Published: Tuesday, Sept. 3 2013 12:00 a.m. MDT
Here's the key sentence in this editorial: "Pressure mounted from Wall
Street for higher profits."I can't begin to count the
number of neighbors I've seen laid off by one of the major local players in
the high-tech industry for the sole purpose of making the "numbers" look
better to investors.Here's a thought. What if corporations were
to change their motivation? What if their primary goals were to hire as many
people as possible (while still remaining profitable), to pay them as much
(rather than as little) as possible, and to pay their CEOs exactly five times as
much as the average full-time employee? What kind of economy would we have?
Wall Street's search for ever higher profits is at the root of the problem.
Companies focused on short term share holder value do quite poorly in the long
term. They don't invest in R & D, they don't invest in their
workforce. Short term profits make shareholers happy and they enrich Wall St.
and the CEO class. But they leave the companies, and the entire economy worse
off in the long run. Time to rein in Wall St.
certain industries in the U.S. only have themselves to blame if their employees
unite and strike against them. I have no problem with workers making demands on
companies where ownership and management are short sighted and do not understand
the worth of their employees
Gosh, employers have the upper hand? Robert Samuelson, master of the
Since most companies do their work and create their business on the backs of the
worker, I predict that the quality of said work will diminish as time and
smaller pay goes by. You know human nature. People will produce less when paid
less. Soon, the upper management and share holders will see less profit due to
less production. And then will come the choice. Do you continue paying low
wages and getting medicore production, and maybe go out of business, or do you
pay for quality production and stay in business. One doesn't need an MBA
to see this coming. And of course, foreign competetion will gladly take the
place of any American business that thinks it can get by on paying less and
expecting more. Someday, hopefully soon, American business will see the need to
pay the American worker a "living full time with benefits wage" and not
be able to fall back on the minimum wage excuse and part time workers.
@Roland Kayser "Time to rein in Wall St."Why? If long-term
thinking is truly superior (and I agree with you that it is), why not simply
allow the long-term thinkers to beat their short-sighted competitors? It's
bound to happen. No outside intervention required.@Kent C. DeForrest
"What if corporations were to change their motivation?"Many
of them will, if your way proves more successful than their way.
To Nate: Wall St. punishes companies that are not focused on short term profits.
With enough punishment the CEO gets booted. The next CEO learns his lesson and
figures out what to do to ensure his survival. Also, since the majority of CEO
pay is in the form of stock options, short term profits enrich the CEO class,
while long term problems won't occur until after they retire.
The Human race, its civilization, its continued existence depends on having a
system to fairly and dependably distribute the benefits of civilization to the
members of the civilization. Business: A system allowed by the
civilized group to provide sharing of skills, talent, energy, knowledge,
protection and wealth within the group. It is desired that this be done
fairly and according to the specifications of the group. Business
Operation: A privately owned and operated unit that serves the civilized group
according to the specifications of the group. Employee: An
individual person who becomes a voluntary slave to a business operation in order
to trade physical and mental labor for money. Vender: An individual
or business operation who is not required to become a voluntary slave in order
to trade goods or material for money. Consumer/Customer:
Individual or group willing to trade money for the product of the business
operation. Usually the people of the group, but can be anyone in the world.
The consumer is the source of all income for the business operation.
Kent C. DeForrest: By all means, give it a try!Go take out as big a
loan as you possibly can, take huge personal risks, and start your own company.
Since few companies are profitable during their first few years, be willing to
work for slave wages yourself while puting in long hours to get the company
going.Once you do all those things and are one of the lucky few to
actually succeed and get your company off the ground, feel free to try your new
business philosophy. Hire lots of people and pay them as much as you can.
Don't try to earn any more than one of your workers who joined after the
company was already successful and took none of the risks.Let us all
know how that works out for you.
Labor, especially unskilled and low-skilled labor, is a commodity. Anyone who
thinks otherwise is only fooling themselves.Kent,A poor one.
There would be no investors willing to shell out their capital if they do not
see a return commensurate with the risk taken.Ultra Bob,The
human race, its civilization, its continued existence is dependent upon
allocating rewards according to the merit of the individuals within that
society. Equal distribution regardless of merit demotivates until no one does
anything, expecting to be taken care of by everyone else.
