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Biden Tells Union Works They Deserve ‘Fair Share’ of Corporate Profits

What if you're a janitor? Should you get paid more because corporate profits went up?

by
Walter Hudson

Bio

September 1, 2014 - 11:40 pm

Speaking during a Labor Day event in Detroit, Vice President Joe Biden told a crowd of hundreds that union employees deserve a “fair share” of corporate profits. The notion goes, if companies earn more, so should their employees. From Fox News:

Biden spoke Monday on the grounds of the former Tiger Stadium ahead of organized labor’s annual parade Monday. He stuck with populist themes, criticizing corporate pay and companies that leave the U. S. for lower taxes.

He says workers don’t want a handout. Biden says, “Just give them a chance.”

Yet, a handout is precisely what Biden’s advocating for. By virtue of the fact that you work for someone, your success should track proportionally with theirs. Never mind the true value of a given contribution. If your boss gets richer, you should too.

Like so many attractive notions, it falls apart upon deeper examination. Realize that wages, salaries, and other forms of employee compensation are essentially prices. Like all prices, employee compensation needs to reflect the actual market value of the service being provided. To charge different prices to different buyers based on their individual income would negate the entire function of price.

You don’t have to be rich to appreciate this point. Imagine you go to the grocery store and pay $25 for a loaf of bread because you make more money than someone else who only has to pay $3. Such a system would collapse in short order. Yet that’s the kind of silliness dispensed by Vice President Joe Biden and lapped up by his allies on the political Left.

If companies earn greater profits in a free market, it’s because they produce greater value. To the extent individual employees contribute to that value, they will be compensated, as the countless examples of jobs paying higher than the minimum wage and earning raises demonstrate. But to simply mandate that people earn more when the company does, which is the implied policy Biden here advocates, would necessarily take from those producing extra value to give to those who aren’t. In other words, it is a handout. Worse yet, it would disincentivize value creation. Why work to build value if you can’t reap the rewards? Likewise, why work to build value if you’ll be rewarded regardless?

(Today’s Fightin Words podcast is on this topic available here. 12:12 minutes long; 11.78 MB file size. Right click here to download this show to your hard drive. Subscribe through iTunes or RSS feed.)

Walter Hudson advocates for individual rights, serving on the board of the Republican Liberty Caucus of Minnesota, and as president of the Minority Liberty Alliance. He hosts a daily podcast entitled Fightin Words, proudly hosted on Twin Cities Newstalk Podcast Network. Walter is a city council member in Albertville, MN. Follow his work via Twitter and Facebook.

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Top Rated Comments   
If employees are to share in the profits, should they share in the losses, too? Why would one party bear only the benefits of financial profit and not the burden of financial loss?
15 weeks ago
15 weeks ago Link To Comment
Lets apply that theory to government workers, Joe! When there is a surplus (in the treasury), government workers get raises. When there is a deficit, government workers get pay cuts. Lets see if government workers will continue to support deficit spending policies.
15 weeks ago
15 weeks ago Link To Comment
I'll make it even easier for the VDUNCE - if you want a share of the profits, buy some stock in the company. The costs of labor impact those profits, too - so if labor costs go up, the profits shrink. Which means it's a bit of a snake eating itself here; you can't share the profits without directly reducing them, which makes the company less viable, and impacts stock price, which impacts future growth of the company.

Free lunches are so hard to find these days. Unless you work for the gov't. Like Biden has for decades. Which is why, even for a guy as flatly stupid as Biden, economic reality eludes him.
15 weeks ago
15 weeks ago Link To Comment
All Comments   (27)
All Comments   (27)
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Start working at home with Google! It¿s by-far the best job Ive had. Last Monday I got a new Alfa Romeo from bringing in $7778. I started this 9 months ago and practically straight away started making more than $83 per hour. I work through this link, >>>
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15 weeks ago
15 weeks ago Link To Comment
Joe Biden is trying to be Wesley Mouch and pushing the Equalization of Opportunity Bill (see Atlas Shrugged for an explanation).
15 weeks ago
15 weeks ago Link To Comment
Just when I start to think that maybe Biden isn't as bad as I always thought he was, he goes and opens his mouth.
15 weeks ago
15 weeks ago Link To Comment
So, if the company loses money, should the employee also lose money?
15 weeks ago
15 weeks ago Link To Comment
Who gets to say whats fair there Joe? Do the stockholders deserve a fair share? Does the Democrat party deserve a share of those union dues?
15 weeks ago
15 weeks ago Link To Comment
Everywhere I go there is variation on price for the same good or service based upon ability to pay. Take that loaf of bread. On sale in an upscale neighborhood grocery it WILL be more than the same loaf in the poorer parts of the same town. Try to buy web page hosting service at an individual's price if you are a sole proprietorship. Lastly, Hudson must have never attended one of the many corporate meetings I have been to where the top brass sing the praises of teamwork.....until it's time to divy up the chips. Get real and leave the econ models on the glossy centerfold page where they belong; to be admired buy never desired as they're false.
15 weeks ago
15 weeks ago Link To Comment
You're leaving out the variation in the product - the loaf of bread available in the upscale store is more likely to be organic bread or something else unique an expensive to produce. If the poor person comes into the hoity-toity store, they pay the same price as the rich person. If they rich person goes to the poor neighborhood, they get the loaf of bread at the same cost as the poor person.
15 weeks ago
15 weeks ago Link To Comment
B.S. Price of bread in a Wal-mart is the same in a poor neighborhood as a rich neighborhood. Now, if you want to go to the local snobs-are-us grocery store...
15 weeks ago
15 weeks ago Link To Comment
Comrade Joe is positioning himself for a new union job after he's unemployed in 2017.
15 weeks ago
15 weeks ago Link To Comment
If employees are to share in the profits, should they share in the losses, too? Why would one party bear only the benefits of financial profit and not the burden of financial loss?
15 weeks ago
15 weeks ago Link To Comment
They are already sharing in the profits. Of course, they have to WORK in order to get those profits. It's called a salary. What jerk-head is saying is something he isn't willing to do himself - share HIS wealth. Skru him, and the jackass he rode up on.
15 weeks ago
15 weeks ago Link To Comment
Like all mentally ill liberals, Biden has not figured out that the only thing you deserve is what you earn, everything else is called stealing. Biden only goes over with the willfully ignorant low or no information electorate.
15 weeks ago
15 weeks ago Link To Comment
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