Corporate tax cuts/breaks don't create jobs!

[Michael Hardner]

The provide labour at a cheaper rate than can be provided with in the company. What exactly is the issue? Where is it written that "benefits" are a god given right?

If that's the landscape of discussion, where is it written that people can't collude to demand more money or even to hold an employer hostage when it's too their advantage?

Would it feel better for you if pro-union types described their motivations in less altruistic colours?

We're getting kind of philosophical here, but I'm wondering how you'd feel about that - maybe it would be more honest to you?

[TimG]

And top executive pay will only go up... at additional expense of the average worker.

Executive pay is an insignificant line item on the books of most large companies. Their pay does not come at the expense of workers.

Top executives should set an example and cap their total compensation to that of the lowest end worker in the organization (50x base salary).

Which would mean companies would set up multiple tiers of organizations for different levels of employees. The only place to do anything about executive salaries is in the shareholder meetings.

Especially since there are so many hard workers near the top who want to replace them... Except for some reason supply and demand doesn't apply when you are at the top.

How many do you know could run a company with $1 billion/year in revenue? I don't know many. A lot of people that actually get the job are not competent. So I would say supply and demand is at work at the executive level too. Edited September 11, 2011 by TimG

[bush_cheney2004]

Adding to the discussion: Statscan graph of manufacturing jobs in Ontario

http://www.statcan.gc.ca/pub/75-001-x/2009102/charts-graphiques/10791/c-g000b-eng.htm

That graph dovetails nicely with peak car and light truck production for North America. Sorry, but those days are not coming back, at least not in the form of gas guzzling SUVs and trucks coming out of Ontario.

[Pliny]

Would it feel better for you if pro-union types described their motivations in less altruistic colours?

I think the vast majority of people like the "altruistic colours" of pro-Union types and would agree with them, even myself. But Union representation has dropped to seven percent from a high of about 28%.

We can say that Unions are unpoopular and people don't like them but you can't argue with the altruistic colours of Unions. The fact is that under Unions jobs disappear. Where 28% (These are American figures that I am just pulling from memory and are approximations but close enough to make the point, I think) of jobs were formerly Union and now only 7% are Union doesn't mean that what Unions say is wrong it means that union jobs disappear, leave a bad taste in people's minds and fail to "create jobs". Besides the fact their tactics can be somewhat unsavoury and thuggish (See recent Washington State Longshoreman's fiasco)you can't argue with their stated objectives. Unfortunately, the unstated objectives of Union leadership run counter to job creation. Today they protect jobs and the entitlements they have won. That means attacking other jobs (See Boeing move to South Carolina) They tend to kill jobs that are non-union and with their demands kill the very companies their workers are employed at so they kill those jobs.

It's basically not connecting that production that fulfills demand is what creates jobs and wealth.

[Argus]

Really. So governments should simply legislate public sector workers back whenever they strike? Impose contracts that bring benefits into the realm of reality? I wonder how that will go over with the unions.

It isn't high union wages which are causing spending to rise at the local level so much as city councils which have lost control of spending, which are populated by largely left of centre people with visions of helping the helpless or the environment or whatever, and more than willing to spend and legislate whatever it takes to accomplish their grand visions. In Ottawa, we had the worst council anyone could remember, with high taxes and deteriorating services. Come election time, since the mayor wasn't running, we got a new mayor who promised to reign in spending, but EVERY SINGLE COUNCILOR got re-elected, and so council got even more incompetent. The following election some of the worst bozos decided not to run again, and one ran for mayor, so we at least got a few new faces. Then the idiot voters put Jim Watson in as mayor, a retread who'd been pretty much a big nothing in McGuinty's cabinet. Think spending is gonna go down? Not a chance.

[Argus]

Adding to the discussion: Statscan graph of manufacturing jobs in Ontario

http://www.statcan.gc.ca/pub/75-001-x/2009102/charts-graphiques/10791/c-g000b-eng.htm

And I'm sure skyrocketing electricity prices are really going to help there...

[bush_cheney2004]

Where 28% (These are American figures that I am just pulling from memory and are approximations but close enough to make the point, ....

Of course....there is never a shortage of American figures to argue a Canadian point!

[Argus]

The provide labour at a cheaper rate than can be provided with in the company.

