Do you have any idea why the stock value might go up after a headcount reduction?
Why?? 
If an auto manufacturer, as a basic example, automates their processes, needing fewer employees while upping manufacturing standards and quality, why shouldn’t that company make more while needing fewer people? Do you invest in companies that are willing to lose money by keeping on unneeded staff??
What 10%? My wages are too low.
The rich can get rich, or richer - good for them. The real question is why are the 1% getting rich but not the rest of us? It used to be everyone could get rich without it being a competition. The modern economy puts all the spoils of growth into the hands of the rich rather than spreading it out. Workers are more productive, but wages stopped following the increase in productivity. Why?
Does your company have a 401K or other pre-taxed deduction program? If so, then the money comes out before you are taxed, and in many cases you won’t see a very large change in your take home pay. Simply budget for the change and then forget about it.
And before you say only rich people can do this, I’ve been doing this for decades now, and started long before I was making a substantial amount of money…and continued to do it even after the dot com bust when network engineers became a dime a dozen and the market was flooded with engineers laid off from dying tech companies and the salary market price dropped like a stone. Sometimes it was very hard, but the end goal is to have that money when I want to kick back and retire.
Depends on your field really. When you say ‘the rest of us’, you need to be aware that not all labor categories are stagnant or dropping, just some of them. But the broader answer to the last part of your paragraph here is that the value add that most companies are experiencing doesn’t come from labor, but from automation and expert systems and streamlining of their processes. So, since it’s not labor that is increasing the productivity it’s not being reflected in labor getting an increase in their pay. If you are in a category of labor where the industry needs you to gain increased productivity then you have a bargaining chip to use wrt increased salaries. If those gains are due to automation, however, then you don’t, since it’s ‘the rich’ who are dropping in the capital to provide that automation, and the only ones besides them that benefit from that are the consumers and the very vertical labor who does the automation in the first place.
I’ll forget about it until my checks start bouncing.
My point was that many workers today don’t have extra money to invest because wages haven’t kept up with inflation. They are wage-poor and investment-poor.
I love it when people say “anyone can do this because I did.” You aren’t typical. Millions of workers today can barely pay the bills and don’t have spare cash to save or invest.
The bottom 90% of the income distribution has been stagnant or dropping for the last three decades. That’s not some, that’s most.
But that’s always been true. So how did wages rise for 100 years before? How did we create the middle class?
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I’ll forget about it until my checks start bouncing.
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Well, that would mean you didn’t budget. 
There are certainly millions of Americans…10’s of millions actually, who COULD take advantage of a 401K program but don’t. I’m unconvinced that all or even most of them couldn’t, however. So, do you have a cell phone with a data plan? Home internet? Do you get cable or satellite TV? Do you have a new car or a car payment? Do you ever eat out? Fast food for lunch, perhaps? Or are you basically going through life spending the minimum already (using that public library account to chat on this message board, perhaps?), eating ramen every night and taking it to work every day, biking to school on a 30 year old bike, etc etc? If so then yeah, you are screwed…there is zero room for you to invest. If not, then there are some things in your budget you could do without to put in at least something towards your retirement. Even if it started out as just $5 per pay check it’s something.
And I love it when some of my cow-orkers say exactly the same thing to me (as I give this speech a lot at work) while they are texting on their cell phone or telling me about going to the casino on Friday evening or munching on their Wendy’s lunch. Maybe it’s true in your case…you just have zero slack and couldn’t invest a penny. But it’s not true in all or, in my experience even most cases. It’s just a matter that the folks making the decision would rather have that cell phone, that high speed internet connection, that cable or satellite TV or whatever than to invest that money for the long term.
Because it increases shareholder value, unemployed workers be damned.
That’s the purpose of a (for profit) corporation. What is your alternative?
I was pretty much agreeing with you as you disagreed with Shodan. We’ve had threads before about the definition of rich, but the way you and I are rich doesn’t contribute much to income inequality. We’re not outliers who skew the average income and wealth level.
