Profit Sharing.

Maoriland Worker, Volume 2, Issue 41, 15 December 1911, Page 10

Profit Sharing.

What is claimed to bo a successful case of profit-sharing was expounded to members of the New Zealand Club last week by Mr. Theodore 0. Taylor, a British M.P. now visiting this country. ' Mr. Taylor is a Yorkshire niillowiier, and the scheme of profitsharing adopted by his firm was explained by him to the "Sydney.Herald" as follows:—"After the year's expenses are paid,, and proper depreciation reckoned upon all wasting assets, interest upon capital at the rate of 5 per cent, is the first charge upon such profit as the year's balance-sheet shows. After that capital and labor each participates at the same rate per cent; That is to say, the dividend is apportioned to the total capital andthetotal amount paid for labor during, the year on an equal footing." A concrete example of '"profit-shar-ing-" is given: ''Mr. Taylor supposes business with a capital of £120,000 and paying in wages and'salaries £80,----000 in "the year, at the end of which it shows £16,000 clear profit. The first charge of 5 per cent, on the capital swallows £6000 of the profit, leaving £10,000 to be divided between "capital and labor." The "wages and salaries," £80,000, are, for the purpose of the division added to the capital, which has already got its 5 per cent. The total is £200,000, on which the balance" of profits, £10,000, represents 5 pea*'cent. In- the division, capital takes another £6000 as its share and hands labor 5 per cent, on the wages paid, or £4000, the lion's share -of which naturally goes to the highly r paicl men, while the; poorly-paid "millhands" with £1 a week and less (generally less) 'would get "a bonus" of 5 per cent, in addition to wages." Now, to call this profit-sharing is simply juggling with words. It is really a bonus system, which is more fanciful than' real. -While capital receives 10 per cent., the man getting £1 -a week will be paid a bonus' of an extra shilling a week at the end of the year, if be lias kept his health and been able to work full time. But that us not all. Here is another of Mr. Taylor's statements, which has not seen the light in New Zealand papers so far: "To all who have been in our employ the whole year we pay the labor bonus in new shares of the company, the future dividends on which are paid in cash. The labor bonus payable on wages to people who have not been the whole year in our employ is placed to the credit of a workers' benefit fund, and strictly devoted in various ways to the benefit of the employees." That means that; the bonus is really a credit entry, which, has no cash value, as the shares .are not negotiable and can only be held by those in the firm's employment. Mr. Taylor claims that the scheme has been a .thorough success, and says that although he may or "may not be so rich as he should otherwise have been, in respect of those things that are.; worth more than money he is a grea£ gainer. That all depends upon the point of view. We have little doubt of its "success" from the -viewpoint: of Blr. Taylor, but should be glad of further information to enable us to know how it is regarded by the workers concerned. But one thing is clear, and that is that the system is not a profit-sharing one. Perhaps Mr. Taylor will tell us how the system affects his v.orkneo-nle. We are anxious to know.