AI boom drives SK Hynix to pay $477,000 bonus per employee

[trieste1s]

Employee profit sharing is nice.

Noteworthy no one suggests employee loss sharing. That’s the entrepreneur risk v reward that people forget when times are good.

There were 40 RAM manufacturers in the 80s. 12 in 2000. It’s a difficult industry to survive.

Except there was massive government intervention on behalf of SK Hynix and Samsung in the form of low-interest loans and tax credits. It's anti-entrepreneurship at that point. Corporations have become so large that some of them are now national security assets. If SK Hynix and Samsung had actively refused the billions of taxpayer money, and instead weathered the storms using their own entrepreneurship skills, then perhaps your point remains valid.

Lastly, private limited status also limits liabilities to the owners and shareholders, so there's no loss sharing there either.

 

[trieste1s]

A nation called the USSR tried that ... you might want to look up how that worked out for them.

Citations please!

 

[Squid Surprise]

Citations please!

Look up Switzerland 1:12 initiative… it failed fairly spectacularly when it went to a national vote back in 2013…

 

[Endymio]

Citations please!

Do you need cites on how the USSR, despite a better trained workforce ( by far the world's largest percentage of research scientists, engineers, and other PhD'd professionals) had only a quarter the per-capita GDP of the US, or that it set numerous laws on executive compensation, ensuring even the head of billion-dollar manufacturing firms generally made little more than the skilled workers below them? Do you also wish cites to prove water is wet, the Allies on WW2, and the US once revolted from Britain?

 

[ScottSoapbox]

It's not like small businesses are these great dragons of industry hoarding all the wealth, so no, the laws of relevance here aren't really applicable to them. A fair minimum wage is what is required. A more general law that says the highest paid employee should make say 20x or less the lowest paid employee would go a long way to bringing equitable pay. Employees are the reason businesses have profits in the first place, and someone else's employees are the reason the business has any customers. It benefits society and business to ensure they are all paid fairly.

If a business requires hoarding all the profits for an elite few to justify its existence, it's doing more harm than good.

So capitalism works fine except when you say so and government interference will save us.

Employees are NOT the reason businesses have profits in the first place. That's a flawed premise that you can't backup with anything but feelings.

Your value as an employee is based on the value you bring the company. That's why valuable employees are paid much more.

A company's profit is based on the problem it solves for customers that voluntarily exchange their money for the good or service, and the business model it uses to provide that solution (efficiency).

If government regulations requires hoarding all the profits and power for an elite few to justify its existence, it's doing more harm than good. See you can use that logical fallacy both ways.

Most of the worst excesses blamed on evil business exist because people believed that more government would save them when in reality the more government sold its power to eliminate fair competition and other market forces a few businesses. Result: a few business and the government win, consumers and employees lose. The fix for this is not even more government but less.

 

[ScottSoapbox]

Or we can change the laws to make profit sharing more equitable for everyone.

"equitable" is a made up word that means whatever the person using it decides it means - which of course is whatever helps them the most.

 

[an1uk]

Employee profit sharing is nice.

Noteworthy no one suggests employee loss sharing. That’s the entrepreneur risk v reward that people forget when times are good.

So no employee ever lost their job, income, couldn't pay their mortgage, and their whole family lost their home and couldn't afford to eat?! Often employees have much more to lose when a business fails. They often live pay check to pay check because of how the economy works.

Typically at the business end a rich investor loses their investment and they have many other investments and assets - the loss of one investment is of little consequence to them.

Typically employees are not paid an amount congruent with the value they generate for the business. It's often an amount relative to minimum wage - arguably this supports the risk the entrepreneur makes.

 

[human7]

No one is "hoarding" wealth. Stop using 19th century cliches. And actually in the US, small businesses constitute about 45% of total GDP.


As Nobel-prize winning economist Milton Friedman says, minimum-wage regulations are one of the clearest examples of a government regulation having the exact opposite effect as that which is intended.

No business will hire a worker unless that worker's labor can generate more profit for them than what the worker costs them. And thanks to ill-advised government regulations, the cost of a worker to a business is, depending on city and state, two or even three times higher what the worker's actually paid.