That’s not what is typically meant by international competition. 90% of the people who work in my building were born outside of the US. But they pretty much all went to grad school here, and are pretty much all citizens or on the path to citizenship. They are no more international competition than Isaac Asimov (who was born in Russia) was.
Outsourcing the CEO job to Banaglore would be.
The average hourly wage in 1964 in constant dollars was $19.18 in 1964, and is $20.67 now. This is wages only - it does not take into account the increase in value of non-wage benefits.
Regards,
Shodan
Voters hollowed out the middle class by voting in politicians that enacted insane policy. You cannot have de-facto open borders and global free trade while having a wage floor. All it takes is some research into how much stuff those huge container ships move daily to realize that jobs were going to move to where labor is cheap.
If the state could legislate wealth the USSR would still be around and China would still be communist.
Millions of workers also buy stuff they don’t need.
But, on that subject, since it appears we could use more demand side economics a basic income with no minimum wage would be a good start in solving economic issues.
Sam Walton got rich by creating Walmart. Not by shopping there. The notion that most people got rich by spending less then they earn and investing wisely is largely fantasy.
What people are talking about when they say “Wall Street rigging the economy”, is that a number of people on Wall Street got rich by selling complex financial instruments that they knew to be flawed or outright fraudulent. The regulatory mechanisms that were in place to prevent this sort of thing from happening were largely inadequate or ignored. And for the most part, the people who were responsible largely did not suffer any consequences.
When people talk about “rich” they are not talking about middle managers and executives making six figures and worth a million dollars, mostly tied up in their house and 401k. They are talking about a self perpetuating class of super-wealthy bankers, hedge fund managers, venture capitalists, CEOs, and corporate board members and who control vast amounts of capital and actively work to enact legislation and other policies to increase their wealth at the expense of the middle and working class.
China IS still communist. Just sayin’…
Actually, that is progress for the most part.
Imagine Widget Co. makes widgets. Widget Co. figures out a way to make more Widgets using less workers. This will, in most cases, make the cost of producing the widgets go down. Widget Co. produces more widgets for less cost. Widget Co. sells more widgets than their competetors. Widget Co. lays off some workers because Widget Co. is producing more Widgets and earning more profits using fewer employees. The stock rises because Widget Co. is more profitable and more people want to own the stock.
The laid off employees, however, aren’t very happy until they get another job. Sooner or later the laid off employees get another job producing something else. This process can really suck for the laid off employees.
However, for the market as a whole you have Widget Co. making more widgets using less people. The laid off people will get jobs and produce something else. And in the end you have
Widget Co. producing more widgets cheaper and
Widget Co.s previous employees producing something else.
so you end up with more stuff overall.
The short term can really suck for anyone who is laid off. However, if this type of process didn’t occur, we would still have 50%+ of the work force producing food instead of making things like cars, T.V.s, computers, etc.
, something you may want to think about. Most of the rich people I know budget using ‘pay yourself first’ as the primary budgeting decision.
Most poor people I know (and I’ve done this in the past myself) use the ‘pay the car/boat/house/t.v./whatever’ first method of budgeting. This is the ‘Oh man! I like the new Dodge Challenger! Even though I have a three year old Mustang, I just gotta have the new Dodge Challenger!’ method. In fact, one of my best friends earns (including his wife’s income) about twice what I do. They both have shiny new cars. They have real marble in the bathroom and kitchen, recently added. They have taken lots of expensive vacations. And they are about -><- this close to losing it all. One bad month and they are screwed. Additionally, they will work until the day they die if they don’t change the way they spend.
Now, it isn’t easy to do. You have to eliminate debt except for a mortgage. You have to put off buying new stuff all the time. You may have to read Mr. Money Mustache*. But if you do it you can save and invest.
Slee
*I have no connection to MMM. Just think he has some good ideas.
No it isn’t - I have already given a cite to that.
Regards,
Shodan