About Last Night...

[ericadawn16]

In January 1914, Henry Ford was making lots of money and his company was hugely successful but he had a problem...

High labor turnover..

What did he do?

He cut shifts down to 8-9 hours a day AND doubled their salaries!

Did this work?

Not only did it stop labor turnover but it allowed the employees to BUY THEIR OWN PRODUCTS!
In turn, they became the best commercials for their products...encouraging friends and family to also save up for a car. Cars went from a status symbol to akin to a necessity.

When the poor and middle class come into more money, they spend it on NEEDS and WANTS. The majority of these NEEDS and WANTS are bought from their very own community directly: friends and family, ensuring that the community continues.

When the rich come into more money, they SAVE it. They put into stocks, bonds, overseas accounts and other things that are NOT directly helping the community in which they live.

They are NOT job creators; the poor and middle class cause the need for jobs and enable them to be sustained. This is why the economy is the way it is even though corporations are reporting record profits and the rich are richer than ever. THEY ARE NOT JOB CREATORS!

We NEED a higher minimum wage and we NEED it tied to Cost of Living just as the president said. In fact he said, "So here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."

When workers are allowed higher minimum wages, companies use it as an excuse to raises prices...negating the raise. However, when minimum wage is tied to cost of living, this is no longer possible. Each raised price will simply raise the minimum wage. Companies will have to come up with other means of dealing with the increased wages. They will think short-term; relocating, outsourcing, shoddier products and laying people off.
In the long-term, it will be undeniable that people are able to buy more and buy when things aren't on sale, improving profits immensely.

Of course, they could also help their bottom-line by getting out of health care completely and leaving that to non-profits and the government instead of tying it to employers...

P.S. Completely Unrelated...I'm enjoying Smash so much more than last year...

Comments

[cp.livejournal.com]

This whole issue is, for me, a big disconnect in the logic of the conservative, free-market capitalist mind. They hate the so-called welfare state, yet they fail to realize that their version of capitalism--and its race to the bottom in terms of labor costs--is what requires that welfare state. Wal-Mart is of course the prime example. A study found that EVERY SINGLE Wal-Mart store creates, on average, a $420k annual need for government assistance for its employees. That's $2.66 billion per year in total. Because they pay poverty-level wages and work most of their people part-time to avoid paying them benefits, the workers have to turn to the government to make ends meet and get health care. Yet were Wal-Mart to pay a living wage and provide health benefits to every one of their employees--and pass every cent of the costs to do so on to their customers--it would be about a 2% price increase. I haven't set foot in a Wal-Mart in years because I despise them as a company, but I'd actually be willing to shop there--and pay that extra 2%--if it meant they would step up and pay their employees enough to survive and thrive.

The basic bargain upon which this nation is built is that companies will take care of their employees by paying them enough to survive (and be consumers themselves, which is the lesson Henry Ford taught), provide benefits so they can have quality of life and give their families health care, and retire in relative security. That bargain has been increasingly broken over the past 30 years or so, and the result is today's staggering inequality of wealth and income, and a shrinking middle class struggling to keep up.

But I don't think anything will significantly change until we get our government back into the hands of the people, and that means eliminating the influence of corporate lobbying and campaign spending. But that will require our politicians to bite the hands that feed them, and I can't say I have much hope for that. Overturning Citizens United would be a great start, though.

[ageofalejandro.livejournal.com]

Damn straight, my friend. Want a rich, vibrant economy? Tax the rich, pay the poor and middle class well. You know how the Republicans like to point back to the 1950s and 60s as a golden era? Uh huh. They were, in some ways. Like the fact that those classes (particularly the working class) got a giant boost in standard of living DUE to this very issue (and also unions). The America we know was built on this. They don't know or don't care about that.

[surreal-44.livejournal.com]

Haha, you're not going to believe this, but I do agree with you mostly on this point. I don't love the idea of the government controlling a lot of what companies do, I do agree that many companies are shooting themselves in the foot by not paying people a wage that people can afford to live on.

The cycle goes on and on -- people can't afford to buy things, so companies are forced to quit producing items, or to shut down entirely, and then more people are unemployed...

I'm not sure that the minimum wage increase will work to fix the economy entirely, since I think that the percentage of people earning minimum wage is generally quite low....maybe 3-4 percent of the population? And I don't know that increasing minimum wage is really the magic bullet to reduce costs of items. But it would help to mitigate some of the burden on the states to support people.

So wow, yay, partial agreement! I'm not entirely an evil conservative, right?

[akashasheiress.livejournal.com]

Pretty much.

[viomisehunt.livejournal.com]

Yup. What you said.

[ragnarok-08.livejournal.com]

Precisely what you said.