The Rich get richer, much richer1

[Cyclone]

Fascinating. What made you think we were talking about the US though?

[Anna B]

I'm afraid the two are inextricably linked, right here on SheffieldForum, in my original post, where I said that Tory darling Martin Sorrell's 'pay packet for last year [rose] to around £68.5million' (Daily Mail).

 

Sir Martin Sorrell, chief executive of advertising group WPP, will take home up to £70million in salary and bonuses for last year… The colossal sum is certain to reignite public anger over boardroom pay. The payout represents a 63 per cent increase on the £43million he was awarded last year and means Sorrell [enjoyed] in excess of a staggering £190,000 a day in 2015' (Mail on Sunday).

 

However, in the context of a number of CEOs acknowledging misgivings over the size of their remuneration packages in the face of shareholder revolts, the 'boss of giant advertising firm WPP says he is not ashamed by the success of the company which has seen him pocket around £70million' (Daily Mail).

 

Meanwhile:

 

More than a quarter of care homes in the UK are in danger of going out of business within three years, figures obtained by BBC Radio Four suggest.

 

Essentially I am pointing to the gross disparity between the income of Martin Sorrell, in the press over the last few weeks for his £68,5million remuneration package for a single year, whilst simultaneously thousands of ordinary people face poverty and extreme hardship as the care sector sinks into crisis.

 

These factors clearly demonstrate the phenomenon that forms the title of my original post, that 'the rich get richer whilst' (as implied) 'the poor get poorer.'

 

Those who seek to distract us from appreciating these implications simply will not engage with the theme because the evidence is against them. All they can do is attempt to wrench the argument away from such firm foundations and sink it in a mire of confusion and misrepresentation.

 

Well put. I couldn't agree more.

 

---------- Post added 16-05-2016 at 13:17 ----------

 

I think old son it is you that is confused. You can point out that in your view the pay of one individual seems to you to be outrageous whilst others are not in such a fortunate position. That is a perfectly understandable view.

 

There is no link whatsoever between the two and you repeating that there is over and over and commenting on your own posts will convince no-one that there exists any link at all save that its not fair. Fine then - its not fair

end of thread.

 

You are wrong. Of course there is a link. The rich are sucking up wealth, assett stripping and leaving the rest of us with the crumbs.

 

In the case of care homes perhaps you'd care to explain why at an average of £650 per week, (more than 95% of the residents have ever earned in their lives to keep an entire family,) care homes are still struggling to survive. There's certainly no shortage of old people to fill them. Where is the money going? Not into care I assure you, as you would see if you'd been into these homes and seen the level of care, with the minimum number of staff working for minimum wage. Somebody, somewhere, is getting very rich on the back of it.

 

You'll be saying next there's no link between the BHS closures with the loss of jobs and pensions, and Sir Phillip Green's £400 million bonus.

 

---------- Post added 16-05-2016 at 13:46 ----------

 

How much of someone like Sorrel's bonus is made up by transferring British jobs overseas to increase profits? Of cutting corners to save money, of avoiding taxes by employing dubious methods etc? And when you are already as rich as Creosus is it moral to want even more when it's all at someone else's expense?

 

We used to talk of wealth trickling down. Now it sits in banks earning huge amounts which stays with the wealthy. The only thing that's trickling down is austerity and misery for those at the bottom, and that group is growing larger exponentially. We've passed a tipping point. You'll be caught in it sooner or later unless things change.

Edited May 16, 2016 by Anna B

[Cyclone]

If it were as easy as you suggest then there would be a booming market in care homes, I could open one now, lease a property, hire staff, get 20 pensioners in at £650/week each.

That £676,000 income should surely cover 10 minimum wage and 5 more highly paid, plus the rent and the managers of the facility. Then I'll just sit back and watch the money pile up in my account.

 

The fact that people aren't doing this suggests that there is no money to be made. And it's not because some masked fat cat would swoop in and somehow steal all my profit and cause the care home to close.

[RonJeremy]

Well put. I couldn't agree more.

 

---------- Post added 16-05-2016 at 13:17 ----------

 

 

You are wrong. Of course there is a link. The rich are sucking up wealth, assett stripping and leaving the rest of us with the crumbs.

 

In the case of care homes perhaps you'd care to explain why at an average of £650 per week, (more than 95% of the residents have ever earned in their lives to keep an entire family,) care homes are still struggling to survive. There's certainly no shortage of old people to fill them. Where is the money going? Not into care I assure you, as you would see if you'd been into these homes and seen the level of care, with the minimum number of staff working for minimum wage. Somebody, somewhere, is getting very rich on the back of it.

 

You'll be saying next there's no link between the BHS closures with the loss of jobs and pensions, and Sir Phillip Green's £400 million bonus.

 

---------- Post added 16-05-2016 at 13:46 ----------

 

How much of someone like Sorrel's bonus is made up by transferring British jobs overseas to increase profits? Of cutting corners to save money, of avoiding taxes by employing dubious methods etc? And when you are already as rich as Creosus is it moral to want even more when it's all at someone else's expense?

