Companies and paying proper wages

We tried communism. It worked so well that it managed to impoverish a country full of 20th century Germans, difficult though that might be to believe.

West Germany had a social market economy between 1945 & 1990. Its citizens were able to buy world-leading Volkswagen, Mercedes Benz, BMW, Audi & Porsche cars, all made in Germany. East Germany had communism between 1945 & 1990. Its citizens had to wait 10 years to be allocated a Trabant by their government.

Free market capitalism, free trade & competitive markets are not perfect, obviously. When left unmanaged they create levels of inequality, exploitation & environmental destruction which many find unacceptable. Which is why most countries have progressive taxation systems & enforce laws (eg minimum wage, employment protection, sick pay, maternity pay etc etc) to mitigate these things. But until we come up with a better system for allocating resources, setting prices, managing demand creating the wealth which pays for vital public services, the reality is that we are stuck with it.

There should be a wealth tax - people with far far far less are taxed more in relation to their income than the wealthy.

i thought society abolished slave labour years ago ? yes i can understand your points but why should people be paid pittance when the companies make £££ profits ?

@SoSoLong I'm aware of what the articles out there so hence my question was directed at another response taking about supply and demand...

Well, there's plenty of articles out there that explain why CEO pay has gone up so much in the past 30-40 years, and whilst it's unethical and demoralising to have such huge pay differentials, reducing CEO pay would have negligeable impact on employees' pay. If the AstraZeneca, NatWest or Ocado bosses spread their pay across their huge companies' workforce, it would add at most £10/month to everyone's wages. The exceptions are where the CEOs are majority shareholders, and they basically pay themselves whatever they fancy.

The way I see it is this

Companies are there to make a profit, it’s a business and no business would be in business if it didn’t make a profit. For lots of companies there are shareholders, who also want a profit, now some of those shareholders are individuals who use the payment of dividends as income to live on, some don’t need to and a lot of shareholders are pension companies, that then pay that pension out to pensioners, and if those pensioners didn’t get that income they would be claiming benefits in order to survive ( worse case but just look at what Trump has done to share prices) so then everybody would have to pay more tax to pay for it, so even less money to spend

yes in an ideal world companies would pay decent wages for everyone to accommodate price rises, but those prices rises are not the fault of the company, many are down to global issues that the man on the street, or the CEO of the company/business have had no hand in and can’t stop.

Should business owners and companies increase pay every time there is a price increase? Can’t you see they would go out of business eventually? And anyway would that price increase for the wages have to be passed onto the consumer at some point to allow the business to succeed? Or should they call it quits at some point and go into liquidation because they can’t afford the wages bill

At least we have a NWM, not a lot but better than it was, but it’s not as simple as increases in wages to cover cost increases. There is a much bigger picture out there and knock on impacts to everyone in some way

In the private sector it's supply and demand that drives a products price and if costs, including wages, go up the items sale price will go up and people won't buy. Businesses as requested all about the bottom line.

"In 2022, CEOs were paid 344 times as much as a typical worker in contrast to 1965 when they were paid 21 times as much as a typical worker.

What changed @AgnesX ?

Business are run by people who want to make a profit. They need to pay tax, their VAT, their national insurance, pay for the systems that run the HR side of the business and all the issues that arise from employing people.
They need to maintain the business environment and buildings, they need to invest in new equipment, training and expansion plans.
They have the stress and responsibility of all of this and much more.
If their profit is diminished by tax changes they have to amend something to make it work.

Noone ever said life was fair. The fact is in this example is that the public sector is funded by taxes, and noone ever wants to pay more tax.

In the private sector it's supply and demand that drives a product's price and if costs, including wages, go up the item's sale price will go up and people won't buy. Businesses are all about the bottom line.

Economics should be a mandatory subject at school alongside English and maths IMO.

Before the age of social media there was less of a shift to a big house, new car, holidays abroad etc being part of the basics and yet now it's something that many feel they should be entitled to have. The reality is that the basics are shelter, nourishment, warmth, health and means of communication.

SM wasn't a thing when I was a young teenager. Houses were cheaper though & we went on holiday...wages have stagnated!

I didn't say anyone should unskill.

I think that what people view as the basics are often not aligned with what the basics actually are. Before the age of social media there was less of a shift to a big house, new car, holidays abroad etc being part of the basics and yet now it's something that many feel they should be entitled to have. The reality is that the basics are shelter, nourishment, warmth, health and means of communication.

I agree that the cost of living has made things tough for many, and the cost of housing compounded by the lack of social housing especially is a huge issue. But it is also one which cannot be undone without negatively impacting millions of people so will never be undone.

And the post was about companies paying proper wages. My point was that companies pay according to what they receive and how difficult it would be to replace the role.

but it shouldent

Wages going up generally will mean product prices have to rise.

Capitalism requires consumers. Those consumers need to have enough money to buy the goods and services that capitalism is built on. It also requires a broad group of unskilled/semi-skilled people to produce the goods/services those consumers need. The consumers and the workforce are often one and the same, with the goods/services becoming more expensive the greater your salary.

If you discount the environmental impact of production of ‘stuff’ just to satisfy consumerism, capitalism seems quite sensible. But it’s actually most successful when those the bottom actually have a decent standard of living. What we’re seeing now is a return to Dickensian levels of contrast between rich and poor. We’ve a long way to go before it gets as bad as some other countries, but it’s often the degree of inequality, not inequality itself, that causes social unrest and revolution.

I see a simple solution being a mandated link between top salaries and lowest salaries in companies. Not allowing the haves to make obscene levels of profit when the workers can’t afford to feed their families.

Companies haven't invested in their workers

Housing costs have fucked things up
particularly for younger generations.

Plus we never recovered from the crash, productivity is still low. Things are not working

A basic job with basic wages used to be enough to live on. Now it is not.
The cost of living and housing has got ridiculous.
It is all very well saying that people should upskill so they can earn more, but not everyone is capable of that. Plus we need the people doing those basic jobs for society to function.

Plenty of skilled workers have seen their wages stagnate so how does that work @NoSoupForU?

Because they offer basic skills.

I don't mean that in a derogatory way, but it is the reality. If you fulfil a role that requires skill and/or experience that is elevated from something that can be done by most people with a bit of training, your salary tends to reflect that.

well they are otherwise why do ordinary average workers still get taxed etc ?

'People like you' as in people that believe in a wealth tax. I wasn't making a broader comment on your character. If you believe in a wealth tax then you think that the state is entitled to a proportion of someone's money and assets just because they are wealthy.

Lol, I wasn't agreeing with the quote. I was saying loads of people are happy to tell the poor how they should live or spend their money etc but the same people will defend the rich doing whatever they like. The rich are part of society! History teachers us if they don't act as part of society, the result ends in heads rolling.

"People like me???" 😂you are hilarious!

I find the fact that you have written this post and not noticed the obvious contradictions within it astonishing.

You have literally just proposed a wealth tax that would take away a proportion of rich people's money and assets. How does this align with the idea that people say the rich can spend their money how they like? The actual reality is that lots of people, like you, believe that rich people's money doesn't really belong to them and that you can dip into it as and when you like.