I think the issue is that it might not be a small difference. Most companies don't make that much money on a profit per employee basis.

https://i.imgur.com/SF6RGxX.png

Amazon makes $21,000/employee per year and that's just the direct employees, not including all the subcontracted stuff like this. Walmart makes $6,000/employee per year.

Walmart might be an easier example to pick on because they have fewer subcontracted employees and they're on a more stable basis (rather than trying to take over the world like Amazon).

https://www.wolframalpha.com/input?i=wmt+profit+per+employee

From 2012 to 2021, Walmart has ranged from $3,000-8,000 in profit per employee per year. The average hourly wage for for frontline workers at Walmart is $17.50 or around $35,000/year. If Walmart were to increase salaries by $3,500/year (a 10% raise for frontline workers and substantially less for many workers), it would decrease profits by more than half.

So many people think that margins are way better than they are. Whether it's a 10% increase in salaries or a 10% reduction in workload, companies are often operating on thin margins.

You're not talking about accepting a 0.25% less return. You're probably talking about accepting 6-10% less return - unless we start talking about redistribution.

Let's say that Walmart gives their frontline workers a 10% raise and reduces the pay of their knowledge workers to compensate (and for the moment let's say that those knowledge workers can't quit and move to a different job). Then we've potentially created a situation where we've materially made workers lives better.

Are you willing to accept a lower salary for yourself to pay workers better? That's not a rhetorical question. I think many people would be. Living in a good society is important. In fact, many people basically vote for this through expanded government programs. They vote to reduce their income to make things better for workers who make less money than they do.

How can we practically implement what you want in a way that can actually exist? Well, we can increase the minimum wage. Yes, increasing the minimum wage can create some unemployment, but there's a decent amount of economic research showing the impact is smaller than we used to believe and we're also in a period of record employment. Things like this can also cause some inflationary pressure in certain sectors, but it doesn't have to be across the board since, for example, there aren't a lot of software engineers making minimum wage.

Of course, some of this goes back to power. In the Walmart example, I said we'd assume that the knowledge workers couldn't quit for a new job basically to protest the redistribution of wages from them to lower paid workers. Well, one of the issues we have is that many knowledge workers have the power to get higher wages. A problem to overcome is that many knowledge workers would likely argue that if things at Walmart are getting more expensive to pay the higher minimum wage (aka, some inflation is happening), then they should get paid more. At that point, the inflation can be more general. If everyone earns 10% more, then no one has actually earned 10% more. If only some people get the 10% raise, then they actually have a larger share of the pie.

But the problem is that there isn't an easy solution like "if only companies would give up 2% of their profits to their workers we'd be in a workers' paradise!" Yea, we'd all be willing to accept a 0.25% less annual return IF workers had meaningfully better existences. However, your proposal is more like giving Walmart workers a $150 bonus. That isn't nothing, but I don't think you'd say that's a meaningfully better existence with a more dignified life. The problem is that your 0.25% less return just doesn't mean much in a lot of cases.