News Disney World Cast Member unions to begin week of negotiations for wage increases, healthcare costs and more

[Touchdown]

Through buying a house too big for their income that makes them “house poor” they chose not to contribute to 401ks and thus miss out on having a livable nest egg unless they then sell that house (or remortgage) to fund it, warping their view of their primary residence. It also perpetuates the Pyramid scheme.

An example of home as an investment. My good friend sold her 60 year old CT home for $900K moved to FL and bought 3 bedroom golf course condo for $400K ( all cash ) .

You’re just pointing out how our system is busted. Your friend chose to migrate from a high value property state to a lower value one in order to fund her retirement. Besides, enough people have done this lately that Florida is no longer a lower property value state, unless of course said land is on a flood plane (and sometimes not even then.)

 

[Lilofan]

You’re just pointing out how our system is busted. Your friend chose to migrate from a high value property state to a lower value one in order to fund her retirement. Besides, enough people have done this lately that Florida is no longer a lower property value state, unless of course said land is on a flood plane (and sometimes not even then.)

You just described TX. So many families from CA are moving to TX as an example , Austin TX for cheaper COL at the same time driving Austin real estate prices upward. Austin is nicknamed Austinfornians.

 

[LAKid53]

Public Corporations

Dodge v. Ford Motor Co. - Wikipedia

en.m.wikipedia.org

Been that way for over 100 years thanks to that court case.

I don't think you understand the basis fur that litigation and what the court ruling means. The jist? That a corporation operates for the benefit of shareholders, i.e., the owners, not its employees.

And a public corporation is a private company (not govt owned) publicly traded.

 

[Touchdown]

I don't think you understand the basis fur that litigation and what the court ruling means. The jist? That a corporation operates for the benefit of shareholders, i.e., the owners, not its employees.

And a public corporation is a private company (not govt owned) publicly traded.

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

 

[LAKid53]

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

I'm not confused at all. Your post states "public corporations". The ruling clarified for whom a corporation operates to benefit, not whether a corporation is "public".

 

[Lilofan]

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

That’s true a company goal is to maximize profits any way possible ( legally ) and that’s what makes our country great . It’s called capitalism.

 

[lazyboy97o]

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

It does not create that goal. There is no specification for how or what exactly is supposed to create value.

 

[Touchdown]

It does not create that goal. There is no specification for how or what exactly is supposed to create value.

The whole reason the suit happened was because Henry Ford was planning to massively increase salaries to all workers to share profits. Dodge sued Ford because they could not match this upcoming raise and was (rightly) worried they would lose a lot of employees. The suit forbade Ford from doing this. So you’re wrong

 

[lentesta]

That’s true a company goal is to maximize profits any way possible ( legally ) and that’s what makes our country great . It’s called capitalism.

The US Supreme Court has said that a corporation isn't legally required to maximize profits or even "shareholder value", in Hobby Lobby.

If profit maximization was required, corporations might (for example) stop making charitable contributions for fear of shareholder lawsuits.

Not trying to be pedantic here. But this idea that companies "have" to do certain things is so embedded into the public discourse that it masks the reality: these are choices willingly made by specific people.

 

[lentesta]

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

So ... it's the corporation's goal to pay its CEO as little as possible so that profits are increased?

I'm willing to assume what you're saying is true. If it's true, how is the "as little as possible" part determined? Because it seems like there's two things at play here:

1. The profit-making skills of a particular CEO candidate
2. The amount of money the company is willing to pay that person

So how does a company go about determining #2 given #1?

For example, Jeff Green's compensation was $834 million last year. You're saying that the company had no other choice, if it wanted to maximize profits, than to pay him $834 million? $800 million would've been worse profits? $700 million would've been a catastrophe for earnings? He wouldn't have put forth as much effort for $600 million?

Again, I'm willing to assume this is true. What I want to know is how we know it's true.

 

[Touchdown]

So ... it's the corporation's goal to pay its CEO as little as possible so that profits are increased?

I'm willing to assume what you're saying is true. If it's true, how is the "as little as possible" part determined? Because it seems like there's two things at play here:

1. The profit-making skills of a particular CEO candidate
2. The amount of money the company is willing to pay that person

So how does a company go about determining #2 given #1?