A nation called the USSR tried that ... you might want to look up how that worked out for them.

Every billionaire hoards wealth, as do the companies that make tons of profit and simultaneously lay off thousands of workers.

And others (David Card, Joshua Angrist and Guido Imbens) actually won the Nobel prize for, in part, showing that minimum wage doesn't always lead to a fall in employment, challenging the conventional wisdom, via the use of "natural experiments" (https://www.bbc.com/news/business-58870395).

A country called China is doing that, too (specifically, a cap of 3 million yuan for senior financial executives), the country seems to be doing just fine.

"equitable" is a made up word that means whatever the person using it decides it means - which of course is whatever helps them the most.

No, it isn't "made up", you can actually put math on it and measure it. Of course, you can choose whether or not you care about it, so that's made up, but that is true about any political position.

Employees are NOT the reason businesses have profits in the first place. That's a flawed premise that you can't backup with anything but feelings.

Your value as an employee is based on the value you bring the company. That's why valuable employees are paid much more.

A company's profit is based on the problem it solves for customers that voluntarily exchange their money for the good or service, and the business model it uses to provide that solution (efficiency).

So fire all the employees then, let's see how well that company can solve its customer's problems without them. Obviously, a company can only solve problems because of the labor provided by the employees, so yes, employees ARE the reason businesses have profits.

 

[Endymio]

So no employee ever lost their job, income, couldn't pay their mortgage, and their whole family lost their home and couldn't afford to eat?!

If you lose your job: find another. If you bought a home so expensive that you can't maintain the mortgage for a couple months during a job transition, that's your fault, not your employers.

Oh, and despite what you read in a 150-year old Dickens novel: in the US, Europe, and even Samsung's South Korea, no one starves because they lost their job.

Typically at the business end a rich investor loses their investment and they have many other investments

This coming from someone who's never made an investment in their life. I personally know several people who lost their life's savings attempting to start a new tech business.

The reality is the exact opposite of what you portray: when a business fails, investors can lose millions or even billions of dollars, while any competent employee simply trots out their resume and gets a new position ... sometimes at an even higher salary.

Typically employees are not paid an amount congruent with the value they generate for the business. It's often an amount relative to minimum wage

Both statements not only wrong, but based on false premises. Employees aren't supposed to be paid by the value they generate, but by the value of their labor on the open market. Even a zero-skilled janitor can make $100K+ in some markets ... if the supply of janitors is limited. The value an employee generates for the company merely sets a price ceiling -- no matter how scarce you are, you won't get paid more than the value you bring.

As for the absurd notion salaries are somehow tied to the minimum wage, less than 1% of workers in the US make minimum wage. And in major urban markets, even fast-food clerks can earn three times minimum wage.

 

[ScottSoapbox]

Every billionaire hoards wealth, as do the companies that make tons of profit and simultaneously lay off thousands of workers.

Where do they "hoard" it? In investments in other business? Or in banks that then loan that money out to other people or businesses? Negative wording aside profits are not bad. If the thousands of workers are so vital how does the business keep running? It's almost like they weren't vital!

And others (David Card, Joshua Angrist and Guido Imbens) actually won the Nobel prize for, in part, showing that minimum wage doesn't always lead to a fall in employment, challenging the conventional wisdom, via the use of "natural experiments" (https://www.bbc.com/news/business-58870395).

Hurray, it doesn't ALWAYS lead to increased unemployment. Guess what it often does?
Also most times it does not increase unemployment is when the wage was already above the minimum. Further, it hurts poor inexperienced workers the most. Making a low wage is better than no wage and getting experience to make higher wages is important. You know how many teenagers can't get jobs because they can't offer enough value to a company to be worth the higher min wages? Priced out by laws to help them they are replaced by digital kiosks that now make financial sense because unskilled labor is so expensive.

A country called China is doing that, too (specifically, a cap of 3 million yuan for senior financial executives), the country seems to be doing just fine.

LOL. China's economy has all sorts of problems.

