One way to achieve fairness (and motivation!) to workers is to give workers shares in the company as part of their pay packet . You don't socialise or communise the company by giving the entire company to the workers, but you make all of them - even the cleaners - very modest stockholders in the place. As minority stockholders each worker would get a modest but real dividend that theoretically gets bigger if the company as a whole is more productive and successful. These would be real shares. After a worker leaves they would be able to hold onto their share (meaning that the long term health of the company is in their best interests), or sell the shares.
I think you'd be surprised how many publicly traded companies do exactly this.
A prominent economist once made the very same argument sometime in the 80's or 90's. The executive boards enthusiastically misinterpreted his firm suggestion to mean that the executive board employees in public companies should be assigned shares in a company, thusly that theoretically well performing boards would be rewarded by the capital gains of their shares or share options.
While I'm sure a small handful of companies did what you say, most provide shares/options as part of bonus pay at nearly all levels of employment. While purely anecdotal, everyone I've ever known in my life who worked (full time) at a publicly traded company received some form of stock as part of their bonuses. I've always found it interesting just how wrong most people who don't work in large corporations are about how those corporations treat their employees.
Interestingly enough, the big businesses least likely to provide stock options to employees are not the free market ones, but the ones most burdened by labor union workforces. The unions don't want shares as compensation apparently. Not sure why exactly, but I suspect it's because they don't want their members to actually have a vested interest in the success of the company. Makes for a conflict of interest if your entire organization requires an "us vs them" mentality among the workforce. I suspect most people's perceptions of "evil big corporations" involve exactly those businesses engaged in industries with a heavy union presence, and I don't think this is accidental. I'd assume that if we asked for examples of mean companies not compensating their employees fairly, we'd get a list of car companies, oil companies, steel/mining companies, etc. Probably not a whole lot of computer companies, or software companies, or investment/banking companies, would be on that list.
Should make one wonder where the labor market problem really is.
I think a reasonable division would be 10% total of the issued shares being held by the entire workforce of that company. I realise that this system would require frequent share issues: probably once every year or two, with a public offering included to keep the balance at 10% employees-90% public shareholders. But I think the gains to productivity would be well worth the paperwork.
Yup. Again, many companies do this already. I don't know if 10% is an accurate number, but the principle is absolutely in practice in the industry. It's odd to me that so many people think it should be, but isn't. And yes, I absolutely agree that this is a great way for the workers to share in the profits of the company they work for. Also, most companies have some form of employee stock purchase plan in which they'll automatically deduct a percentage of the workers pay (chosen by the worker) and use it to buy shares in the company. Some people choose to avail themselves of this, and some don't. Also, even if your company isn't publicly traded, or has such a program in place, there is absolutely nothing at all preventing any worker from setting aside a percentage of their earnings and investing it themselves. If you do this and get used to it, you wont miss the money, and you're building your own future. But again, many people will sit there and complain about the rich investors making bank on the profits of evil business, while they get nothing, when they had every opportunity to get the exact same return on investment if they only made a choice to do so.
I guess I just don't understand why someone would rather tear down those who take risks and reap good fortune because of it instead of taking the same risk themselves. Is it jealousy? Lack of understanding of the process? I mean, if making money on investments is such an unfairly automatic thing, then why aren't they investing themselves? Why not take advantage of the same means of lifting yourself up instead of attacking others who do make that choice? Again, I honestly don't get this. Edited, Jan 25th 2013 6:13pm by gbaji