Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

[gwynedd1]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Ha, of course as soon as I post the graph of iron ore going down - today it's a huge bounce up: http://www.macrobusiness.com.au/2012...price-rockets/

Glad I don't follow these markets regularly, as my stomach would churn. I do think these two items, housing and beer, would probably be a good prediction of the overvaluation of Australia. The high end and the low end. The Economist has its Big Mac Index, maybe we should have a beer index based on one of the global brands that you can pretty much find in every country: Stella, Heineken, etc. I don't know if Australia's excess beer price is due to taxes, but beer was a bit cheaper in NZ, which pretty much throws out the "economy of scale" argument that Australia tends to use. Plus, NZ house prices are still fairly high. There is hardly any big Australian beer companies left as nearly everything is owned by Lion Nathan or SAB Miller. Anyway, I'm looking into homebrewing now as summer is coming on to save some $$$ and have some fun. The craft beer market here is growing rapidly, but pints of beer at my favorite brewpub are $9.50! Even the more commercial beers tend to run about $7-8 a pint. So, compared to the last time I was back in the US a few months ago, I think the beer price ratio is probably about 2.5:1 to the US? Let me know what you find out.


This is an excellent point, touchring, even if I don't see the same level of economic growth here in Australia as well as a good chance of a house price correction, Australia does have a good social safety net in place, and after watching the health care debacle in the US, talking with friends and family, and reading some of the discussion here on the forums, living in a country with an established healthcare system is a huge benefit to society (and myself). I imagine Canada is much the same.

Our safety net is in Mexico.

http://www.nytimes.com/2012/06/28/he...pagewanted=all

We are as proud of this system as we are in importing educated workers from countries with publicly funded educations.

[ProdigyofZen]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

GRG, sure you are supposed to advance the interests of your company but NOT at the expense of everyone else including your employees. That statement alone is ludicrous.

If the world had a lot more empathy instead of raging hate we would start to understand human concepts better. Who the hell is going to work in a mine for 2 hours a day and afford to feed their family or even have a family in Aussie land? Relatively speaking it may be fine to be paid 2 bucks a day in Botswana where the living may be cheaper but not in Australia or the US.

If I ran a company I would want to pay my employees as much as possible and help them with every aspect of their life.

[ProdigyofZen]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Asians dont concern themselves with social safety nets, that is why they save so much. They know the government isnt paying for their next medical operation.

[c1ue]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

If I ran a company I would want to pay my employees as much as possible and help them with every aspect of their life.

I'd say that any company you run might have some severe challenges facing it.

Note that I did not say that it was in any way wrong for an employer to want to pay employees less (or more). Ultimately, however, there is a clear conflict between what employees want in terms of pay vs. what the employer can and/or will pay.

I personally don't enjoy negotiating pay with my employees, but then again it must be done. The reality is that I'm not getting any pay whatsoever as I attempt to start up my present company while my employees are getting far more security and pay than I am. Does this mean that when/if times turn good, that I should do a Pincus and screw all the employees? I don't believe so, and won't do it, but I can see why others do.

Nonetheless, the original point I was referring to was that there is no right answer in any employer/employee tug of war.

[ProdigyofZen]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Any company has severe challenges facing it but they won't stem from my statement above.

Some of us know how to manage situations and people but most don't. (not indicating you at all). I would never expect anything in return for helping out in their life except for respect and perhaps I won't get that from some but that is not my problem but theirs.

And there is a right answer to an employer/employee tug of war but its on a company by company or individual owner to employee basis. The way I manage John will not be the same way I manage Jill.

The problem with most companies is 1) they manage everyone the same 2) they don't manage at all.

[c1ue]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Any company has severe challenges facing it but they won't stem from my statement above.

I still disagree. Employers have to balance cash flow, profitability and reserves vs. spending - of which employee pay is a significant part.

Employees don't care about any of the above in a specific sense, though a good employee would at least be aware of these considerations.

If your company works to pay its employees the maximum possible, then the company makes the minimum profit achievable.

[ProdigyofZen]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I still disagree. Employers have to balance cash flow, profitability and reserves vs. spending - of which employee pay is a significant part.

Employees don't care about any of the above in a specific sense, though a good employee would at least be aware of these considerations.

If your company works to pay its employees the maximum possible, then the company makes the minimum profit achievable.

Correct if I work to pay my employees as much as I can than I am perfectly fine with my company making the minimum profit. This obsession with growing earnings quarter over quarter and year over year is a pitfall that can never be achieved for most of someones life span.

