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(Slate)   Goldman Sachs: "If we pay our workers more, we'll make less money." Yes, and?   ( slate.com) divider line
    More: Stupid, Wall Street, Wall Street types, Employment, Unemployment, official jobless rate, Wall Street Journal, strong labor market, tight labor markets  
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1722 clicks; posted to Business » on 10 Jul 2018 at 5:05 PM (18 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



30 Comments     (+0 »)
 
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2018-07-10 05:30:43 PM  
I guess CEOs don't count as "workers".
 
2018-07-10 05:46:15 PM  
Sounds like my job and they cant figure out why nobody wants to work here and everyone (me too) with experience are heading for the door while they pack the place with cheap 3rd and 4th stringers that cant do the simplest of tasks.

/come of place with the phone interview call me back
 
2018-07-10 06:13:58 PM  
What about that tax cut from 35% to 21%?
 
2018-07-10 06:22:23 PM  
Example #5,746 of how American capitalism is based on the majority taking it in the shorts.
 
2018-07-10 06:32:47 PM  
Boycott goldman sachs.  Dont buy from them.
 
2018-07-10 06:50:49 PM  
Don't worry.  Trump is already working on tanking the economy.  People will be glad just to have jobs and they'll start reducing wages again.
 
2018-07-10 06:54:33 PM  
The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.
 
2018-07-10 07:08:52 PM  
Yeah, I'm sure G-S "workers" are suffering something fierce. The whole company can go fark itself.
 
2018-07-10 07:14:57 PM  

AmbassadorBooze: Boycott goldman sachs.  Dont buy from them.


That would be easier if they sold anything, you know, besides the hopes and dreams of the doors.
 
2018-07-10 07:17:26 PM  

Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.


100% true, but in order for it to come back into any given firm's pockets, with a gain or even just at par, that firm has to keep producing and competing.  So they'd rather hoard.  It's the fundamental flaw in the small-brained Randtard/libertardian system of supposedly perfect market incentives, and it will be the downfall of capitalism if unaddressed.
 
2018-07-10 07:24:05 PM  

Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.


This is true if you actually make things. If all you do is create mounds of largely useless financial instruments for mega-gazillionaires, then much less of that money you pay people will come back to you.
 
2018-07-10 07:24:08 PM  

fortheloveof: AmbassadorBooze: Boycott goldman sachs.  Dont buy from them.

That would be easier if they sold anything, you know, besides the hopes and dreams of the doors.


They have to sell something.  Or provide a service.  Just dont buy from anyone who buys from them.  Don't let goldman sachs execs buy from you.  Dont serve them food.  Turn off thier water and power service.  Shun thier children.  Dont even acknowledge they exist.

If everybody does this, they break in 3 or 4 days.
 
2018-07-10 07:26:23 PM  

fortheloveof: AmbassadorBooze: Boycott goldman sachs.  Dont buy from them.

That would be easier if they sold anything, you know, besides the hopes and dreams of the doors.


They sold bonds specifically designed to fail. And nobody got prosecuted.

As Bob Dylan sang (before he sold Cadillacs for a living),

"If my thought-dreams could be seen/They'd put my head in a guillotine...."
 
2018-07-10 07:37:20 PM  
I'd like to point out here that Goldman Sachs is more than its CEO.  It's us... we are the monster behind the curtain.

A normal middle class person (i.e. a salaried, college-educated white-collar worker) has investment in mutuals, 401Ks, IRAs, ETFs, etc.  Regular Joe-Shmoe wants an investment fund that gives great returns.  Businesses that make greater profits on a quarterly basis have give better returns (those "corporate profits" and "your dividends" are one and the same), and are more desirable for funds.  

Yeah, I'd love for workers to get paid more.  I'd love to be paid more.  I also want the greatest return on my investments.  My goals are at odds with one another.
 
2018-07-10 07:44:57 PM  
So a company that is paid to observe the market makes an observation that higher wages and lower unemployment will eat into earnings which may impact stock price.  And the children at slate freak out over it?  Modern day journalism everyone.
 
2018-07-10 07:50:09 PM  

G. Tarrant: Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.

This is true if you actually make things. If all you do is create mounds of largely useless financial instruments for mega-gazillionaires, then much less of that money you pay people will come back to you.


This is why Adam Smith said that businesses that don't produce anything physical, but just move money around, need to be taxed at a much higher rate than businesses that actually manufacture things; when he laid out the founding principles of Capitalism.
 
2018-07-10 08:26:44 PM  

G. Tarrant: Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.

This is true if you actually make things. If all you do is create mounds of largely useless financial instruments for mega-gazillionaires, then much less of that money you pay people will come back to you.


Okay, this is fair.  I had forgotten it was Goldman Sachs.  :|
 
2018-07-10 08:38:29 PM  

fortheloveof: AmbassadorBooze: Boycott goldman sachs.  Dont buy from them.

That would be easier if they sold anything, you know, besides the hopes and dreams of the doors.


They do rent governors to New Jersey from time to time.
 
2018-07-10 08:50:55 PM  
Generally speaking, an increase in direct labor costs would lead to higher prices, or cheaper products.  Profits don't take a back seat for anything.
 
2018-07-10 09:12:34 PM  

Izunbacol: A normal middle class person (i.e. a salaried, college-educated white-collar worker) has investment in mutuals, 401Ks, IRAs, ETFs, etc.


That's closer to abnormal than you think.

imagesvc.timeincapp.comView Full Size


http://time.com/money/4258451/retirem​e​nt-savings-survey/
 
2018-07-10 09:15:01 PM  

Izunbacol: I'd like to point out here that Goldman Sachs is more than its CEO.  It's us... we are the monster behind the curtain.