They don't provide a single, bloody thing. They create nothing. They produce nothing. They merely insert themselves between the employer and the employee and skim off a third of the latter's salary.

What exactly is the issue? Where is it written that "benefits" are a god given right? Perhaps we should be reducing what benefits are required for full time workers so companies do have an incentive to hire full time workers?

That's a typical belief which bears little resemblance to reality. Yet people continue to swallow that sort of thing without a second thought. If it were true, would employment in the United States be far higher than in, say Germany or Sweden or Switzerland or the Netherlands? They have a much higher labour cost than north America, yet their employment picture seems much rosier. Meanwhile, the cost of labour in Poland is far, far, far less than other European countries. In fact, it's about one third what it is in Canada. Yet they have higher unemployment. Portugal also has a very low labour cost compared to say Germany, or the United States, but has high unemployment. Hungary's labour costs are a quarter that of Germany of the Netherlands but they have double digit unemployment.

So it seems to me there is no proof of any direct correlation between labour costs and employment in western countries.

In other industries they would simply sue the worker for breach of contract. Having a payment negotiated that the government is willing to pay sounds like a good deal for the employee to me. The agency hires 50 people. The government figures which ones are worth hiring. Pays a fee to break the contract. Everybody is happy.

One difference is that no other industry requires some other company to pay a fee when they hire away an employee. Even if a big company puts years into nourishing the training and development of an employee that employee is still free to pick up and move elsewhere. Temp agencies put _nothing_ into training or developing employees, because they're NOT employees. They offer them absolutely no guarantee of employment at any time. And were it not for the existence of these agencies the companies would have to hire the employees directly at a higher pay rate for the latter. These agencies are leaches, and perform much the same type of work as pimps.

[TimG]

They don't provide a single, bloody thing. They create nothing. They produce nothing. They merely insert themselves between the employer and the employee and skim off a third of the latter's salary.

You missed the part about providing workers for less. I would love to have a system where these agencies do not exist but they are not going to dissappear as long as the system makes it so bloody expensive to hire full time staff.

If it were true, would employment in the United States be far higher than in, say Germany or Sweden or Switzerland or the Netherlands?

Well, when it comes to Germany their unemployement was north of 10% the entire 2000s. It only started to come down in 2007-2008. I would be interested to find out what happened. I am fairly certain it was not more restrictive employment laws.

In the the Netherlands, it appears their unemployment is low because the Dutch like part time work!!! This is partially because the changed their system eliminate the bias that makes part time workers cheaper and partially because Dutch want this kind of flexibility.

In Switzerland, companies reducing working hours instead of laying people off - something that is difficult to do in our culture. There is also no minimum wage in Switzerland (if there ever was an argument for getting rid of minimum wages - Switzerland might be it).

In short, your examples seem to re-enforce my point that the problems are the laws and regulations that make full time work much more expensive create the demand for temp agencies. Eliminate those distinctions and make it cheaper for employers to cut hours instead of employees and you would see those agencies disappear.

One difference is that no other industry requires some other company to pay a fee when they hire away an employee.

No. In most cases it is explicitly forbidden and the employee and employer can be sued by the contracting firm. Paying a fee is actually a good deal compared to the normal pratice. Edited September 12, 2011 by TimG

[fellowtraveller]

Gas is already between $8-9/gallon in most of Europe. The clock is not rolling back there. You also have to seperate the $US price from the world price. If the $US collapses the a high $US price oil will have little effect on the world. Lastly, international trade ran on coal in the past it will run on coal in the future if oil becomes too pricey.

That said, I agree 100% with your "service based economy...myth/lie/fraud" comment. We need to build stuff to have a self-sustaining economy. But protectionism will only make things worse. What needs to happen is wage levels need to come down in all sectors of society to the point where industries can compete. i.e. the cost of living here must be reduced. An engineer can get paid $8/hour in China and be fairly confortable. We need to reduce the cost of living here so most people can live comfortably on less money.

I'm not so sure that the clock is not rolling back in Europe.

The EU was in part created and expanded to create captive markets for high tech goods manufactured by more developed member nations. In return , those less developed nations received the fat social contract they desired as EU members.

To maintain that tremendously expensive social contract will take closing the borders further, much further to trade outside Europe. I think we are going to see that increasingly and soon, their options are limited. But first, the real deadbeats like Greece must be purged.

