Should corporate profits be divided equally among the workers.?

Question

It will obviously never happen in our lifetime because the corporate bosses have such power and political persuasion, all I ask is, IS IT FAIR to divide the profits amongst the people who created that wealth in the first place?

Answer 1

No. Because then no one would ever invest in and/or create companies to do the work if their investment is never going to give them profits back.

Answer 2

The first few answer are obviously correct unless profits are returned to investors then there would be not corporation to generate profit or pay wages.

How far do you want to go dividing stuff up. Should the greeter who works 20 hrs per week get the same as the stock boy that works 40 hrs per week or the sales clerk that works 48 or the manager that works 60 hrs. Should the person responsible for directing the activities of 50 other people get the same as a person who just does what they are told.

Answer 3

Only if the people who created the wealth have a share in the company that made the profits. If you are on wages - that's what you work for. But if your company offers you shares you have choices to buy them and reap the benefits (or not).

There was a small company in Australia (probably not a good example) which was having difficulties. The employees came to the rescue and put money into the company and became part owners of the company, thereby creating a situation where whatever that company made - they made and divided profits equally, and it created a good incentive to make the business work. But that is not common practice but is possible.

Fairness - does that come into your question - it does depend how the company is structured and what your link to that company is as to whether you benefit from it's profits.

Answer 4

From planet YouDopea...

I think your proposal has 2 aspects:
1 Distribution of profits to workers,
2 Equality of Distribution among workers

Profit sharing or variable bonuses based on company performance have been happening. Some companies are part-owned by the employees.

These are 2 ways that SOME corporate profits go back to workers. However, many of these organisations also have share options for top management, and therefore MORE benefits go to top management and less to rank and file workers.

I guess that wages and salaries are supposed to be a reflection of how much we contribute to the organisation, therefore, and equal distribution of a share of profits to all workers has the advantages of:
i treating all workers equally with its benefits on morale
ii acting as a stabiliser since workers would count this profit as part of their earnings, but these decline if the organisation isn't doing very well.

However, as many people have pointed out, workers are not the only ones who produced the wealth; owners and shareholders also contributed their funds to get the equipment and other paraphernalia to enable workers, so they should get their share of the profits too. Although as machines depreciate and are written off, the returns to capital should decrease accordingly. (Else it owuld be like a worker being paid even after he/she left the organisation...)

In colclusion, I would say yes, it is fair to divide profits equally among the workers, but with a few caveats:
1 Wages must reflect relative contribution of workers to organisation
2 Shareholders/Owners msu t also get their share, although it should take depreciation into account
3 The exact distribution of capital/labour depends on the actual performance of the factors of production in the organisation.

Answer 5

no. economic principle rewards risk. the entrepreneur who invested the money and took the risk deserves all the profits. all the employee deserves is a fair days pay for a fair days work. i could write an essay on this, but i just cant be bothered

Answer 6

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Answer 7

No ,the workers should get a share,but don't forget the people who took the risk of investing ,including pension funds.

Answer 8

No.
Most of the time, they didn't think of the ideas required to make the profits - they are doing what they are told to do, nothing more nothing less.
Not everyone does their job equally well, why should everyone get paid the same? There is a need for motivation, and the motivation is that if they do better and do more, they will get better positions. Those who are doing more move up in ranks and get paid more accordingly.

Answer 9

No, an economist argues such as fairness and efficiency are logically separable.

Answer 10

Why don't you start a business and share all your profits with your employees then. IF that was law, what would be the incentive in starting a business?