Obviously I would want to make more than the highest paid employee. I know I am in the minority here but there isnt much I need material wise out of life.

No one will ever be happy if they run a company and have this obsession to grow earnings every quarter. (Yes, I understand costs rise for business etc)

[jk]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

the financial institutions work on poz's model, paying huge bonuses to their employees, leaving less for their stockholders. it appears to be the industry's s.o.p.

[doom&gloom]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

the financial institutions work on poz's model, paying huge bonuses to their employees, leaving less for their stockholders. it appears to be the industry's s.o.p.

but of course! shaeholders do not really matter, they are simply there to supply the capital used in the giant ponzi trading scheme. Corporate boards are not beholden to sharehodlders, they are captive to management in most firms.

Lets look at JPM as an example. Market cap of 150.43B so outstanding shatres at $36.90 means roughly 4.076B. Dividend of $1.20/shr.

Jamie dimon will collect at least $6M for running this ponzi scheme. Directly he owns 3.2M shares, indirectly .97M shares. Options increased hisholdings by 462k shares this year alone, or almost 10%. Dividends will pay him almost $5.4M alone. For the current year, he will get almost $12M, and we have no idea what options he will be granted or what they are worth.

How much of this 12M is made from "mark to fantasy" derivatives? What kind of hedges or collars might he have on his shares in case it all goes to shit? Obviously he knows better than anyone else, but we will never know. How much of the earnings of JPM haave the taxpayers contributed via no-interest loans from the FED later reparked there for .25%? How do you even keep track of this stuff?

I am not against a guy earning $12M or more, but I have real problems with this kind of enterprise and his kind of power coupled with taxpayer subsidized earnings no less.

[mmr]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Last year Jamie pulled down $6 million in cash and $17 in deferred compensation via restricted stock units and the like.

My guess is that there are a couple of dozen others within JPM who are as or more highly compensated than Dimon.

For example, at the peak of the cycle, this was what the total compensation for the top 50 individuals at one investment bank looked like.

That being said, some parts of the business are beginning to shrink away - some of the banks that had held onto money-losing capital markets and securitization businesses in the hope that the mid-2000's bubble could be resurrected are finally giving up and shutting those businesses down. Industry compensation is generally down in the last couple of years (although revenue is also down, so shareholders aren't really benefiting), as is headcount (except in some of the compliance areas - never thought I would see an article like this: )

Banking Careers Swing Toward Compliance After Dodd-Frank

...Cliff Rossi, who left as managing director and chief risk officer for Citigroup’s Consumer Lending Group and is now executive-in-residence at the Robert H. Smith School of Business at the University of Maryland, said he sees the changes in banking affecting the courses and career choices of his students.

When he began teaching in 2009, they were clamoring to get into his course on financial engineering. Now they are filling classes in risk management and applying for regulatory jobs at banks and government agencies.

Sam Brownell, 29, is one such former student of Rossi’s. He was an equity researcher for Wunderlich Securities, a brokerage firm in Memphis, Tennessee, for eight months before he lost his job in May. He now is looking for a position in regulatory compliance, where he sees “more stable” work, he said.

“On the investment banking side, you see a lot of people that are just trying to keep their head above water,” Brownell said. “It’s not a great environment for innovation and learning and mentoring, especially someone who is young like me.”

[ProdigyofZen]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

the financial institutions work on poz's model, paying huge bonuses to their employees, leaving less for their stockholders. it appears to be the industry's s.o.p.

My comment was directed toward smaller companies and not meant to "promote" the financial institutions model.

[c1ue]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Correct if I work to pay my employees as much as I can than I am perfectly fine with my company making the minimum profit. This obsession with growing earnings quarter over quarter and year over year is a pitfall that can never be achieved for most of someones life span.

The problem with what you're saying above is that you're ignoring the cost of the capital in said company.

Having a company which makes almost no profit sounds nice, but it means in reality that the capital invested in said company has made no earnings either.

Maybe you're fine with your capital locked up in a company to be at a standstill as dollar devaluation and inflation take their bites, but few others are.

For outside investors, none.

Equally as for your pay vs. employees: what exactly is the division? Do you make $1 more or 400x more? Who determines what is fair or not? Who resolves disputes? Who can change their mind at any time for any reason?

It ain't the employees.

My own view leans toward the German model: that employees have a representative on the board who can both represent employees' interests and also communicate why they cannot always get what they want. This is what I do for my business.

[doom&gloom]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

You have your own German?