July 16, 2015

WE ARE ALL THIRD WAY NOW:

Hillary Unveils 'Profit Sharing' Tax Plan (DANIEL HALPER, 7/16/15, Weekly Standard)

Today in New Hampshire, Clinton outlined one idea to address this key challenge: encouraging companies to share their profits with American workers. She outlined a key proposal to give workers the chance to share in the profits they help produce.

A Win-Win: Profit Sharing Is Good for Workers and Good for Business

Under profit-sharing arrangements, companies agree to distribute to workers a specified share of business profits. There is strong evidence that profit sharing is a win-win for both workers and business:

Profit sharing gives workers a stake in the company. Under profit-sharing arrangements, when a company does well, the workers share in the gains they helped produce. So when corporations see the type of near-record profits they have recently, not only would the executives and shareholders do well - the workers would too.

Profit sharing increases worker pay. Evidence shows that profit-sharing arrangements are linked with higher pay. If a worker is enrolled in a good profit-sharing plan, that could mean a raise of thousands of dollars.

For example, Professors Richard Freeman, Joseph Blasi, and Douglas Kruse of Harvard and Rutgers find "strong evidence" that profit sharing has "meaningful impacts on workers' wealth" because "[w]orkers with profit sharing or employee stock ownership are higher paid and have more benefits than other workers."

Profit sharing makes businesses more productive and innovative. Studies find that profit-sharing plans on the whole result in increased business productivity and innovation. This makes sense: when employees share in profits, they have a stronger stake in the company's success.

Profit sharing improves the workplace. Profit sharing has also been associated with other improvements in the workplace - including better employee training, lower employee turnover, and increased employee participation in decision-making. In fact, evidence suggests that profit-sharing leads workers to be more satisfied with their jobs overall.

Note that in order to maximize profit-sharing as a means of wealth redistribution requires that we help business to maximize profits in the first place.

Posted by at July 16, 2015 6:55 PM
  

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