Does cutting costs always have to come at the expense of employees jobs? Maybe. But it certainly seems that with CEOs raking in millions in bonus dollars, company profit margins greater than ever, and corporate fraud running rampant that there has to be a better way. One reason this method of business continues is because the workers are so far removed from Wall Street. The absurd notion that the boss gets $10 million in bonuses when the company is losing money daily is Anti-American. Our country is founded on the idea that we would not live in a society of kings, queens and peasants. We have moved back to this type of structure under the veil of capitalism. We are no more capitalist here than England was in 1776. We are allowing our system to be corrupted by Wall Street as those who gave their life fighting for our liberty turn over in their graves. We have gone one step further than England. We now have many Kings and Queens reaping the spoils of royalty as the American worker gets squeezed. Our democratic republic is turning out to be more like a monarchy than a democracy. Our current recession has made it clear.
Henry Blodget wrote today how destructive the “cream for the top, crumbs for everyone else” business attitude is:
Henry Blodget wrote today how destructive the “cream for the top, crumbs for everyone else” business attitude is:
The first chart shows that big American companies now have the highest profit margins in history.
The second chart shows that the companies are now paying the lowest wages in history as a percent of the economy.
If you happen to be an owner of a big American corporation, these charts could be construed as good news: You’re coining it!
If you happen to be a rank-and-file employee, however–or someone hoping to be such an employee–this is bad news: You’re sharing less than ever before in the success of American industry.
This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.
Why?
Because the rank-and-file employees of America’s corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.
Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education, entertainment, cars, and other goods and services that big American companies produce.
So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.
And the companies would also, of course
This situation, by the way, is only temporarily good news for the company owners. Because, by pumping so little back into the economy in the form of employee wages (and capital investments–the other area where companies are scrimping), our companies are constraining the growth of the economy.
Why?
Because the rank-and-file employees of America’s corporations are also mainstream American consumers–the folks who account for ~70% of the spending in the economy.
Almost every dollar these folks earn in salaries gets spent–on food, clothing, houses, education
So, if, instead of hoarding their wealth by hiking their profit margins ever higher, companies invested more in employees and equipment, they would help the whole economy.
And the companies would also, of course, help their employees–the people who are dedicating their lives to helping the companies earn such vast profits…
The business-ethos pendulum in this country has now swung so far toward “profit maximization” that most American companies would never dream of voluntarily sharing more wealth with their employees.
These employees, after all, are not viewed as people. They’re viewed as “costs”–cash outflows that just drain financial value away from owners…
Think about that for a minute.
Some of the richest, most revered companies in this country–companies that are currently generating record-high profits–pay their full-time employees so little that they’re poor.
Even more depressing is the fact that concepts like “fairness” and “sharing” are now seen as evidence of bleeding-heart socialism–as though the only way to be a bona fide capitalist is to treat your employees like costs and pay them as little as possible.
Readings these discussed matters in this post was just amazing enough for me to get a lot of information about this aspect more.
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