don't have the right to vote, they have the right to donate to political parties large amounts $, which essentially means they can buy votes from the politically naive.

 

That Republicans are mostly climate change deniers is not because voters want it that way, it is because rich people who own oil and coal companies buy them.

 

The people still have the right to vote, and can affect elections and change things, but it will take something to get the attention of voters. Perhaps climate change is starting to affect people enough to get their attention. Some poles indicate republicans may loose the house in the next election. But, I'm concerned that some issues like abortion and gay marriage that republicans claim to oppose will continue to get republicans elected, regardless of the fact that republicans have not significantly changed the abortion laws since Roe v. Wade in 1973.

 

 

Wikipedia

According to the Guttmacher Institute, since 1973, roughly 50 million legal induced abortions have been performed in the United States.

On the other hand:

 

Reuters

More than 100 million people will die and global economic growth will be cut by 3.2 percent of gross domestic product (GDP) by 2030 if the world fails to tackle climate change, a report commissioned by 20 governments said on Wednesday.

So, why is abortion a more important issue? (rhetorical)

 

Many voters do not keep up with issues as conditions change, and continue to vote as they always have. Others, don't care what the facts are, because they vote according to some moral or other personal reason. If corporate power is to be reduced, there must be some really attention grabbing reason, and I haven't seen evidence the public is paying attention yet.

[studiot]

Perhaps the most worrying aspect of the thread title is the

 

ISDS section of the proposed TTIP trade deal that allows corporations (that don't pay any tax) to sue a country for loss of income as well.

 

http://en.wikipedia.org/wiki/Transatlantic_Trade_and_Investment_Partnership

[Ten oz]

IMO corporate influence on politics has made the US de facto Fascist. Corporations are now people under the law; although, they don't have the right to vote, they have the right to donate to political parties large amounts $, which essentially means they can buy votes from the politically naive.

 

That Republicans are mostly climate change deniers is not because voters want it that way, it is because rich people who own oil and coal companies buy them.

 

The people still have the right to vote, and can affect elections and change things, but it will take something to get the attention of voters. Perhaps climate change is starting to affect people enough to get their attention. Some poles indicate republicans may loose the house in the next election. But, I'm concerned that some issues like abortion and gay marriage that republicans claim to oppose will continue to get republicans elected, regardless of the fact that republicans have not significantly changed the abortion laws since Roe v. Wade in 1973.

 

 

On the other hand:

 

So, why is abortion a more important issue? (rhetorical)

 

Many voters do not keep up with issues as conditions change, and continue to vote as they always have. Others, don't care what the facts are, because they vote according to some moral or other personal reason. If corporate power is to be reduced, there must be some really attention grabbing reason, and I haven't seen evidence the public is paying attention yet.

 

Republicans only win elections because of gerrymandering. The only demographic Republicans have won in the last several national elections is white males. The majority of Latinos, Asians, Blacks, and women all vote democrat. Republicans maintain influence through gerrymandering of congressional districts and the federalist society's manipulation of our courts. It also helps that the united states has an antiquated way of appointing representation. No reason why states like Idaho, Utah, Wyoming, Montana, Nebraska, and etc with their low populations have the same voice in the Senate as large densely populated states like California, New York, Texas, Illinois, Florida, and etc.

@ the OP I am of a couple different minds. While I absolutely believe they is a role for the Government to set a minium wage, safety standards, paid overtime standards, holidays, vacation time, medical, and so on I also feel we the people have ignored our responsibility. For example we all know Walmart is bad. Walmart is the countries largest employer, the owners are billionaires, and many of the products come from overseas where Walmart is expoiling the system. Walmarts are terrible for communities. They move in and monopolize business. They crush local business and often demand tax breaks and free permits for the privilege. Yet, millions still CHOOSE to shop at Walmart. As consumers we the people enable Walmart. No one is forcing our hands. We could just not shop there. I personally have not set foot inside a Walmart in about 7-8 years.

Same goes for any number of businesses. As a matter of principle when my wife and I eat out we avoid chain or franchise eateries. We eat at locally owned places. As consumers we can effect change. For examplev if everyone in the market for a new car focus on fuel efficiency auto companies would build more fuel efficient cars. Instead we are a nation where people CHOOSE to drive big 4 wheel drive trucks, shop at Walmart, dine out at Applebee's, and feed our children Burger King.

[iNow]

Would it be all that difficult to start demanding, as consumers/voters/taxpayers, that the corporations we deal with stop skimming so much happiness from our pursuit?

I'm of a mixed mind on this. Let's assume for a moment we do exactly that. Will not that corporation merely be replaced by one similar on the other side of the planet who is willing to make the same product or offer the same service absent those demands?

 

In your pursuit to make the corporation more ethical and more fulfilling of its moral obligations to employees, I suspect we might see the unintended consequence of that corporation instead choosing to flee to a less burdensome region to transact their business, for those that choose not to do this will rapidly be surpassed by those that do.

