As we all know but are afraid to admit, employees only exist to make investors money. Workers are an asset, not a liability. It’s a cold look at corporate America. With the recent announcement of closings for Macy’s and Sears, retail is a good example.
Investors put money to risk into a business for an economy of cheap spenders that requires workers to tend to the needs of positions that do not require specialized skills. They seek out those willing to work for the asking wage and find them only to have them complain about the customers that provide their income while also complaining about a wage that they agreed to when seeking a job. These businesses are highly competitive due to the markets that Americans have created for themselves in their desire to spend less and less for a product while seeking to consistently gain to have higher wages. Unions are designed to aid in this aspect.
America says, hey, we want more money and we want cheap gas…etc so we’re going to protest and we won’t do a dollars work for a dollar. China says to American workers, hey, we’ll take that dollar if you guys don’t want it because we have areas where people live in shacks with an entirely different local economy.
So people agree to a wage and a position with a set of policies, all carefully designed to make investors a return but yet the employees want to take as much of that as possible for themselves by seeking higher amounts and still expect for the business to create new investment opportunities or even keep people investing all while competing with others and on top of all that, keep employees employed? Just so they can…buy more items made in China because it’s cheaper? Spend more at the Dollar General? or what?
Seems quite the vicious cycle. No doubt $60 million in profits sounds like a lot to low wage employees that accuses a company of being greedy but …how is the employee not being greedy as well? That $60 million can turn into -$60 million within a year, sometimes in a quarter. Employees have no stake in the company so if it is not greed, then why would they seek higher wages instead of just living within their means? Of course raising minimum wage does nothing for their lifestyle in the long run since it effects the total economy of inflation. They were poor when making $1.25/hr, still poor when it was raised to $4.25/hr and just as poor of a lifestyle at $7.25/hr …is that right? Milk goes from .50 cents to $1.80 to $4.80? Is there some magical inflation stop barrier in place that I don’t know about? How can min wage workers really live a better lifestyle with only a low skilled job? How could that work?
People often debate me (often getting angry) as if I got the whole investor/employee relationship wrong…is it wrong? If so then how the *** does our economy work? Either it works like that or it doesn’t but so far no one has actually explained that it doesn’t work like that. Is it not a tiered system? Or do some people just live in an imaginary world of unicorns? “Down with the system but don’t take away my lifestyle!!” type of rant? We have babies like rabbits, future workers but yet don’t take away old workers, create new jobs but yet wallstreet is evil?
I see it as employees are just as greedy as the corporations. everyone wants that dollar but doesn’t really want to do anything for it. Hell I don’t want to work either but I don’t complain. It is what it is.
Stockholders and managers want to get the highest worker productivity at the lowest cost. Workers want to get the highest wages for the least amount of work.
First, welcome to free markets. Has nothing to do with capitalism. We all want to earn more, and there’s no shame in that. Nobody wants money. We want the things that money can give us: security, a family life, good homes, food, vacations, etc. As long as you aren’t cheating people for what you earn or crossing moral lines to do so, there’s nothing wrong with wanting to make more money. It doesn’t really matter if the employer is a corporation or not. Employees have to produce substantially more productivity than they are paid in order to be fiscally worthwhile. That’s just a fact of math.
But competition cuts both ways. Growing economies tend to boost wages. Obviously if employers can offer lower wages and still get the same amount of work, it makes sense to do so. But the thing is, employees tend not to accept lower wages if they can get better ones elsewhere. Even the most powerful companies have a very, very limited ability to lower wages. Some firms have been destroyed because they couldn’t or wouldn’t offer reasonable pay. Others get around this by offering different types of compensation, such mentoring, social support, a fun or relaxed work environment, or good benefits (though these also cost money). And on the flipside, companies that treat their employees badly often have high labor costs as a result. Even if they avoid that, other problems can bite them later on down the line. Witness Wells Fargo’s recent adventure in combining a PR nightmare with massive fines - all due to a combination of poor pay and mistreatment.
Technically, workers are neither an asset or a liability but a payroll expense to the company.
They are essentially third-parties; they bring no inherent value to the company like a true asset and do not represent long-term liability unless under a guaranteed contract for some amount of time in the future. But that’s really just an extension of payroll expense and is not very common.
If a company needs a commodity asset like oil, iron or software, the price depends solely on supply and demand and to a certain extent power of the players. Someone with monopoly power can charge more for things which cost nearly nothing to produce.
We treat employees differently, both out of respect for the fact that they need to live and eat and also because they vote. So we put a floor on pay. An employee can be greedy, but it won’t do any good unless that employee has power relative to the employer. Definitely true for CEOs, also true for people with rare skills. Is going for the best offer when looking for a job greedy? I don’t think so.
This seems to imply that you consider employees commodities, like butter or steel. May be true for burger flippers, but which Silicon Valley company would you invest in - one who hired the bottom 10% of a college class or one who hired from the top 10%? The former might be cheaper absolutely, but the latter will be a lot cheaper in good work per dollar.
He didn’t say that at all. He accurately stated the kind of impact they have on a company’s bottom line; which is, that they are entirely needed to produce a good or service, but are not part of its balance sheet.
