Posted: 18 July 2010 at 1:56pm | IP Logged
Originally posted by Mister.K.Yes there is risk in everything. And the remuneration of a job considers
the risk involved, intelligence required, efforts required, value
generated and obviously the need for that job to the society.
Souro, there is an inherent risk in everything we do. The FedEx employee delivering a package might meet with an accident on the road. The pizza delivery guy working for Dominos Pizza might get stabbed on one of his routes. The construction worker might fall off the building. The children working on assembling fire crackers in Sivakasi might die if an explosion takes place.
Point is, it's not just the owners who take risk. Employees face huge risks as well.
Now, I don't know about you but IMO and in the opinion of most people in
this society, a person who is putting everything at stake to start a
new business is taking a far greater risk than someone delivering a
package or a pizza. And the bigger the venture, greater the risks.
Originally posted by Mister.K.It doesn't matter who loaned him the money. If it's a bank which provided the loan then they'll take their principal amount and interest and leave if the business is successful. If the business is unsuccessful then it'll be the owner who will have to pay the amount through some other means.
if it is just the money you ar etalking about, chances are the seed money is sown in by a venture capitalist or an investment bank. Even the banks take risks by lending to any/all companies. We have recently witnessed how bad loans affected the economy causing things to come crashing down.
And finally, employees too attempt / commit suicide and / or resort to other drastic measures when they lose jobs. They lose homes, cars, and basically go bankrupt if they can't hold on to a job if the bosses screw up and the company goes belly up.
If it's a venture capitalist who loaned the amount. Then they will either be a share holder of the company or will lend the money as loan. If they are share holder of the company then they are a part of those who own the company and will get a share of profits generated but will also have the risk of losing if the venture doesn't make money. And if they have given loan capital then they'll get interests and if the venture flops then they'll extract their loan and interest amount from the owner/ business.
Whatever I mentioned above, do you see anything where it mentions that the employees will have to pay up in case the venture proves to be unsuccessful?
And Mister.K. if an employee loses a job, he'll have a second chance of getting another job. His flow of income will cease temporarily but he won't lose everything that he already has. But the owner along with his current flow of income will also lose everything else. How much ever you try to make it comparable, they are simply not and it's the fact. Ultimately the employees won't take the burden of the company's losses and that's why they get fixed salaries independent of the profit generated.