[fellowtraveller]

The outsourcing agencies are basically pimps taking a share of those workers salaries while returning nothing. Sun Life, as an example, used to have data entry people who earned $12hr plus benefits to input claims. Along came a company called Business Data Services which told Sun Life they could take over inputting that data and do it for $11 hr and no benefits. This saved Sun Life a considerable amount of money since they no longer had to pay for office space or benefits, and they gladly agreed. Business Data Services then set up sweatshop data entry offices with employees crowded together earning $8.50 an hour and no benefits. Sun Life profited. The weasels who owned BDS profited. The mass of employees got screwed.

Transalation: work that has a market value of $8.50 per hour got performed for $8.50 per hour.

The govt of Alberta used to pay thousands of staff to sell beer and wine at $22/hour plus benefits in govt owned buildings. Now it is performed by private sector cashiers and shelf-stockers for what the work is worth: minimum wage. benefit: me and every other taxpayer.

[CPCFTW]

The outsourcing agencies are basically pimps taking a share of those workers salaries while returning nothing. Sun Life, as an example, used to have data entry people who earned $12hr plus benefits to input claims. Along came a company called Business Data Services which told Sun Life they could take over inputting that data and do it for $11 hr and no benefits. This saved Sun Life a considerable amount of money since they no longer had to pay for office space or benefits, and they gladly agreed. Business Data Services then set up sweatshop data entry offices with employees crowded together earning $8.50 an hour and no benefits. Sun Life profited. The weasels who owned BDS profited. The mass of employees got screwed.

Wait those greedy workers willing to work for $8.50/hr stole the jobs of those hard working elites who had a noble right to make $11/hr while others were willing to do their jobs for cheaper? Those bastards!!!

You do realize that most Canadian investors have exposure to SLF in their RRSP, TFSA, Pension plans, or Mutual Funds? You do realize that the more profitable Sunlife is, the better these Canadian's portfolios perform? You do realize that the millions that Sunlife saved could be reinvested into creating more jobs, or paid out as dividends to these investors, or go towards reducing insurance pricing? You do realize that the temp agency also creates jobs by providing this service? You do realize these things right? I just want to make sure.

Edited September 12, 2011 by CPCFTW

[jacee]

You do realize that the millions that Sunlife saved could be ... paid out as dividends to these investors ...

It's obscene to crow about paying investors the money that companies "save" by paying people less than what they need for basic necessities of life. NO ONE in Canada can live on $8.50 an hour. That might cover rent and utilities but not food and transportation.

The business/industrial complex is busily decimating the middle class and pouring more and more money into the offshore accounts of the superrich.

When are you people going to figure out that they don't care about you either?

It's a sociopathic scam. You're next.

Edited September 12, 2011 by jacee

[CPCFTW]

It's obscene to crow about paying investors the money that companies "save" by paying people less than what they need for basic necessities of life. NO ONE in Canada can live on $8.50 an hour. That might cover rent and utilities but not food and transportation.

The business/industrial complex is busily decimating the middle class and pouring more and more money into the offshore accounts of the superrich.

When are you people going to figure out that they don't care about you either?

It's a sociopathic scam. You're next.

Who said anyone who is making that money is "living" off of it? It may be students who are paying their tuition while living at home. The companies isn't responsible for only hiring people who need the job to get by. Sunlife isn't a charity.

Data entry isn't a middle class job anymore. You could also be part of the middle class by knowing Q-Basic two decades ago. Doesn't mean anyone who knows Q-Basic should get a $11/hr job now.

If people from a lower class are willing to do your "middle-class" job for less, then it's not your noble right to keep the job. You have no right to keep the lower class down. Sorry Jacee.

Edited September 12, 2011 by CPCFTW

[jacee]

Who said anyone who is making that money is "living" off of it? It may be students who are paying their tuition while living at home. The companies isn't responsible for only hiring people who need the job to get by. Sunlife isn't a charity.

Data entry isn't a middle class job anymore. You could also be part of the middle class by knowing Q-Basic two decades ago. Doesn't mean anyone who knows Q-Basic should get a $11/hr job now.

If people from a lower class are willing to do your "middle-class" job for less, then it's not your noble right to keep the job. You have no right to keep the lower class down. Sorry Jacee.

