Profit sharing

[Lynx]

If the law stated that all profits by a business had to be shared equally between its employees, what effect would this have?

Edit: Wages would be entirely profit-based by default

[Winter]

If the law stated that all profits by a business had to be shared equally between its employees, what effect would this have?

Edit: Wages would be entirely profit-based by default

You would no longer have the super rich. Instead, more people would be placed in the middle class. Poverty would lessen, that's for sure. But of course if this were to happen, chances are "the invisible hand" will raise prices on everything anyway, so one must wonder if any real change would take place. :glare: This is why revolution is neccesary. We must smash that invisible hand once and for all! :hammersickle:

[bobroberts]

Sounds like it would be a worker co-op. Having it be purely profit driven might be a bad idea, although without wages the profits would be huge. It would be best to have a base wage, and then have the profits divided up equally on top of that.

I work for a shitty chain restaruant, and I get to see their profit margins. They generally make $1000-$4000 in profit above labor costs. Let's say it is an average day, where they take in $3000 in business. 20% of that would be labor cost, let's assume another 20% would be the costs of materials, energy, rent, taxes, whatever. That leaves you with approximately $1,800 dollars a day to split up between a dozen or so workers, which would mean everyone would leave with nearly $150 dollars on top of their hourly wage. It might be half that if expenses are higher than I estimated, but it would still be a good deal of money. In the current setup all that money is sent to people above you, and you might get a fifty cent raise every year for helping to keep that kind of profit margin up. Pretty amazing racket.

[jake williams]

Sounds like it would be a worker co-op. Having it be purely profit driven might be a bad idea, although without wages the profits would be huge. It would be best to have a base wage, and then have the profits divided up equally on top of that.

I work for a shitty chain restaruant, and I get to see their profit margins. They generally make $1000-$4000 in profit above labor costs. Let's say it is an average day, where they take in $3000 in business. 20% of that would be labor cost, let's assume another 20% would be the costs of materials, energy, rent, taxes, whatever. That leaves you with approximately $1,800 dollars a day to split up between a dozen or so workers, which would mean everyone would leave with nearly $150 dollars on top of their hourly wage. It might be half that if expenses are higher than I estimated, but it would still be a good deal of money. In the current setup all that money is sent to people above you, and you might get a fifty cent raise every year for helping to keep that kind of profit margin up. Pretty amazing racket.
What about franchising costs? Marketing? These things might be ridiculous but it's worth considering their impact - it's not quite like the owner of the restaurant or the chain is just taking a couple thou a day and spending it on hookers and coke.

[Q]

Simply redistributing the wealth is not solving anything. The economy would still be in private hands, so you would always get attacks from the bourgeoisie that sees its interests threatened. Besides, you cannot plan the economy in this way, you cannot raise the production level to that above capitalism. So you don't solve any of the societal problems of capitalism, you just redistribute the shortages.

Besides, this kind of profit sharing would require immense class struggle, so the question is: why not go all the way and end capitalism?

[bobroberts]

What about franchising costs? Marketing? These things might be ridiculous but it's worth considering their impact - it's not quite like the owner of the restaurant or the chain is just taking a couple thou a day and spending it on hookers and coke.

Yeah, it goes to the franchise, and all that entails. The store is basically paying for the brand-name, advertising, their supply network, and specialized equipment designed to make the food idiot-proof. That's the racket. The food quality is generally horrible, with all sorts of strange additives to make them tastier and hide the quality issues. The advertising and brand name is to convince people the food is great when it's really quite awful. The idiot-proof food is only designed that way so they can fire and hire people on a whim without properly training anybody. Any profits above and beyond that go to the shareholders, basically siphoned out of the community.

I think it would be possible to cut out all that crap, go through local suppliers for your ingredients (maybe like Local Burger (http://www.localburger.com/)), and spend a fraction of what's taken on advertising to target the local community. Even if that doubled the cost of supplies, the food quality would drastically improve and the workers would end up with more money than they have now. You could probably even serve free food all day once a month as part of a promotion and still spend less than what the franchise costs the store on any given day.

Anyway, it's just my perception of things. Maybe doing that wouldn't work out or be doomed to failure, but there is a franchise like the one I work for in every community in the US. If a type of worker-owned business model took hold and replaced even a fraction of them, it could be a powerful force for social change and introduce a lot of people to an alternative they didn't know existed.

[jake williams]

It's conceivable that as petroleum prices explode and transportation of almost anything becomes economically impossible you'll start to see that sort of localism.

[bobroberts]

It's conceivable that as petroleum prices explode and transportation of almost anything becomes economically impossible you'll start to see that sort of localism.

It's kind of like what is happening in Cuba with the organiponico's (http://havanajournal.com/business/entry/organiponico_agriculture_in_havana_city_cuba/). There is a documentary on them called "Cuba: The accidental revolution", which is on google video.