Does the trickle down theory actually work?

[RickJay]

@Cat_Whisperer

That sounds a lot like a contradiction. Is this what you meant to say?

(That some corporations do not have shareholders.) Yes, that’s precisely what I meant to say. Take, for example, the Canadian Standards Association. Big corporation, no shareholders.

It is our experience that the employee-owned company is making the decision to pay large dividends to its shareholders (the employees). Another company deciding to re-invest all its profits is not what we’re talking about here.

As MOIDALIZE and gonzomax noted, the employee-owned business model that we’re experiencing does just what it should; the people at every level of this very large company take their dividend cheques and basically spend them; house renovations, new cars, vacations, dinners out, re-invest in more shares, etc.

So what do you think happens in other companies? The money doesn’t vanish. If it’s handed out to shareholders in the form of dividends, then those shareholders spend the money in their communities. If it’s reinvested in the company then the money must be spent on something, and the companies that sell those things make money, the money is paid out to their employees and shareholders, and so on.

You seem to be drawing a distinction between the dividends you, Shareholder A, are getting, and the dividends that Other People, e.g. Shareholder B, are getting. But to me, Citizen C, or society as a whole, it makes no difference. That in your case Shareholder A also happens to be an employee strikes me as being of no relevance at all to society as a whole. If I were to purchase Bank of Montreal stocks, I’d be paid dividends most years. If I then take a job with Bank of Montreal, do I magically transform from a greedy capitalist into a noble worker?

I would be interested in someone who is financially savvy explaining to me why this business model couldn’t be adopted by more corporations.

Thousands of corporations are run this way. I couldn’t even begin to list them all. (Dread Pirate Jimbo, I did not mean to imply you worked for a small company.) There are countless employee-owned corporations out there. You’ve also got collectives, like Home Hardware, whose corporate assets are collectively owned and operated by the constitutent store owners. Every conceivable way of creating and running a corporation is being tried somewhere.

Interestingly, there’s little evidence that employee-owned companies are run any better than other types of companies. They face precisely the same challenges.

It sounds very contrary to the way business is usually done (a few bigwigs get huge salaries, shareholders may get nice slices of the pie, but the average secretary makes a wage and maybe a token bonus); it’s actually a pretty sad commentary on the way we’ve all been trained that we expect someone else to take the fruits of our labour.

Well, first of all, that is not the way business is usually done. Most businesses make no, or very little, profit. In competitive markets, the average profit is very close to nothing, and in natural monopolies profits are usually capped by regulation. Most businesses pay no dividends to the shareholders. Most businesses do not have zillion-dollar CEOs. You’re creating a straw man image of how most business operates.

Secondly, the reason people get paid the wages they do is that that’s what their labour is worth.

[gonzomax]

So Bank of Americas boss is about to get a 100 million dollar bonus. That is what his labor is worth as long as he is charge of the evaluation system. The banksters have fleeced us and they are laughing as they gobble up the tax money. The profits the banks mare making is roughly equivalent to the amount of bailout money they wrested from us. They are getting the money from the Federal reserve for practically nothing. Your grandmother could make money with that deal. If they charged 2 percent they would make money. They are hitting credit card users for near 30. They are charging enormous rates for overdrafts and late charges. They are exploiting the poor.

[gaffa]

@Blalron

But one thing I won’t do is get rid of my cell phone.

The initial purchase price of my cell phone was $20. I pay 25 cents a minute. I keep it around for only two reasons: 1. Potential employers calling. 2. Emergencies. I don’t use it for chatting with friends about crap.

Even if I were homeless, I’d still keep it around. How the hell else is an employer supposed to contact me?

Some sort of telephone is essential for employment, and access to the Internet is now pretty much the same.

Even fast food jobs are moving to Net-only applications. The Burger King near me has a “Take-A-Number” style device that dispenses a paper tag with a URL and a number to enter at that URL. If you don’t have at least some Net access and the computer savvy to fill out forms, they have no use for you.