Oh excuse me! I didn't realize you were talking only about jobs for the "lower class" (!)

But ... not even the "lower class" can live on that pay.

The only reason I mentioned "middle class" is because the superrich have already decimated lower income people, are in the final assault on the middle class, and next will be their lackeys in the upper income brackets who are not among the top 1percent of wealth holders. They want your money too. Sociopaths who prey on society are never content until they have it all.

[CPCFTW]

Oh excuse me! I didn't realize you were talking only about jobs for the "lower class" (!)

But ... not even the "lower class" can live on that pay.

The only reason I mentioned "middle class" is because the superrich have already decimated lower income people, are in the final assault on the middle class, and next will be their lackeys in the upper income brackets who are not among the top 1percent of wealth holders. They want your money too. Sociopaths who prey on society are never content until they have it all.

I think you're missing your tinfoil hat again.

I don't think you have any idea how corporations work. First of all, most of the large corps are widely held, and "the top 1%" have very little control over their management. Secondly, the managers are not sociopaths trying to steal everyone's money, they are doing their job which is to make the company as profitable as possible for investors.

Once again, companies aren't charities that hand out jobs to people for the hell of it. They exist to make a profit.

[jacee]

I think you're missing your tinfoil hat again.

I don't think you have any idea how corporations work. First of all, most of the large corps are widely held, and "the top 1%" have very little control over their management. Secondly, the managers are not sociopaths trying to steal everyone's money, they are doing their job which is to make the company as profitable as possible for investors.

Once again, companies aren't charities that hand out jobs to people for the hell of it. They exist to make a profit.

Corporate managers are not the top 1percent of wealth holders. They are the lackeys to the real holders of an obscene and increasing portion of the wealth and most of the political power.

http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105?mobify=0

" In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty- five years ago, the corresponding figure (was) ... 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the world ... Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow."

And the situation is virtually the same in Canada.

In this situation, corporate tax cuts are just another conduit for funnelling wealth to the wealthiest.

I read that US corporations that stash their profits overseas are waiting for another tax holiday like 2004 to 'repatriate' the money at a 5percent tax rate: Low income earners pay 10percent.

Corporate tax cuts are just another scam perpetrated by the wealthiest against all of the rest of us, by virtue of their well greased access to our governments.

Edited September 12, 2011 by jacee

[CPCFTW]

Corporate managers are not the top 1percent of wealth holders. They are the lackeys to the real holders of obscene wealth and power.

Oh right... The evil bankers. My mistake. I can't keep up with the left's boogeyman of the day.

Edited September 12, 2011 by CPCFTW

[Argus]

You missed the part about providing workers for less. I would love to have a system where these agencies do not exist but they are not going to dissappear as long as the system makes it so bloody expensive to hire full time staff.

You were talking about unions, now it's the system. So is it unions who are to blame with their greedy demands for higher pay, or the system?

Well, when it comes to Germany their unemployement was north of 10% the entire 2000s. It only started to come down in 2007-2008. I would be interested to find out what happened. I am fairly certain it was not more restrictive employment laws.

In the the Netherlands, it appears their unemployment is low because the Dutch like part time work!!! This is partially because the changed their system eliminate the bias that makes part time workers cheaper and partially because Dutch want this kind of flexibility.

In Switzerland, companies reducing working hours instead of laying people off - something that is difficult to do in our culture. There is also no minimum wage in Switzerland (if there ever was an argument for getting rid of minimum wages - Switzerland might be it).

In short, your examples seem to re-enforce my point that the problems are the laws and regulations that make full time work much more expensive create the demand for temp agencies.

Well, if that's your point it's a new point. What you were complaining about was labour cost. And as I pointed out, labour costs here are cheaper than in those above countries. Further, labour costs in eastern europe are in some cases only 25% as much as in some western European countries, yet they have higher unemployment than in those high labour cost markets. So maybe we're dealing with a lot more than labour costs, eh?

No. In most cases it is explicitly forbidden and the employee and employer can be sued by the contracting firm. Paying a fee is actually a good deal compared to the normal pratice.