Second, the credentials of a worker make no difference to the end result. The only things which matters are the skills of the workforce and the useful ends to which those skills are applied. The bottom 10% of the college class may have far more value than the top.
No, it’s capitalist economics, which is at most a subset of “business.” There are other ways to account for the owner/manager/employee relationship.
Never forget that economics is the only “science” that essentially gets to make up its own rules to play by. Just because an agreed set of rules “works” doesn’t mean it’s a natural law or the only set of rules that can be used.
A system in which workers are motivated to do more than squeeze the maximum compensation while owners are motivated to do more than minimize costs tends to produce benefits for all players, but it’s a lesson most industries have to relearn at intervals.
The problem isn’t about who is greedy, but who has the power to act upon that greed.
A greedy minimum wage worker is effectively powerless to act upon his greed. Unless he’s sitting on skills that his employer can’t do without, he’s getting minimum wage, and that’s it.
As productivity improves and excess profits are generated, the worker has no ability to tap into that wealth, every penny of it goes to the owner.
Multiply this situation millions of times over decades, and you get a worker class with stagnant wages coupled with an ownership class that gets wealthier and wealthier, not just in total dollars, but as a percentage of the total wealth of the economy.
The only way the worker class gets their slice is if we have a legitimate long lived shortage of labor (rare), if labor unions exist to equalize the negotiating position of labor vs. employer or if the government gets involved.
Ultimately, without enough unions, it falls upon the government to make public policy that ensures the working class garners some of the benefits of rising per capita GDP. Individually, corporations must act to reduce worker costs (incomes), in order to remain competitive. However, the overall health of the economy is not improved by minimizing worker incomes.
I’m not sure what you are asking. There is plenty of information on macroeconomics out there on the internet and your local public library.
But the basic gist is the economy is a complex system consisting of millions of actors (individual consumers, business owners and their agents, various middle men) whose ultimate purpose is to convert raw materials into the goods and services that meet the wants and needs of the people living in that economy.
Simply put, if you don’t want to work (and who does really?), who do you think is going to prepare your food, make your clothes, build the roof over your head while you don’t do anything to contribute?
And, not so simply put, given that 1955 is dead and was never representative of normality anyway, and that we have the long, strong and continuing trend of ever more workers and ever fewer “good” jobs (in the 1955 sense)… What if there isn’t a job?
What is a “good” job in the “1955 sense”? We have a lot of good jobs in 2016 that simply didn’t exist in 1955.
Although when people mean “good” job, they tend to mean “jobs where I don’t have to do any real work”. Usually highly paid office jobs pushing paper around. Honestly, I don’t get it when people say “there are no jobs”. Aside from the high-paying corporate professional work that I do in Manhattan, I see all sorts of people doing all sorts of jobs. The nanny I pay to watch my kid. The doorman and maintenance staff who maintain the building I live in. The construction workers who seem to have lifetime employment security fixing the buildings façade, plus all the other workers and real estate developers working on all the other buildings I see going up around the city. The girls in my local coffee shop. The transit workers who take people to and from the city. The wait staff at my favorite restaurant. The salespeople at my local Best Buy (not to mention all the people involved in making all the products they sell). The list goes on and on.
The fact remains, in spite of all our automation, we still require people to do work in order for society to run. So do you feel like you don’t need to be one of those people?
Economics doesn’t “make up it’s own rules”. It is an attempt to analyze human behavior as it relates to maximizing economic output in a fair and equitable manner.
No, and you’re missing the point. The point is that all the products and services you enjoy come from the fruits of someone else’s labor and ideas. Those people are not obligated to provide that labor or ideas without adequate compensation.
What you describe is a fundamental problem of economics. How does society provide services such as food, clothes and housing for people for whom it is not economically profitable to do so?
Are you under the impression that it’s not ok for workers to bail? They just won’t get paid anymore.
Characterizing workers who strive to get paid the most for the least amount of productivity as non-contributing is as senseless as expecting stockholders to invest in companies that don’t make enough profit.
Also far more powerful labor unions that would actually put workers and corporations on an even playing field instead of having every burger flipper negotiate on his own against the every other burger flipper in the world and professional negotiators hired by the company.
Actually, the current economic theory that seems to rule the day, just tries to maximize income for those who have the most economic power and frankly doesn’t give a damn about equability. The truth is that current encomic theory is entirely amoral, and yet is treated as though it is a moral system. When people say that workers should only be paid the amount that they can negotiate for themselves, because that is what the law of the free market says, that should is implying a moral authority to the free market system that doesn’t exist.
Some years ago you might as well say that if I’m stronger than you I should have the right to bop you over the head with my club and steal all your belongings and your women. After all, this what the law of survival of the fittest tells us, which according to the rules of the time was a fair and equtable way to distribute resources. Everyone has an equal opportunity to hit someone else over the head and take their stuff. If you don’t like it than you should just be stronger.
We now realize that this is an unfair way to run the world. The laws of the free market system are an improvement, in being more civilized and having fewer heads caved in, but it basically just replaces economic power with physical power. But it is fair and equitable only to the extent that fairness and equability is defined by the system.