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Screw the man!

Corporate entitlement has gotten ludicrous

I've just learned something quite interesting - in Auckland there's recently been a big contest between bus drivers and their employers over pay.

The bus drivers, who's income has fallen some 35% in real terms in the last twenty years (I'm told) have decided to press for a healthy increase. Unsurprisingly management is begging poverty in refusing.

The company in question boasts that they aim to return 20% profits to shareholders. Times are pretty good if you can manage that.

Times aren't so good. Apparently the increase the staff want adds up to about $4 million per annum. Shareholders got some $32 million last year, a return of 18%. So staff demands represent (assumming no other changes in income or productivity) 2% of shareholds profit, returning some 16% to shareholders. 16% is still a good return for doing nothing but putting up cash in a well proven and trodden market.

So management, who sees their duty to be returning as much profit as possible for their shareholders and who think 20% is reasonable is supported by the facts - they aren't returning the profit they want so they can't afford more expenses.

The staff, who probably don't see it as their dutry to return maximum profits to shareholders think a 2% reduction in profit to 16% is reasonable. And they're right (if they don't see maximising profits at their own expense their duty). So the facts support both positions.

And it becomes a simple matter of competing desires negotiating with their respective strengths.

But really, where the hell do companies get off expecting to be able to deliver 20% in what ought be tightly competitive industries? They should count themselves fortunate to be able to do better than 5%. I'd be well pleased with myself to get it up to 10%. Being in a position to contemplate amounts like 20% is an indictment of the society they're functioning in. I'm all for a freedom to invest ones capital - but the idea that simply doing so entitles one to handsome profits purely off the back of labour where the investment isn't a risk or in innovative technology or service but simply providing backing for a well established service is untenable.