Uhm, no it's not normal. It's only in exceptional cases of highly skilled employees who can be shown to have proprietary knowledge, and those employees are generally highly compensated. But the temp agency employees do not fall into that category. They are usually lower skilled, low paid employees for whom the temp agencies have invested NOTHING in the way of training or development. The temp agencies are doing their best to keep them from being hired by a real employer who has been impressed with them for whatever reason, so that they, the agencies, can continue to leach away at their pay every week.

[Argus]

You do realize that most Canadian investors have exposure to SLF in their RRSP, TFSA, Pension plans, or Mutual Funds? You do realize that the more profitable Sunlife is, the better these Canadian's portfolios perform? You do realize that the millions that Sunlife saved could be reinvested into creating more jobs, or paid out as dividends to these investors, or go towards reducing insurance pricing? You do realize that the temp agency also creates jobs by providing this service? You do realize these things right? I just want to make sure.

You do realize that allowing employers to force wages and benefits ever lower will mean that eventually YOURS will be forced lower too, right? You do realize that at that point you won't be buying portfolios or RRPS or Mutual funds and will have no money to put into a TFSA, right? You do realize that a general lowering of wages in society is not going to result in a better society, or in higher employment, but in more poverty, misery and generally lower standard of living, right? I just wanted to make sure that was actually what you were hoping for.

[Argus]

If people from a lower class are willing to do your "middle-class" job for less, then it's not your noble right to keep the job. You have no right to keep the lower class down. Sorry Jacee.

You think you're helping to "NOT" keep the lower class down by pushing wages on semi-skilled jobs down to $8.50?

Has it occurred to you that this inevitably means pushing low skilled jobs down even lower?

Who's keeping the lower classes down again?

[Argus]

I think you're missing your tinfoil hat again.

I don't think you have any idea how corporations work. First of all, most of the large corps are widely held, and "the top 1%" have very little control over their management.

They just get 90% of the profits. But it's not like THAT's important, right?

[bush_cheney2004]

....And the situation is virtually the same in Canada.

"Virtually the same" means you can't find any Canadian data...again?

[TimG]

You were talking about unions, now it's the system. So is it unions who are to blame with their greedy demands for higher pay, or the system?

The system exists because of what unions have traditionally demand and unions will be the primary opponents to any change. IOW, a problem with the system is also a problem with unions.

Well, if that's your point it's a new point. What you were complaining about was labour cost.

That is not what I thought I was complaining about. I was always talking about the system that makes it so expensive to hire full time employees. I think we need a system where there is no cost difference between hiring a worker for $12/hour or hiring a temp agency for $12/hour. How we get there is a good question.

Uhm, no it's not normal. It's only in exceptional cases of highly skilled employees who can be shown to have proprietary knowledge, and those employees are generally highly compensated.

I have to take your word for this because my experience is at the upper end of the skill sets. That said, even low skill jobs have people who are better than others. As a temp contracter I would not want my customers picking off my most productive employees. So I do not see the provision as unreasonable as you do. Edited September 13, 2011 by TimG

[CPCFTW]

You do realize that allowing employers to force wages and benefits ever lower will mean that eventually YOURS will be forced lower too, right? You do realize that at that point you won't be buying portfolios or RRPS or Mutual funds and will have no money to put into a TFSA, right? You do realize that a general lowering of wages in society is not going to result in a better society, or in higher employment, but in more poverty, misery and generally lower standard of living, right? I just wanted to make sure that was actually what you were hoping for.

If someone is willing to do my job for less than me then they should be entitled to. The only reason wages are being forced lower is because globalization and free trade has corrected the enslavement of the third world. Corporations exist to make a profit, I don't know how to make it any clearer than that. You guys seem to think corporations owe you a job. They don't. They will give the job to the person willing to do it (adequately) for the least money. If they didn't do that, they wouldn't be competitive, and they wouldn't be able to secure capital for investment and growth. No one is going to invest in corporations who forego profits to hand out jobs to the "I'm entitled to my entitlements" class.

There may wind up being a lower standard of living in Canada, but hundreds of millions of Chinese are improving their standard of living. I am a patriotic Canadian but I don't believe in the enslavement of billions of third worlders to prop up the socialist ideal of everyone in the West being part of a "strong middle class". I'm sorry you approve of the enslavement of the Chinese race. I guess we'll never see eye-to-eye on this issue because I will never support slavery.