My boss just told us all how this will “remove our lunch and break times and take away all holidays” trying to scare us. Leeches, all of them.
Great idea, love it as a former factory worker myself. Hope it gets traction but let’s be real, it has a Republican Christian chance of getting into heaven to get enacted into law at least for now.
As a white collar worker, of love to see a bill that just sees white collar workers just get paid their equivalent hourly wage when we go over 40. Fucking crunch due to unrealistic manager bullshit schedules.
it has a Republican Christian chance of getting into heaven
Off topic, but, I love this as an alternative to “a snowball’s chance in hell”.
Let’s assess the effects this change could cause on real numbers.
Note: This is a duplicate of a part of a comment I’ve written here above as a response, but I don’t want it to be buried. Hope that’s fine
I’ll take Nutrien’s 2023 audited financial statement as an example. (Numbers in brackets are what’s deducted to get what’s not in brackets)
- Sales - 29056
- Freight, transportation, distribution - (974)
- Cost of goods sold - (19608)
- EBIT - 8474
- Interest - (w/e)
- EBT - 1952
- Taxes - (670)
- Net earning - 1282
Out of cost of goods sold (2858) is cost of labour, let’s also add (626) from general administrative expenses, and just say it’s all wages.
- Effective tax rate - 670/1952*100% = 34,3% (wow, that’s a lot for where I live, also ignoring mining tax for simplicity)
Let’s see what happens to our efficiency if the changes take effect.
All of costs can be divided into Fixed and Variable ones. Labour, in this case, is Variable because we can manipulate it by employing more staff to compensate for reduction in working hours and keep the sales at the same rate. (Contract workers are usually Fixed Cost, but it’s all relative, as no Fixed Cost is ever truly fixed.)
Going from 40 => 32, we have a 20% reduction in working hours. Mind you, this doesn’t mean there will be a 20% hit to productivity. It may be more, it may be less (most likely less), for simplicity let’s say it’s 20%. So, we need 20% more workers to compensate. (2858+626)*120%=4180.8
- New EBT = 1952 + 2858 + 626 - 4180.8 = 1255.2
- New net profit = 1255.2*(1-34.3%) = 824.7. Mind you, the effective tax rate will probably be lower if employment affects deductibles and/or grants tax privileges.
So, our net profit margin went from 1282/29056 = 4.4% to 2.8%. Looks bad at first glance, but it’s also a bad year. A year prior net profit margin was at whopping 20.3%, so a decrease from 4.4% to 2.8% would be nothing in comparison.
Will it result in increased prices? Yes, but it will also lead to economic growth, because more free time = people spend more money = companies earn more = companies grow faster, but so does inflation. If they can manage the inflation, I don’t see why this couldn’t be possible.
Reducing net profit doesn’t have any impact on pricing in capitalist markets. It’s not like capitalists have some specific profit percentage they are allowed to hit (unless they’re in a very regulated industry like grid or water supply). They want infinite returns, and they’ll increase prices as much as the market allows to generate more profits.
Capitalists don’t look at a net profit of 4.4% and say “yup that’s enough”, but if it were 2.8% they’d say “damn guess we have to increase prices for customers, I really wish we didn’t have to do this”.
They might increase prices as a retaliatory measure. The same way businesses slashed hours as a result of Obamacare. They didn’t have to, but it benefited them to, and they didn’t see a downside.
They might be able to increase prices, blame it on this law, and have people who are aligned politically with them put up with it and maybe even support their business more to “stick it to the libs”. They already do this with things like inflation, blaming it on Biden and then increasing prices far more than necessary.
Oh, yeah, absolutely. Price policy is a whole different topic. Only monopolies can afford to increase them just because they’re not meeting the expected quota.
Don’t know about “retaliatory measure”, it’s hard to imagine companies uniting like that over it. Usually, they just play by the rules, and those could be the new rules (strong emphasis on “usually”). In fact, if the management is competent, it’s likely that they have already accounted for it, just in case, after the news dropped.
They don’t all need to band together. They just need a few big ones to do it, then everyone else will just jump on the bandwagon.
I appreciate Bernie and what he stands for. But, unlike pretty much every other developed country on earth, the US, aka the no-vacation nation, doesn’t even have universally available PTO. I’d start there.
May as well start somewhere and this is somewhere.
Start as extreme as you can, because you will end up compromising and getting less than what you asked for. The only question is: where is there line beyond which you won’t even begin to get a conversation started. Wherever you decide that line is, start your demands there, because you will have to give something up.
I try to like humans, but I hate this part of humanity more than nearly anything that isn’t an atrocity. If people would enter negotiations in good faith, and not having to play shitty games like this, I would like my fellow man far better. Then again, I also hate poker and other forms of gambling, and am probably in the minority about this.