For example, Jeff Green's compensation was $834 million last year. You're saying that the company had no other choice, if it wanted to maximize profits, than to pay him $834 million? $800 million would've been worse profits? $700 million would've been a catastrophe for earnings? He wouldn't have put forth as much effort for $600 million?

Again, I'm willing to assume this is true. What I want to know is how we know it's true.

The company board determined that price, the board is elected by shareholder vote. If you are a shareholder and feel that is unfair compensation then feel free to sue the board for damages. Thats the only way this trend will reverse.

 

[Vegas Disney Fan]

My one contribution after reading through all of this is going to be on the housing part of the picture, and probably not well-received. The current view/usage of housing as an investment vehicle and store of wealth for an individual is a big part of the problem IMO. In order to start correcting the lack of housing and the NIMBYism that demands the status quo continue, housing must be viewed as a good or consumable product instead of an actual investment and/or store of wealth. A durable, long-lasting good, of course, but ultimately not that different to a car in that it's viewed as a "consumable" product with always declining value instead of something to store wealth in.

There are challenges to this beyond just how this idea is received (how do you do this while being environmentally conscious, for example), but I really believe that this is an important part of the puzzle. When it's "just a good" instead of a big part of your retirement plan/nest egg and you don't expect to recoup anywhere close to what you paid if/when you sell, suddenly that transit stop bringing "undesirables" near you is no longer as big of a deal. Your "investment" (however much you decide to make of one) is now in the people and community around you instead of the physical structures that must retain their maximum value to the detriment of others in so many ways. This has to come with zoning and other regulatory changes as well, and that starts to address some of the affordability equation on the housing side. Maybe that's the difference between a $5 increase over 5 years being enough vs. a more immediate increase over 3 years to try and keep peoples' heads above water as costs rise. But the simple fact is that the continuing sprawl throughout Central Florida is unsustainable financially, environmentally, and structurally and does no one any favors in the end once everything is considered. There must be a change in how housing is viewed, by everyone, and a change in what is built, how it's built, and who owns it.

Of course, if wages kept pace with productivity, that would be a big difference maker as well. As production and efficiency has climbed in the modern era, those gains have gone nearly exclusively straight to the top.

I’m not sure I understand this argument, rather than homes retaining value you think they should depreciate like cars and become worth less over time?

How would that help anyone?

This idea would discourage re-investing in your home and rather than having thousands of nice neighborhoods full of older homes you’d have thousands of neighborhoods full of falling apart or condemned homes, which would then need to be bulldozed and thrown in a landfill.

I’d hate for a home to be a depreciating asset like a car, you’d still have the never ending price increases (being a depreciating asset hasn’t prevented car prices from skyrocketing) and you wouldn’t have the value of your previous home to offset the increased price of the next home. You’d be stuck with ever increasing payments every time you bought a new one, just like with cars.

What you propose sounds like everyone renting a home, that sounds horrible to me.

 

[lentesta]

The company board determined that price, the board is elected by shareholder vote. If you are a shareholder and feel that is unfair compensation then feel free to sue the board for damages. Thats the only way this trend will reverse.

Yeah, I get that. You said that the company sets compensation to maximize profits. How does the board do that for the CEO so that it knows that profits are maximized? Like, what's the process, and how do we know the process works?

ETA: Not trying to be difficult here, but the idea that "boards have to get it right or shareholders will sue" seems optimistic. Just knowing what we know about regular human judgement, I'd have a hard time believing that the 500 boards of the Fortune 500 all got their CEO compensation exactly right, every year, to maximize profits.

 

[Touchdown]

Yeah, I get that. You said that the company sets compensation to maximize profits. How does the board do that for the CEO so that it knows that profits are maximized? Like, what's the process, and how do we know the process works?

ETA: Not trying to be difficult here, but the idea that "boards have to get it right or shareholders will sue" seems optimistic. Just knowing what we know about regular human judgement, I'd have a hard time believing that the 500 boards of the Fortune 500 all got their CEO compensation exactly right, every year, to maximize profits.

