Just a second, let me get out my pencil and paper
Surely every profitable company is, by definition, paying it’s employees less than they earn for the company. This is how profit is made, no?
The question is how much of that profit gets redistributed to the employees and how much is pocketed by the boss. Give the employees too much and it cuts into your profit margin, give them too little and it lowers morale and productivity. So there’s a delicate balancing act at play. In a free market economy the amount payed is regulated (to a large extent) by what competing businesses are willing to pay employees for a similar job. (Treat 'em mean and they’ll jump ship.)
At least, that’s how I understand it.
I have to say, my personal experience here in Taiwan is that Laobans are constantly trying to get the most work out of employees for the least amount of money, often to the detriment of the business. (Increasing the workload with no corresponding financial reward, for example.) This kind of penny pinching has the negative effect that the good staff feel underappreciated and call it quits.
Just anecdotal, I know, but I’ve seen it happen time and again here. The good ones leave, there’s a revolving door of staff and the same broken work culture grinds on unchanged.
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Lol. At my current job, we’re all working at least 10 hours of unpaid overtime per week. I called the labor bureau to ask about it and they said they could be over tomorrow to help me demand my overtime pay, which I am entitled to by law. But I need something out of the job that I won’t be getting if I call them on their shit. But everyone else (formerly quiet about the issue) is getting noisier too. I figure I’ll wait until I get (or don’t get) my CNY bonus and then demand back pay + interest.
The problem is that most Taiwanese don’t even know that any hours worked over 8/day or 40/week means their employer MUST pay them overtime. So they just work 12 hour days and look tired all the time. The law is in favor of the worker, but the worker is too afraid of causing their laoban to lose face to do anything about it.
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We run our company as partners. Every full time worker owns a bit of the company and shares the responsibility of keeping it running.
Some things I noticed in the last few years is:
- higher productivity
- a lot less “mei banfa”
- everything is kept cleaner and tidier.
We’re a tiny company with a total of 6 Workers. I guess it’s harder to do in a larger company.
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That’s not GOP logic, that’s free trade/comparative advantage logic.
Free trade is the only thing economists agree on, liberal or conservative.
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All you people complaining about treatment of SEA workers don’t even want to let them to come to Taiwan and work.
The profit equals total revenue minus total costs.
TR - TC
Total revenue equals the price (P) you sell the product for times the quantity of the product you sell (Q).
TR = PQ
Total cost equals the wage you pay the laborer (w) times the number of hours you hire the laborer (L).
TC = wL
So here is the profit equation.
NOTE: PI = PROFIT, NOT 3.14…
How many of the product produced is a function of how many hours the laborer works.
Q = F(L)
We’ll denote it by Q(L)
Hence the profit equation can be written:
To maximize profit with respect to how many hours of labor you hire, take the derivative of the profit with respect to L, and set it equal to 0.
Q’(L) is how many of the product is produced by each hour of labor you hire, which is the productivity.
w/P, wage divided by price, is the REAL wage (the wage adjusted for prices).
Q’(L) = w/P
When you maximize profit, marginal productivity equals the real wage.
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have you actually ever worked in Taiwan?
I’m not saying you’re wrong, but actual money leaving Taiwan is not problematic. Money is only as good as what you can buy with it.
The migrant labour system in place in Taiwan is designed to STOP freedom of movement. It tries to box in the migrant workers, which of course benefits the boss. That’s why the powers that be are reluctant to change the laws to let these guys get residence rights (or citizenship) to “be able to move wherever” in the labor market, which is NOT happening now.
Guy
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Yes I agree.
Not letting them switch sectors creates inefficiencies just like not letting them come to Taiwan and work does.
I have a model for that too.
I’m not taking about free trade. I’m talking about sensible wages. Ford (while problematic for a lot of reasons) paid his employees wages that allowed them to be able to reasonably afford his cars. Factory workers in the US through the 70s were paid well enough that they could not only afford their primary home, they often had a second (vacation) home on top of it. They poured the money they earned back into the economy, which flourished. The baby boom happened because the US economy was doing very well during that time. Stuttgart Germany continues to pay their car factory workers incredibly well and gives them very sensible working hours and holidays. Germany is one of the most productive economies on earth. In the US, wages haven’t even kept up with inflation. Amazon is “being generous” by offering US$15/hr to warehouse workers that are expected to work faster than humanly possible and there are no excuses allowed for missed days of work, including giving birth. This does not help keep the economy going. It helps make sure the ultra rich stay that way and the peasants stay in their place too. The TW model, just like the US model, of hiring migrants to do the dirty work then send the migrants, along with their money, back to where they came from does not help the economy as a whole. It help the people on top get rich while nothing tinkles down to anyone else
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Yes you are. Labor flows across borders are a form of trade.
You’re trading inputs instead of outputs.
What’s the unemployment rate in Germany?
The US economy is much stronger than the German economy.
Correct me if I am wrong, but it seems like wages have really stagnated here. Jobs (and I hear not just teaching) today pay as much as they did 25-30 years ago. Inflation exists but there seems to be a certain opportunistic blindness to it by those on the higher rungs of society. Why not go abroad or go to China to fetch 2x or even 3x the pay for the same job? It really does seem the calculus here is completely rigged in the laobans’ favor, and a complaint I hear often is those currently in power are too busy currying the laobans’ favor to really change that calculus. Brain drain seems to be a real problem here and I suspect it will continue if people can make so much more money (and even have less stress!) doing the same thing outside of Taiwan.
Maybe I am vastly oversimplifying this, but it seems the gov here really needs to start pressuring companies to keep their greed in check and raise their wages – this issue seems to be a low-hanging one for the KMT/China to capitalize on as they seek to more effectively persuade the younger demographic that they can offer a better future for Taiwan. Feels like a pretty dangerous game being played by those in power right now, with short term gluttony preferred over shoring up a legitimately thorny issue that has been largely responsible for low birth rates, brain drain, and building resentment.
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Hi boss are you hiring by any chance 
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Yes they have, and that’s due to productivity stagnating too. Companies, factories moved to China.
Lower investment means lower productivity.
Fortunately, things are turning around.
This is not nearly as cute as the equations that ‘prove’ 1==0.
I’d be happy to explain any part of the equation.
Do you actually think that it’s correct?