We don’t deserve Bernie 🥺
He’d frown on you for saying such a thing. We absolutely deserve him, and more.
It’s ridiculously depressing he’s still considered the crazy edge-case in the government.
Which will be struck down almost unanimously because the US government is a cesspool of liches and ghouls.
I mean, yes? That’s kind of the point. This is how we shift the conversation and put pressure on politicians. Put these bills forward and make people vote them down on the record, so those votes can be used against them.
And how’s that been working out for you guys so far?
Honestly? Pretty well, relative to the “cry about it and do nothing” strategy.
Being realistic about the situation your country is in will make it easier to create realistic solutions. Pretending this did anything other than show that the left has absolutely zero power in the states is counterproductive to improving your country.
I am being realistic. Are you? Putting forward bills and forcing the corrupt and right-wing legislators to vote against them on the record is literally one of the biggest things that leftists have been calling for, for decades, that capitalist Democratic leaders have been suppressing, because it hurts their control of the party. Not doing this is exactly what right-wing Democrats want. Doing nothing is not a realistic solution to anything.
Is that why your current “left” party, that’s in power has pumped more oil than any country to ever exist, has twice the migrants detained in cages than when trump left office, breaks strikes, and bends over backwards to supply arms to a country engaged in genocide?
I think you should be more honest about how well its working.
America doesn’t have a left party, what are you talking about? Do you think Bernie won the presidency or something?
This guy gets it.
Exactly.
I’m sure all these things you just wrote definitely have no nuance or context to them
I’m sure you’re fine with it as long as it’s slightly better than the republicans lol. This is what decades of lesser of two evils politics gets you: evil.
Well it wouldn’t make sense to be fine with the worser option would it
And I’m not fine with it, but what’s the realistic alternative?
I’m not from the US btw, I just have a morbid curiosity watching it from afar
I mean, screwing with the Overton window has worked great for Republicans. It’s absolutely fair play to use the same tactic from the other side. Frankly, it should have been done the second it became apparent that Republicans in general were trying to push the window to the right.
I don’t see how this is a victory for the Overton window. When Biden is in power screwing with it in the other direction.
It’s hard to imagine how an hourly worker is going to not loose pay; going from 40 to 32 hours.
When you’re hourly… you’re, you know, paid hourly. The pay rate stays the same and you loose hours, not pay. The effect is the same, but technicalities are then soul of the legal profession.
The article literally tells you that this was done before, to give us the 40 day standard we now have. It worked before, and the article also points out that other countries have recently reduced work weeks under 40 hours. How is it hard to imagine that something that factually has happened could happen?
Imagine I manage a business where my employees earn $1000 a week, working five 8-hour days. Suppose my profit margin per employee is 10%, resulting in a $1100 return for each one.
Now, if a new law mandates that I pay my employees $1000 for a 4-day workweek, my operation could start incurring losses. The question then arises: where would the necessary additional funds come from? Likely, I’d have to increase my prices. I’m open to considering this arrangement, but I seek clarity on the strategies to mitigate such financial gaps. Should a 4-day workweek lead to a 20% hike in prices, I’m uncertain about the benefits of this change…
I’m all for a more healthy work/life balances, but typically businesses don’t like to incur extra expenses, so I would predict if workers are present 20% less, businesses would charge 20% more to make up the gap, which means workers would end up needing to earn more money, which may lead them to work more hours, making this change pointless.
If this came with some consideration from the federal government, like “we will give a 20% tax break to businesses that do this” I would consider the idea funded and I think it may work. Otherwise, this just feels like voting our way into price increases.
I think you might be making a fundamental assumption that quality of each hour of the day is the same.
Maybe for a particular business it does not matter, they just need an employee on the clock to cover time that customers may come in, but I think many businesses have tried this out, and found that they get about as much from their employees in 32 hours as they do in 40 hours.
I think it helps to give people time to rest and deal with life so that they can be more focused and thoughtful when they are with you.
Do you think your overhead would also decrease if you only had a 4-day work week?
Look at it this way. Let’s say I run a widget factory. I have a worker, Joe, that I pay $1000/week to. Each day, Joe creates me a widget that I can sell for $220. That means at the end of the week, I have 5 widgets I can sell for $1100, yielding me $100 profit.
Now, we move to a 4 day work week. I pay Joe $1000. He creates me 4 widgets, still worth $220 each. I sell them for $880 total. I now lose $120 each week.
Under the current plan, it seems the guidance is that Joe will magically start working faster and produce more than 1 widget per day. If he does not, my other option is to increase the price of widgets or to decrease the amount of money I pay Joe.
So you won’t be able to steal as much of the value Joe creates from him and instead have to pay him a fairer share? Oh darn. You mean you won’t be able to live in luxury while others do the work for you?
