Share the profits! [View all]

[Uncle Joe]

(snip)

Shortly thereafter, the Bureau of Labor Statistics issued a report on profit-sharing, suggesting it as a way to reduce the “frequent and often violent disputes” between employers and workers. Profit-sharing gave workers an incentive to be more productive since the success of the company meant higher profits would be shared. It also reduced the need for layoffs during recessions because payroll costs dropped as profits did.

(snip)

But profit-sharing with employees has all but disappeared in large corporations, which since the start of the 1980s — and the advent of corporate “raiders” (now private-equity managers) — have focused on maximizing shareholder returns. Sears phased out its profit-sharing plan in the 1970s (and filed for bankruptcy protection in 2018).

Yet profit-sharing with top executives has soared — as big Wall Street banks, hedge funds, private-equity funds, and high-tech companies have doled out huge amounts of stock and stock options to their MVPs.

The result? Share prices have gone into the stratosphere while wages have barely risen. Researchers have found that increases in share prices before the late 1980s could be accounted for by overall economic growth. Since then, a large portion of the dramatic increases in share prices have come out of what used to go into wages.

(snip)

https://robertreich.substack.com/p/share-the-profits