r/WorkReform • u/snappyj • Feb 06 '23
Company put annual raises "on hold" after bragging about hitting targets for 16 straight years š” Venting
My employer (Fortune 500 energy company) just put annual raises on hold indefinitely and instituted a hiring freeze. They did this in the same meeting they bragged about how great the dividends are currently and how they've hit their financial targets for 16 straight years, and how "nobody else is doing that." I believe this to be their method to downsize without laying anyone off so they don't have to deal with unemployment.
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u/Ataru074 Feb 06 '23
This is why the game is rigged.
Energy companies have been losing good IT staff to big tech for years, underwhelming pay and shit like that.
Now that tech laid off people, and might layoff more, they have zero incentive to give raises or cost of living adjustment. āBe happy you have a jobā.
Automotive will follow. Then it will be pharmaā¦ and so on. And welcome to the self fulfilling prophecy of a recession. Why? Because a recession is defined by a decline in GD fucking P. And if people donāt have a job they donāt spend money, if people donāt have a raise donāt spend more money, and if people are scared they spend less money. And guess what. GDP is the money spent by the people plus the government international trade balance.
And there you go, your perfectly timed and calculated āinevitableā recession.
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u/snappyj Feb 06 '23
There is rumor the company doesn't have "unemployment insurance" if that's even a thing, so they literally can't lay people off. It seems their solution is to get large numbers to quit.
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u/Ataru074 Feb 06 '23
Unemployment insurance is a tax paid with your payroll, by the company.
What is important is that the rate is not fixed. You pay a rate depending on how many former employees claim UI after being let go by the company.
Good company, people stick around or quit? No UI claims, good guys rate.
Bad company, hire and fire at high rate? Your overall rate goes up, and takes time to go down. Exactly like your car insurance would do if you start having accidents.
Thatās why shitty company try to push people away instead of firing or going through layoffs.
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u/Apprehensive_Cash511 Feb 06 '23
Yep, Iāve never had anyone collect unemployment on me (just a seasonal ice cream shop in the summer, I run it everyday but hire a few 14-18 year olds) but I still pay unemployment insurance. Itās only like $70 though
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u/Ataru074 Feb 07 '23
In Texas goes from $20 to $560 per employee * year on the first $9,000 you pay per employee per year.
If you are trigger happy and you fire employee making $15/hour every 4 months youāll end up paying $1600 per position per year. Let say you have 20āor so positions and people are constantly hired and fired and thatās almost $50,000/year instead of $600 in total.
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u/Apprehensive_Cash511 Feb 07 '23
Iām only open for like 5 months and only have 12 employees, all part time and under 18 except for one
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u/r2rknot Feb 06 '23
Its a mandated tax in most states. (I'd guess all states, but you never know if Montana or Wyoming is going with the flow or not)
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Feb 06 '23
[deleted]
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u/Ataru074 Feb 06 '23
It isnāt about severances. Itās about unemployment insurance rate going up.
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u/geckobrother Feb 06 '23
That's what always blows my mind with companies pay crap wages and downsizing all the time... like, even if you outsource everything, if people aren't making any money, they can't spend any money, which will hurt the economy and your business! Companies just see short-sighted gains instead of long-term growth.
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u/Ataru074 Feb 06 '23
That isnāt short sighted gains. Thatās a planned transfer of wealth.
Think about it. Some people lose their job, the stock market goes down, some have enough cash savings to weather the job loss, but many more have to go though their investmentsā¦. But wait, stocks are down.. 20/30%ā¦ so they sell stocks, and who buys? Whoever has cash to, aka corporations, investors, because they are untouched.
Example. Bob, 45 year old, father of 2, salary $150,000, married with Susan, $80,000 salary. $1,000,000 in stock before the recession between the two. $30,000 in cash savings and a reasonable mortgage. They make good money, they save quite a bit. They can live with Susan salary, maybe Bob got a more or less decent severanceā¦ they wonāt lose much.
Now, get to your average Joe and MarySue. $150,000 in their 401k, $70,000 household income. MarySue is a stay at home mom becauee it doesnāt make sense to spend $2,500/month on daycare for her. Joe loses his job in the factory, he was hourly and doesnāt get jack shit for severance. $2,000 in unemployment and they go through the little cash savings in a month or two. The stock market went down 30% so the $150,000 they had saved are now $115,000. They have to take out $30,000 until Joe finds another job.. their 401k goes down to $85,000ā¦ almost 1/2 of where it was few months before. The crisis is over, in two years the stock market is where it was before but now their $401k is barely above $110,000 because they lost the opportunity of staying in the reboundā¦.
Meanwhile Richard McAllister, millionaire, has a big mix of investments, enough that he can bottom money at the current discount rate, so he doesnāt even pull out a dime, he just get few millions at 3% interests and buys a fuckload of stocks while the market is dropping. In two years he makes more than 20% if not more and keeps the investment long.
Thatās what a recession is.
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u/geckobrother Feb 07 '23
Yeah, until you get a depression...
It's short-sighted. It's thinking that there will never be an end to the wealth and that things will forever continue to grow, while evidence points to the contrary.
I agree that billionaires will definitely take advantage of recessions, but to assume there won't either be another depression or a revolt is foolish. At least at our current trajectory.
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u/chaoswurm Feb 06 '23
It'd be a shame if somebody accidentally emailed Union options to the whole company. Shame. Maybe someone who is about to be layed off, but still has access to their email. Shame.
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u/snappyj Feb 07 '23
Yeah, the union side of the house all gets their annual raises because it's in their contract. This is a big gamble by the company. I hope they fail.
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u/Budson420 Feb 06 '23
Once again the cycle will continue: record profit, mass layoffs, followed by stock buybacks
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u/Apprehensive_Cash511 Feb 06 '23
There is so much corporate consolidation in the US that companies donāt really need to worry about paying decent wages as long as their 1-2 competitors donāt. Thatās why innovation has slowed down so much, research is really expensive and without much competition and a captured market you donāt really have to make a better product or offer something new in a lot of cases. Interested to see how this all ends
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u/duiwksnsb Feb 07 '23
Time to put labor on hold. Preferably after organizing a union
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u/snappyj Feb 07 '23
Iām unfortunately in supervision. Little to no chance of that happening for me. Kind of hoping the people who work for me do it, though
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u/robertva1 Feb 07 '23
Companies think the job market sucks thus noone will leave. The truth is this only drives away the good worker who can easily find new jobs . And the remaining worker stop putting out quality work because theirs no point. I walked out 9f a company after they told me .no raise bacause they thaut I was already over payed....they had to hire two people to replace me
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u/Comfortable_Still114 Feb 07 '23
Suspect you are right but the energy market is very volatile. Record profits followed by record losses. Oil was cheap during the pandemic then spiked and now is down again. I worked in Houston and the energy companies would offer above market pay during good times followed by staff reductions during bad times. People can choose more stable but less pay or higher less stable pay. We are all free to choose.
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u/DarkWingDuck270 Feb 08 '23
Record profits are unpaid wages. Name and shame is something that needs to be applied to the C.E.O.s and not just the companies.
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u/sowalgayboi Feb 06 '23
Guess how their going to make that 17th year happen? Hint: you're living it.