Fuck off lmao
or you can go get a real job, admit that private property is theft, and let joe sell his own widgets.
I don’t have to “let” Joe sell his own widgets. He’d be free to do that regardless. I guess your guidance is that the business should just die under this new model.
my guidance is that you don’t need to be profiting off of the labor of other people.
It’s typically my experience that a great number of people are not entrepreneurial. They just want to show up to work, do their job, get paid and go home. I’m not talking about coercion of anyone to be FORCED to work for a business. I am just trying to understand how this new legislation would work. My hunch that is if this was passed, consumer prices would increase 20%. If you believe otherwise I would like to understand more.
I think if widget factories could have that tight of margins, the issues would be totally different.
No competent business owner would employ someone whose value could become non-viable with a fluctuation in fuel cost.
The average profit margin in the US is approximately 7%… a 10% margin is considered healthy. Fluctuations in fuel prices DO threaten businesses. That’s why you see fuel/transportation surcharges and price increases.
Edit: you said “but nobody’s explaining the economics to me”, here you go, here’s the basics of corporate financial management with real numbers and a tiny bit of macroeconomics at the end.
Wait, I don’t get it. You’re saying if you pay a worker 1000$ a week and get revenue of 1100$, then you have a profit margin of 10%. But that’s NOT profit margin (at least not the one one would use for analysis). Not to mention that those numbers are unrealistic because you’d be working at a loss for a very long time, almost guarantee.
You can’t just pull numbers like that and say, “unprofitable!”. Of course it isn’t. You made it that way.
Besides, you’re ignoring the rest of the expenses that often outweigh the payroll fund.
Back to what you called “profit margin,” I’d call it “Return on Payroll Fund.” It’s weird, I don’t like it, it ignores all of the other costs that go into creating a product, don’t use it. In financial management, we use RoS, which is EBIT/Revenue. That’s probably what you were thinking of. Another name for it would be “operating profit margin,” likewise net profit margin would account for ALL of the expenses and not just operating ones.
Now, let’s look at real numbers. I’ll take Nutrien’s 2023 audited financial statement as an example. (Numbers in brackets are what’s deducted to get what’s not in brackets) Sales - 29056 Freight, transportation, distribution - (974) Cost of goods sold - (19608) EBIT - 8474 EBT - 1952 Taxes - (670) Net earning - 1282
Out of cost of goods sold (2858) is cost of labour, let’s also add (626) from general administrative expenses, and just say it’s all wages.
Effective tax rate - 670/1952*100% = 34,3% (wow, that’s a lot for where I live, also ignoring mining tax for simplicity)
Let’s see what happens to our efficiency once the changes take effect.
All of costs can be divided into Fixed and Variable ones. Labour, in this case, is Variable because we can manipulate it by employing more staff to compensate for reduction in working hours and keep the sales at the same rate. (Contract workers are usually Fixed Cost, but it’s all relative, as no Fixed Cost is ever truly fixed.)
Going from 40 => 32, we have a 20% reduction in working hours. Mind you, this doesn’t mean there will be a 20% hit in productivity. It may be more, it may be less (most likely less), for simplicity let’s say it’s 20%. So, we need 20% more workers to compensate. (2858+626)*120%=4180.8
New EBT = 1952 + 2858 + 626 - 4180.8 = 1255.2 New net profit = 1255.2*(1-34.3%) = 824.7. Mind you, the effective tax rate will probably be lower if employment affects deductibles.
So, our net profit margin went from 1282/29056 = 4.4% to 2.8%. Looks bad at first glance, but it’s also a bad year. A year prior net profit margin was at whopping 20,3%, so a decrease from 4.4% to 2.8% would be nothing in comparison.
Will it result in increased prices? Yes, but it will also lead to economic growth, because more free time = people spend more money = companies earn more = companies grow faster, but so does inflation.
Will it result in increased prices? Yes
Awesome, this is the exact point I was trying to make. You can add further arguments that there will be mitigating factors to this, but my reflex was that if this legislation passes, consumers will see price increases.
The real question isn’t if it will or not, but by how much. If I were to guess, not a whole lot.
You could probably find some research done on this topic already.
Actually, you’d need to charge 25% more if you only had 80% of the work to match your current profits (considering only the time and materials for that product and ignoring all other business expenses / taxes / etc.), since 1/0.8 = 1.25. If the worker makes 1 widget a day, you need 25% extra per day to make up the lost widget and still make 5 widgets worth of profit.
ignoring all other business expenses / taxes / etc.
…what business sector are we modeling where these are as negligible as you’re treating them to make this point???
If you’re just here to correct the math then fine but at least be honest about the reality of what you’re calculating
Yes, I was just correcting the math. There are a lot of factors here and I don’t know what the actual cost-benefit analysis would be.