@JoeCapitalist2,I doubt most people have startups in mind when they
criticize companies for placing profits ahead of a workforce. We're
speaking of Wall St. and CEOs who are long past having to raise capital, assume
risk, or work for slave wages themselves.It used to be that
corporations had competing duties to balance. They had a duty to their
employees to provide a decent wage and benefits in exchange for decent work.
They had a duty to to the larger community by providing jobs and being a
positive force locally. And they had a duty to make profits. This is the
balance that existed throughout the mid-20th century when the US economy was at
its height. Economists like Milton Friedman turned that upside down
starting in the 70s, insisting that profits are the one and only corporate duty.
The balance was upset, workers treated like disposable assets, and communities
seen as a nuisance. Making a profit in the short term instead of adopting a
long term strategy became the norm. The evidence is in: this approach has not
been kind for American workers, even for educated, middle-class, white-collar
Looks like my "what if" got a few people thinking. It was a "what
if," but we can easily see where short-term, greed-motivated thinking is
taking us. The short-term, profit-seeking mentality generally doesn't see
far enough down the road to realize that it is ultimately self-defeating.Our system is very broken and is growing more and more dysfunctional as
time passes. We need to stop looking for answers within this dysfunctional
system. None of them are adequate, particularly if you consider the fact that
our system is based on the practice of using up resources at an increasing pace
and turning them into waste at the same pace. Time to look outside the old
capitalist box. The Mondragon cooperatives of Spain are a good place to start.
Different motivation, different structure, different methods. All very
realizable in our modern world, but much more humane and equitable.
Why would it be a big revelation to anybody to learn that employers have the
upper hand?I mean... they're the boss. If the economy
struggles, do you think their going to layoff themselves? Probably not.Can employees fire their employer? Only by moving to a new job.So why is his such a big revelation?Of course employers have
the upper hand in today's economy. Employers have the upper hand in EVERY
"What if their primary goals were to hire as many people as possible (while
still remaining profitable), to pay them as much (rather than as little) as
possible, and to pay their CEOs exactly five times as much as the average
full-time employee? What kind of economy would we have?" Well, it
won't happen. You ignore the origins of profit itself and dynamics behind
profit maximization. Corporations and capitalists in general are driven to
maximize profits no matter what the cost to employees, society, morals, or the
environment. That's why a new socialism is the only possible solution.
Without such there is no solution, and the system will collapse.
Actually equal distribution, equal worth, equal treatment seems to work pretty
good for families and many other groups. Your prediction of demotivation has no
known and proven examples. I think people feel better, work better and do
better when they feel equal. The example of people receiving
benefits happens millions of times every day when a child is born. If there was
ever a lazy, ner-do-well that takes lots while giving little, it’s got to
be a baby.
Ultra Bob,families and "many other groups" are not economies.no known or proven examples? - try the USSR, which collapsed. The
chinese economy did not take off until there was some privatization of
profit.but thanks for comparing libs with babies.
JoeCapitalist2:I think the answer to your challenge may have to come
from the demise of Wall Street as the financial engine of the economy, and
movement into the US of foreign owned companies that excell with a more
human-centric view of laborers, careers, families and the future. This would
include a more patient, long term view of investment prospects, and Americans
more willing to look at value beyond their immediate utility. I
will shop at Costco whenever possible, in part because their employees are
reasonably well taken care of, and it shows in their capacity and willingness to
help. Walmart represents the retail sector bottoming out, with burned out,
incapable employees who act like they're paid half of what the Costco
workers make, which is true.The dysfunction, social problems, low
birth rates and an increasing cynical snicker at the American Dream will give
way to a more superior form of Capitalism, probably led from outside the US,
because our system is too entrenched and self affirming at the highest levels to
He who has the gold, makes the rules.The love of money is the root
of ALL evil.
@Roland Keyser "Wall St. punishes companies that are not focused on short
term profits."At some point, they may come to the realization
that in so doing, they are only punishing themselves. Then things will change.
But the essential ingredient is liberty. Without liberty, there can be no real
improvement.The most short-sighted action of all would be to replace
free enterprise with any other system.
lost in DCI thought we were talking about people. How do
you tell if an economy is demoralized?
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