A normal middle class person (i.e. a salaried, college-educated white-collar worker) has investment in mutuals, 401Ks, IRAs, ETFs, etc.  Regular Joe-Shmoe wants an investment fund that gives great returns.  Businesses that make greater profits on a quarterly basis have give better returns (those "corporate profits" and "your dividends" are one and the same), and are more desirable for funds.  

Yeah, I'd love for workers to get paid more.  I'd love to be paid more.  I also want the greatest return on my investments.  My goals are at odds with one another.


Maybe stop embracing, or at least molly-coddling, the system that is literally setting your present and future selves against each other for their own reward then?
 
2018-07-10 09:17:27 PM  

Izunbacol: I'd like to point out here that Goldman Sachs is more than its CEO.  It's us... we are the monster behind the curtain.

A normal middle class person (i.e. a salaried, college-educated white-collar worker) has investment in mutuals, 401Ks, IRAs, ETFs, etc.  Regular Joe-Shmoe wants an investment fund that gives great returns.  Businesses that make greater profits on a quarterly basis have give better returns (those "corporate profits" and "your dividends" are one and the same), and are more desirable for funds.  

Yeah, I'd love for workers to get paid more.  I'd love to be paid more.  I also want the greatest return on my investments.  My goals are at odds with one another.


And I'll add one more thing.  You're concerned about how much money you'll have when you retire which is probably several years or even decades away.

There are a ton of CEOs and board of directors out there not thinking beyond the next quarter if even that long.  They're out for big money now and if the company craters after they leave they don't care.
 
2018-07-10 09:28:55 PM  

Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.


Depends on the company, but you'd think CEOs would know this. Imagine if you came in and raised revenue in your first few quarters just by throwing some pennies at the peons.
 
2018-07-10 09:54:36 PM  
Kill anyone who is a millionaire.
 
2018-07-10 11:28:32 PM  
Strange thing, as pay went up, so did spending, leading to higher profits and prices. It's as if you can't run an economy with everyone on minimum wage.
 
2018-07-11 03:08:52 AM  

OhioUGrad: Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.

Depends on the company, but you'd think CEOs would know this. Imagine if you came in and raised revenue in your first few quarters just by throwing some pennies at the peons.


But it's not really that simple. Extra income to your employees will be distributed to all of the places they spend money. So you only get your share back if every other employer also throws some extra pennies to their workers, who will direct some of that back to your company's products. And many companies have very indirect relationships with consumers, so there are even more dependencies.

They're not just dumb. It's usually not in their direct interests to pay more than they have to. It's usually in their direct interests to spend time, money, and other resources on keeping those expenses as low as possible.
 
kab
2018-07-11 04:58:45 AM  
But.... but shareholders
 
2018-07-11 05:20:22 AM  

OccamsWhiskers: OhioUGrad: Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.

Depends on the company, but you'd think CEOs would know this. Imagine if you came in and raised revenue in your first few quarters just by throwing some pennies at the peons.

But it's not really that simple. Extra income to your employees will be distributed to all of the places they spend money. So you only get your share back if every other employer also throws some extra pennies to their workers, who will direct some of that back to your company's products. And many companies have very indirect relationships with consumers, so there are even more dependencies.

They're not just dumb. It's usually not in their direct interests to pay more than they have to. It's usually in their direct interests to spend time, money, and other resources on keeping those expenses as low as possible.


Yeah, like I said it depends on the company as well. Someone like Goldman-Sachs or banks/Wall St won't see any return because their peons won't invest while someone like Walmart would see a large return since they sell everything their peons need.
 
2018-07-11 06:51:06 AM  

fusillade762: I guess CEOs don't count as "workers".

Of course they don't.

Skail: The thing is, it's not even true. If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest). That money comes back to the company via that method. Basically it's a force multiplier to your customer base.

That's not how it works.  Labor, like anything else, is subject to supply and demand.  There are suckers and schmoozers, but among those that actually do work, the best ones tend to get paid more.  And the difference between someone who knows their shiat and someone who's just there for a paycheck is literally millions of dollars in savings.  You are MUCH better off paying a solid worker triple the wage of a schlub.  And these people will buy the stuff they made, and even speak for the quality.

Most people aren't familiar with this concept, though, because it rarely happens anymore -- businesses would rather ensure that wages stagnate.  Also, the value of competence is often invisible to MBA twatwaffles because much of these savings are not confined to the employee's department.  For example, a top-notch buyer will look incompetent by modern conventions compared to a buyer that just finds the cheapest crap on the shelf, because "you had ONE JOB" and Competent Buyer is spending more money than Idiot Buyer.  You're a buyer FFS, and you can't find decent prices?!  Except Competent Buyer is saving the company a hundred times the difference in the RMA department, not to mention winning the sales guys recurring business.  But the sales guys think they're hot shiat so they claim all the credit, Competent Buyer is fired for wasting money, Idiot Buyer is brought on with sky-high enthusiasm, company goes in the red within five years, get bought out by bigger company who only succeeds because they have more weight to throw around.  Lather, rinse, puke.
These days it's quite common to see businesses set money on fire just to spite their own faces.  Companies like Goldman Sachs aren't necessarily kicking ass; the primary way they make money is by cheating.  They literally had the government take over AIG so the Treasury would back the debts owed to them.  When you've got that much power, you can afford to be stupid.
 
2018-07-11 03:27:53 PM  

Skail: The thing is, it's not even true.  If you pay the workers more, they spend the money on goods and services, throwing it back into the system (unlike the wealthy who save/invest).  That money comes back to the company via that method.  Basically it's a force multiplier to your customer base.

Sure, the money might take a little longer to get back into the CEO's pockets, but it'll still get there.  It's just taking the scenic route.


Their problem is that a non-trivial amount goes into the pockets of other rich assholes.
 
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