Mandatory Profit Sharing For Companies A Way To Reduce The Gap Between Rich and Poor?

by matej on August 6, 2012 · 0 comments

In many countries around the world, including the Philippines and France to name just two, mandatory profit sharing is being looked at rather seriously as a way to improve the income, and thus the lives, of millions of workers in their respective countries.

What Is The Initial Idea?

The reasoning behind this is quite simple, if not the actual enacting of the law; the heads of many major corporations typically make millions of dollars a year (or the respective country currency) while many workers who actually produce the goods and services that help make these millions walk away with barely enough to survive, let alone thrive.

If profit sharing were made mandatory the wealth of some of the biggest companies would be distributed more fairly among all of the people who actually work to make the company profitable to begin with. It’s a sound idea but not without its detractors.

The governments of these countries believe that this is a necessary step to distribute wealth among the people at the lower rungs of major business instead of the very select few who are at the top taking home the lion’s share of the profit.

Interestingly enough, while most major companies are against this the federal governments are in favor, mostly because it will enable them to keep better track of what taxes are paid and if they are correct. This fact has not gone unnoticed by many heads of industry.

Which Country’s Are Already Implementing It?

In France they have enacted laws that guarantee the paying of bonuses to employees by certain businesses but, if that company pays their employees with profit sharing, they are exempt. In effect these companies are choosing to profit share with their employees rather than be forced by the government to pay bonuses.

In the Philippines there are some that believe workers will be more inclined to work harder and more diligently if they know that their effort will be rewarded at the end of the fiscal year, an opinion that many agree with.

It’s not an idea that is universally loved by any means, and many heads of large corporations are vehemently against it for obvious reasons. However, as the gap between rich and poor widens and the idea makers slowly run out of ideas on how to close the gap, this may be one whose time has come.

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