No, it isn't "made up", you can actually put math on it and measure it. Of course, you can choose whether or not you care about it, so that's made up, but that is true about any political position.

It is made up. It does NOT mean equal because otherwise you would use that word and the two are often used in the same we need fairness statements. What is means is "equal as I the wise and powerful Oz define it". It's "equal" with a finger on the scale to make it "more fair". Which means whomever defines what equity means has ALL the power.

So fire all the employees then, let's see how well that company can solve its customer's problems without them. Obviously, a company can only solve problems because of the labor provided by the employees, so yes, employees ARE the reason businesses have profits.

Then why don't fired employees get profits without businesses? They can all quit and go on making their pay PLUS all those evil profits being withheld from them. That's your utopia! Start it today!

 

[Endymio]

Every billionaire hoards wealth

I realize the amount of envy and hatred you have for the highly successful, but the exact reverse is true of most billionaires. Take the world's richest man, for instance: Elon Musk. His "wealth" is more than 99.99% on paper alone, in the value of share prices -- so much so, in fact, that a few years back, he was forced to sell a large chunk of Tesla stock simply to pay his income taxes.

If Musk suddenly sold all his Tesla and SpaceX shares overnight, the actual cash he would receive would be ~10% of his stated net worth. He's not "hoarding" wealth -- he's using (and risking losing) his capital, in order to generate goods and services for the economy (and, incidently, employing tens of thousands of people in the process).

 

[ScottSoapbox]

So no employee ever lost their job, income, couldn't pay their mortgage, and their whole family lost their home and couldn't afford to eat?! Often employees have much more to lose when a business fails. They often live pay check to pay check because of how the economy works.

This is a red herring argument to sidestep my point. Still not loss sharing like profit sharing. Small business owners often stress about making payroll while employees don't. People living paycheck to paycheck has far more to do with the Federal Reserve devaluing the currency (which helps rich people's assets go up) than the incentive for people to start their own business.

Again, the employees are free to start their own business at any time. But 99.99999% don't but just complain that life isn't fair.

Typically at the business end a rich investor loses their investment and they have many other investments and assets - the loss of one investment is of little consequence to them.

This is also a red herring argument to sidestep my point.

Typically employees are not paid an amount congruent with the value they generate for the business. It's often an amount relative to minimum wage - arguably this supports the risk the entrepreneur makes.

If so they should ask for a raise and leave the company if they don't get.

Because IF they are that valuable companies will gladly pay it.

If they can't get a raise or another company to pay them more - guess what they are worth.

It's far better to increase your value that complain about unfairness based on feelings.

 

[Norsiiii]

I do love the “share profits with citizens” nonsense. I know it sounds like a lot of money - but that’s because it’s split between 35,000 people!

Split it between the MILLIONS of Korean citizens and it’s basically nothing…

Profits already are shared with the public, it's called company income tax

 

[Norsiiii]

A more general law that says the highest paid employee should make say 20x or less the lowest paid employee would go a long way to bringing equitable pay.

This is absolutely farcical, childish, ignoramus logic. Let me show you why:

If the base, market wage for an entry level position in, say, some sort of construction or civil engineering industry is $30k, then what you're saying is that regardless of whether the firm is a small 30-employee company that engineers suburban house roof trusses, or whether it's a 20,000 employee listed multi-national behemoth that builds $20B hydro-power stations, the wage of the general manager or CEO should be the exact same $600k?

How is any huge company ever supposed to find a competent GM if all the qualified candidates can make the exact same money working for a small, chilled out family-sized company with no liability instead?

Conversely, if your response is "well, the big company should just be paying 4x more for those entry level employees then", then you're signing a death sentence for all the small businesses by guaranteeing that they can never hire a single employee again - ever - since who tf would want to work at anywhere other than a high paying multi-national?

 

[Tayvl]

Or we can change the laws to make profit sharing more equitable for everyone.

Profit sharing should always be at the whim of the employer. Period. You can certainly argue that profit-sharing agreements must adhere to contract law, but not that law demands profit-sharing agreements.