(05-20-2016 11:17 AM)JCGSU Wrote: How are US based corporations going to compete with foreign corporations where they pay crap? If the corporations labor cost is double or triple the cost of a foreign one it will not survive on a small % of good ole Mericans buying Merica only products. This is why you are seeing large plants moving away from big unionized cities and being built in BFE Alabama or over seas partly do to insane union wages and benefits. Yes they are greedy scum bags at the top but they also have to survive as a business and please stock holders. We all want to demonize corporations but where is most of your 401K? Hmmm people don't complain when they see double digit returns on their retirement accounts. Playing devils advocate a little but extreme one sided comments on either side of an issues gets on my nerves the truth is always in the middle.
There ain't black white yes no answer in there.
We do have a problem because companies in the US are incentivized to think in terms of quarterly and annual reports and are competing against companies in Germany and Japan where they will shake off a bad quarter or bad year without panicked layoffs to preserve stock price as long as they believe they are trending correctly for the 5 and 10 year goals.
That's a dysfunction of our markets rather than our corporations but we can alter the tax code and estate code to make short-term holding of securities more painful than long-term.
We have a system of forced overhead. You have a big company then you have to spend money on health insurance for employees, hire people to select it, explain it and interact with it. Then you also have to pay workers compensation insurance premiums and those benefits include lost wages, defined benefit for dying or losing a limb AND medical expenses. We compete against companies we don't worry about employee health insurance because the employee pays a payroll tax to fund his/her health insurance and if the employee gets hurt on the job the medical coverage provided out of that payroll tax covers the medical needs, the worker's comp coverage is just insurance for lost wages, and defined benefits for death or loss of a limb, the worker's comp company doesn't have to pay the for the back surgery, MRI, physical therapy and pain meds.
We have declared corporations are citizens, well ugly fact is they ain't and we don't treat them like people when taxing them. Apple can get a tax incentive to hold billions in Ireland and escape the IRS when Ireland imposes a 0% tax on it for so many years. You cannot. If you take a job in Ireland and earn $100,000 you owe Uncle taxes on $100,000 minus the taxes paid to Ireland.
Unions? We compete all the time against labor that is more unionized than the US. Tennessee politicians begged VW employees to not unionize declaring it would result in the plant being moved, VW pretty much called those claims BS and said they supported the plant unionizing, of course they do, the union in Germany by law is guaranteed seats on the Board of Directors and the direct interaction of labor and management means they don't get many strikes as the union sees the books in details, knows what the long term plans are, they are like partners.
So we encourage short-term thinking, we increase overhead, and we create tax loopholes that reward holding cash outside the US. Great system.