 

We used to talk of wealth trickling down. Now it sits in banks earning huge amounts which stays with the wealthy. The only thing that's trickling down is austerity and misery for those at the bottom, and that group is growing larger exponentially. We've passed a tipping point. You'll be caught in it sooner or later unless things change.

 

Comedy stuff. What are British jobs? And who created any jobs at all in WPP?

[redfox]

You are wrong. Of course there is a link. The rich are sucking up wealth, assett stripping and leaving the rest of us with the crumbs.

 

In the case of care homes perhaps you'd care to explain why at an average of £650 per week, (more than 95% of the residents have ever earned in their lives to keep an entire family,) care homes are still struggling to survive. There's certainly no shortage of old people to fill them. Where is the money going? Not into care I assure you, as you would see if you'd been into these homes and seen the level of care, with the minimum number of staff working for minimum wage. Somebody, somewhere, is getting very rich on the back of it.

 

 

Anna - why are there so many care homes closing and so many of those who work at them at risk of losing jobs? If you can get rich on the back of them the opposite would be surely happening - as you point out there is no shortage of customers. Staunton's point was one quarter are in danger of going "out of business" - doesn't fit your argument does it.

 

Not quite sure where you get the asset stripping from though.

 

What crumbs are we poor peasants left with then ?

[Gamston]

You are wrong. Of course there is a link. The rich are sucking up wealth, assett stripping and leaving the rest of us with the crumbs.

 

In the case of care homes perhaps you'd care to explain why at an average of £650 per week, (more than 95% of the residents have ever earned in their lives to keep an entire family,) care homes are still struggling to survive. There's certainly no shortage of old people to fill them. Where is the money going? Not into care I assure you, as you would see if you'd been into these homes and seen the level of care, with the minimum number of staff working for minimum wage. Somebody, somewhere, is getting very rich on the back of it.

 

 

Anna - why are there so many care homes closing and so many of those who work at them at risk of losing jobs? If you can get rich on the back of them the opposite would be surely happening - as you point out there is no shortage of customers. Staunton's point was one quarter are in danger of going "out of business" - doesn't fit your argument does it.

 

Not quite sure where you get the asset stripping from though.

 

What crumbs are we poor peasants left with then ?

 

You are correct it is not a case of asset stripping. The reason so many care homes go bankrupt is because the owners have not got enough of their own assets to finance the huge borrowing required to finance the buying and expansion of the buildings used for the care homes. When taxpayers money is such a large form of income, then normal common sense business principles are thrown out of the window. The fact when a care home goes bankrupt, then it is quickly bought by others in the industry is evidence enough they are very proftable when correct business people are running them.

 

It has made no common sense logic for the government to allow and encourage the change of ownership from the public sector to the private sector over the years, when taxpayers money is such a major source of income for the private owners.

[Anna B]

Anna - why are there so many care homes closing and so many of those who work at them at risk of losing jobs? If you can get rich on the back of them the opposite would be surely happening - as you point out there is no shortage of customers. Staunton's point was one quarter are in danger of going "out of business" - doesn't fit your argument does it.

 

As Gamston says, I suspect it's a lot to do with the astronomic cost of property and deals like PFI. The cost of land, property and rents have shot up to silly proportions in some parts of the country making many enterprises unaffordable to anyone who needs a mortgage or hasn't got a wodge of dosh behind them.

[Cyclone]

Many of the care homes sold their properties and then leased them back. They are now reaping what they have sown. But it's the fault of the care home owners and managers, no random CEOs of other companies who actually know how to manage a business and are rewarded for doing so.

[L00b]

As Gamston says, I suspect it's a lot to do with the astronomic cost of property and deals like PFI.

In the case of care homes, you might want to look into the ever-growing small forest Everest of rules and regulations setting out staffing qualifications and levels, building configuration and equipment requirements, and procedural systems that are all required to ensure statutory and liability insurance compliance.

 

And, whilst on that topic, insurance premium levels as well, particularly in the wake of the recent whistleblown scandals about some extraordinarily sub-par nursing homes. I talked about all this last Sunday with the manager of a care home in which my M-I-L's partner recently became a resident due to ill health. I thought our (legal) professional liability insurance was high...Jaysus, how wrong could I be!

 

"£650 per week" makes a nice headline figure to focus on, so much for the rent-a-shouters as seen on here, as for insufficiently-inexperienced owners-investors. But there's barely any fat in that (if any, subject to location and fill rate) once you're finished toting up the real cost of doing that particular business currently.

Many of the care homes sold their properties and then leased them back. They are now reaping what they have sown. But it's the fault of the care home owners and managers, no random CEOs of other companies who actually know how to manage a business and are rewarded for doing so.

True as well. A case of privileging a short-term capital gain over the longevity and stability of the business (which strongly suggests, not to say dictates, that the ownership of the property should vest in the business rather than a third party). Edited May 17, 2016 by L00b

[El Cid]

Fascinating. What made you think we were talking about the US though?

 

If you are referring to my post, it is Google UK