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The popular business networking site “LinkedIn” has filed for an IPO worth an estimated $175 million dollars.  Co-founder and billionaire in the making Reid Hoffman, made the announcement yesterday, but did not indicate how many shares or at what price range they would be offered.  The company has approximately 90 million users and is currently free to use, but represents great potential in different monetizing strategies for its mostly well heeled members. The LinkedIn IPO will set the stage for social networking giant Facebook whose IPO will likely occur in calendar 2012.

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The list of best companies to work for in 2011 is now out.  Fortune has compiled the best scoring companies based on ratings from the most credible source possible; the employees. Many of the companies on the list are familiar names, appearing year after year.  But there are a few new names this year also.  Some of the categories considered in ranking them are salary, perks and quality of life as it relates to job satisfaction, happiness with management and good working relationships with coworkers.

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Ford has just finished one of their most profitable years ever and wants to reward employees for this incredible accomplishment.  UAW workers can expect to receive profit sharing bonuses this year that will likely be the largest in the last decade.  White collar workers on the other hand are not going to receive salary increases this year because their salaries are already on par with counterparts in the industry.

Profit sharing bonuses are typically paid out in March. The exact amount is still unknown but will be based on 2010 results.

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Andrew Biggs (a former Social Security analyst and Assistant Director of the Cato Institute’s Project on Social Security Choice) offers his perspective on the serious problem of States with underfunded pension funds.  The problem is one of solvency in which liabilities exceed the states assets.  He has proposed that states change the way they report their funds accounting by using market valuation rules to give a truer picture of the unfunded liability.  Some of these pensions are being funded now in riskier equities versus more stable bond offerings. Since these pensions are guaranteed, many taxpayers do not realize that they will be on the hook to make up for any shortfall. (listen to podcast below for full story)

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Some companies have found a very creepy way to increase their bottom line.  They are buying life insurance policies for employees in which the company and not the family receives the tax free payout in the event of the employees death. Millions of American workers have no knowledge that these policies have been taken out on them by companies with such prominent names as Dow Chemical, Walmart and AT&T.  These whole life policies are known in the business as “Dead Janitor” or “Dead Peasant” policies and are a fairly common practice.  Another financial benefit for the company is allowing them to borrow against these policies while the employee is still alive.  In yet another crazy twist, the employee does not even need to be currently employed by the company at the time of their death for the company to keep the policy active, which makes the likelihood of a future payout even greater.

Many states require companies to inform their employees when they take out a life insurance policy against them. Due to the awkward nature of this, companies have found a loophole to keep from informing their employees of the policy by having them written in states such as Georgia that don’t require employee consent.  In this case, it would be almost impossible to determine if your company has a policy on you.

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The idea of sharing the profits of a company equally among its workers may seem like a radical idea in a country based on the capitalist inverted triangle of profit distribution.  Conversely, all of the employees in a cooperative business have equal value and tend to be happier and more productive since they are all owners of the company rather than “owned” by the company.  The model would more closely approximate a wheel and spoke design in which each spoke (or employee owner) has the exact same length.  If the spokes were of varying lengths, then the wheel would be lopsided and unable to turn freely.

Alvarado Street Bakery of Petaluma California is an example of a successful cooperative in which workers each own an equal share of the company that entitles them to make decisions affecting salaries and benefits as well as a whole host of other business decisions such as how to allocate profits.  The average salary for these bakery workers is close to $70,000 per year with over half of the 116 workers having at least 15 years of service with the company.  Each day, Alvarado Street Bakery ships over 40,000 loaves of bread which is a tribute to the success of this form of business.

The idea of a worker cooperative owned business is not new.  Its origins date back to early 19th century England and was based on principals of improving the plight and quality of life for skilled workers and artisans.  The sustaining nature of this form of business is directly linked to the concept of employee stake in the success of the business.  Rather than the typical corporate model today, in which companies are owned by institutions of investors, the primary focus of the cooperative owned business becomes long term sustained growth driven by owner employees, rather than short run profits achieved through cost cutting consultive schemes.

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The union representing federal employees has come out strongly against any proposed wage freeze. They argue that it is not fair to try to balance the budget by punishing hard working federal employees. In any case, it is obvious that a federal wage freeze proposal will not in itself come close to balancing the budget any more than a piece of gum would have plugged the leak in the Titanic.  It is going to require painful sacrifice on the part of all Americans in order to restore the financial health and security of our nation.

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