 

The evolutionary arms race in corporate life, especially among multi-nationals, is fierce. The difference of a few pennies can be enough to make one company fail and have to layoff 50,000 workers and another succeed and be able to hire that same amount, especially since workers tend to represent 80-90% of a company's cost outlays.

 

There are clear examples of excess and corporations with large enough cash stores to suggest its appropriate they provide their staff with wage increases, but I suspect that's not the norm. My sense is that most companies are doing anything possible to survive and spend the bulk of their time fighting over tiny morsels or scraps just so they can make it through to the next day to begin the same process over again. We just don't hear about these in the media because they're less sensational and don't provoke outrage, and we instead base our thoughts about these topics on unrepresentative samples and skewed populations... On the banks and the Halliburtons instead of the Starbucks and the Zappos... The Exxons and the Walmarts instead of the CostCos and Netflixes.

 

With that said, the decoupling of productivity and wages is indeed both real and troubling, and so too is the widening inequality between the privileged few and the burdened many. From a humanistic and idealistic standpoint, I concur that something must be done. Better regulations and guardrails are clearly needed to ensure the holistic health of the system, the economy, and our society, but won't the implementation of such measures be inherently limited, entirely too local and not capable of achieving the intended objective? Like water flowing across a landscape, won't profits and growth simply follow the path of least resistance and flow most prominently where such obstacles are absent? Wouldn't the implementation of corrections here at home just displace the work and send it elsewhere? Wouldn't preventing this flow of jobs to other locales be rightly admonished for skimming the aforementioned pursuit of happiness among our fellow humans in other nations? These are difficult questions without easy answers.

 

I also suspect there's something to be said here about the supply of labor and how better education and access globally mean the price point for some skills has come down dramatically here at home. It makes no sense to pay a worker here in the US $70,000 when I could pay a worker with exactly the same output and quality in SE Asia or China or India $7,000, especially when $7k is considered higher than their median local wage and a tremendous opportunity for members of that far off community. Supply of labor has increased with globalization and consequently wages for those same skills have come down here. Our workers are being out-competed in the market, our wages are being anchored to lower levels, and all of this is happening despite an increasing cost of living and rampant differentiation of opportunity.

 

I don't know the solution, but the issue is clearly complex and multi-faceted and makes for very thought provoking discussion. Thanks for raising it.

[Ten oz]

@ iNow, +1 good post. In my opinion one critical component is that we can't rely on private industry alone. Their motives are profit driven with the good of the populous not being a true goal. The government has a role. There are markets where private industry doesn't act because the scale is too large and or the reward to little. The Government, who does care about the populous, should fill in those markets. If the U.S. government built highspeed rail throughout the states it would create an enormous amount of jobs and continue to employ people long after it was completed. It would also be a benifit to industry as they could transport product much faster. No private company has the money of incentive to build a national highspeed rail line from LA to New york. So the government would be creating and managing its own market. Another example of something would be solar roadways: http://www.solarroadways.com/intro.shtml

Again it would employ an enormous amount of people, private industry would benefit sense they also heavily use public roadways, and there is no incentive for private industry to do this.

 

In the states we use to understand this. We build highways and bridges, started the post office, put satellites is orbit, and supplemented airports, stadiums, monuments, railways, and so on. The recent attitude that everything private is better than everything the government does is bad for both the average person and for business. Government stepping in and managing markets private industry can not or will not is important to ensuring a healthy middleclass.

[Sensei]

The last thirty years or so have seen the rise of corporate efficiency expertise. Wealthy firms that need to get even wealthier hired the best penny-pinchers around, and incrementally over the last few decades, the practices they've instituted have grown profits to record levels.

 

But after these financial wizards removed the low-hanging fruit, they turned their sights on other ways to save. They started paying less and made it clear that the workers were lucky to have a job. Over time, we've seen a good deal of money that should have gone to the middle class get reallocated to the execs and shareholders, where tax loopholes and the best attorneys decrease the amount of revenue the government can claim.

 

They discovered they could make an even bigger profit by writing their own legislation and lobbying it through Congress. They lobby for subsidies, no-bid contracts, and other sweetheart deals that corrupt the spirit of a free market. They get to de-regulate themselves and loosen restrictions even more. Now the financial guys are trying to move headquarters to more tax favorable havens so they can make even more money at the expense of taxpayers they still want as customers.

 

I don't think it's a matter of evil corporations, I think it's a matter of smart people taking advantage of ambivalent voters and a poorly monitored system. But how long can we continue to let these mega-corporations suck the life out of our tax revenue and our purchasing power while still enjoying access to our country's infrastructure and all the benefits that entails? At a certain point, don't you think corporations owe their country's more than just job-making? Shouldn't there be a certain allegiance to the country who holds your corporate charter?

 

Greed. One of the worst est sins.

 

Because of greed people kill others to get their worthless wallet with a few bucks..

 

"Financial wizards" destroy people with white gloves. f.e. buying companies near bankruptcy (or perfectly stable! but below price of their assets), and instead of doing everything the best to resurrected company, firing majority of crew, and selling the rest of equipment. That's how "joining" with other company looks like in many examples. By basically wiping it out.