Humans are imprecise no one expects perfection which is why both sides of salary disputes will use the “average going rate” in the area as their main argument if the other side deviates from it.

 

[lentesta]

Humans are imprecise no one expects perfection which is why both sides of salary disputes will use the “average going rate” in the area as their main argument if the other side deviates from it.

Cool. Let's assume this is true. Nobody's perfect, and we use "average going rate."

How does imperfection and using averages, maximize the corporation's profits? This was your original point:

I think you’re confused, as that was entirely my point, ie it is the corporation’s goal to compensate employees as little as possible to increase profits. Any raise they offer will only occur when the loss of those employees causes profits to dwindle. As long as their workforce stays, raises are unlikely.

If the company uses "average going rate", then it's not paying as little as possible - by the definition of "average", other companies are paying less.

Let me put it another way: if there's a similar company paying less, then using "average going rate" isn't compensating employees as little as possible to increase profits. So I don't see how both things can be true.

It's okay to say that compensation is inexact, that corporations don't always seek to maximize profits, and that a lot of what we think is post-hoc rational behavior is really just guessing and random luck.

 

[el_super]

It's okay to say that compensation is inexact, that corporations don't always seek to maximize profits, and that a lot of what we think is post-hoc rational behavior is really just guessing and random luck.

A lot of compensation is inexact, and based in part on trial and error, but that doesn't negate the premise that a company can't just give away wages at the cost of profits.

 

[lentesta]

A lot of compensation is inexact, and based in part on trial and error, but that doesn't negate the premise that a company can't just give away wages at the cost of profits.

I don't know what this means.

 

[Touchdown]

Len, the limit on paying employees less is not being able to hire employees because better paying positions are open and available. Right now this condition currently exists in Orlando. If after this round of negotiations the pay is not what those employees need then it is on those employees to leave and take those better opportunities. That’s the only way this changes, if enough leave and Disney can’t operate effectively then the rates will go up. However, if the employees do what they have always done to this point and just complain and show up to work, then unfortunately the employees have under valued themselves

Would them doing this be difficult for said employees? Yes changing jobs always is hard at first, but eventually you get acclimated to your new place and you get paid more.

Would it stink for us fans? Undoubtedly.

Would it be bad for the company? Yes (that is infact the whole reason they will offer better compensation in the negotiations.)

But things would be much better for those employees and the ones who replace them long term.

 

[lazyboy97o]

The whole reason the suit happened was because Henry Ford was planning to massively increase salaries to all workers to share profits. Dodge sued Ford because they could not match this upcoming raise and was (rightly) worried they would lose a lot of employees. The suit forbade Ford from doing this. So you’re wrong

That’s not what happened. You don’t even have the background correct. The Dodge Brothers sued as individuals because they had a sizable ownership stake in The Ford Motor Company. It was not the Dodge Brothers Company (which would have had no standing to sue on behalf of the shareholders) suing, and it wasn’t over the brothers’ inability to compete on wages. Ford had already been know for its high wages (the Model T was over a decade old by the time of the suit) and the case didn’t force a wage reduction. What prompted the suit was Ford not paying a dividend and the reason for that action.

You’re extrapolating a lot of things that just are not there. Ford’s problem was the openly stated purpose for the changes. The problem was not one specific or even collection of actions, it was the motivation behind those actions. The reason a Board can offer an incredibly high compensation package is the same reason they can offer relatively high compensation to lower level employees, they have wide latitude to make business decisions. No single actions or group of actions are prohibited even if they incur costs or reduce profits so long as the intent is still to run the business well.

If what you claimed were true Comcast should have been sued over the Epic Universe announcement which included announcing that the park would open with a $15 entry wage at a time when Universal Orlando Resort was not paying that much. Heck, Disney still is not paying out a dividend, the very thing that promoted the Dodges to sue.

 

[el_super]

I don't know what this means.

At a very simple level, you have a company that needs to ensure that wages are low*. There really isn't anything wrong with that. It isn't any different from going into a negotiation expecting the unions want wages to be high.

* to clarify low in this context, the company needs to ensure that that labor rates are offering the maximum value per dollar.