 

Autodesk behave like that. Bought half of world's 3d application making companies (competitors!), sucked their technology, fired crew and shut them down.

Now it's doing so with XSI/Softimage

https://www.facebook.com/AutodeskSoftimage/posts/10151924084585877

(see also comments from users on the bottom)

 

To make stock holders happy now on you won't be buying software, you will be lending it for a year, month or week! Then it'll be stopping working, and you will have to pay again, and next year again, and again. Otherwise it'll be not working anymore. Instead of having software for many years/forever, customers will pay hundred times more to be able to even use it.

That's why every major software company is pushing more and more on moving on to cloud - software won't be even on your own disk!

Edited August 30, 2014 by Sensei

[Phi for All]

Perhaps the most worrying aspect of the thread title is the

 

ISDS section of the proposed TTIP trade deal that allows corporations (that don't pay any tax) to sue a country for loss of income as well.

 

http://en.wikipedia.org/wiki/Transatlantic_Trade_and_Investment_Partnership

 

It's so convenient when you get to reap full benefits without investing full responsibility! People don't have those rights, and corporations didn't used to either. But a CorporationPerson gets the power without the transparency.

With that said, the decoupling of productivity and wages is indeed both real and troubling, and so too is the widening inequality between the privileged few and the burdened many. From a humanistic and idealistic standpoint, I concur that something must be done. Better regulations and guardrails are clearly needed to ensure the holistic health of the system, the economy, and our society, but won't the implementation of such measures be inherently limited, entirely too local and not capable of achieving the intended objective? Like water flowing across a landscape, won't profits and growth simply follow the path of least resistance and flow most prominently where such obstacles are absent? Wouldn't the implementation of corrections here at home just displace the work and send it elsewhere? Wouldn't preventing this flow of jobs to other locales be rightly admonished for skimming the aforementioned pursuit of happiness among our fellow humans in other nations? These are difficult questions without easy answers.

 

Great overall post, iNow, and let me focus on this bit. Do you think there's a way to reverse the process of economic inequality without it taking forty years to fix? I doubt the top 1% will be happy with any kind of major shift, and it probably wouldn't be good globally to shake things up too much all at once.

 

A frog, at every economic level, will hop out of the pot if you put him in while the water's boiling. But do we have time to start cold and change graduallly?

[iNow]

Do you think there's a way to reverse the process of economic inequality without it taking forty years to fix? I doubt the top 1% will be happy with any kind of major shift, and it probably wouldn't be good globally to shake things up too much all at once.

There's more to it than this, but it could happen quite rapidly and without much interuption if only the powers that be would realize/acknowledge/evangelize that taxes on corporations and on the wealthy need to return to their historical averages and away from their current historical lows and that those new resulting revenues need to be reinvested into our infrastructure, health, education, and poverty remediation programs.

 

The core limiting factor here IMO is that those with the power to make or influence these changes have a strong vested interest in completely preventing and obstructing them.

 

 

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

[EdEarl]

There's more to it than this, but it could happen quite rapidly and without much interuption if only the powers that be would realize/acknowledge/evangelize that taxes on corporations and on the wealthy need to return to their historical averages and away from their current historical lows and that those new resulting revenues need to be reinvested into our infrastructure, health, education, and poverty remediation programs.

 

The core limiting factor here IMO is that those with the power to make or influence these changes have a strong vested interest in completely preventing and obstructing them.

 

 

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

True, they do have a vested interest in promoting power and wealth redistribution, but history is rife with examples of violent redistribution. The Buddha gave up his wealth and power; do you know of any other voluntary examples of wealth and power redistribution other than Gates and Buffet?

 

Edited August 30, 2014 by EdEarl

[studiot]

 

do you know of any other voluntary examples of wealth and power redistribution other than Gates and Buffet?

 

 

That's a bit narrow don't you think?

 

What about ancient France and St Francis of Assis?

 

or talking of France what about the relationship in philanthropy between ancient Rome and modern France

 

http://www.theguardian.com/culture-network/culture-professionals-blog/2012/jul/24/arts-philanthropy-france-le-mecenat

Edited August 30, 2014 by studiot

[John Cuthber]

I think figures 9 and 10 here are instructive.

http://www2.ucsc.edu/whorulesamerica/power/wealth.html

 

It's not "corporations" going to far, it's greedy bastards going too far.

Bosses are being paid several hundred times the average pay.

Is it credible that you couldn't replace the CEO of most companies by a panel of a dozen or so of the middle ranking employees, just as effectively, and much more cheaply?

 

If you could do that (and I think you almost always could) then to maximise corporate efficiency, you should do it.

They don't- so it's not "Corporate efficiency" or "shareholder return" that's driving this; it's greedy bosses.

[studiot]

Of course greedy corporations (or their bosses I don't know which) don't need new legislation to perpetrate dirty tricks.

 

For example the Dabigatran scandal and recent $360 million 'settlement'

 

BMJ 26th July 2014 p15- 24

[EdEarl]

 

That's a bit narrow don't you think?

 

Why I asked for additional examples.