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Robert J. Samuelson: Employers have upper hand in today's economy

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  • HaHaHaHa Othello, WA
    Sept. 4, 2013 4:58 p.m.

    This is the cycle we are in. Employers are being careful, coming out of a slowly recovering economy, and dealing with a not business friendly administration, they are in NO hurry to take risks. 7 and 8 years ago, it was the exact opposite. We had an administration that was a friend to business, and we had a rising economy, in spite of rising energy costs. Businesses couldn't find enough skilled workers, and were paying premium wages. We were virtually at full employment. Nothing lasts forever. In hard times employers discover how much dead weight was in their "system" and how much more efficient they can be when they eliminate that dead weight. In trying economies, businesses are also reminded that their biggest cost is = Labor! They find out how valuable an investment in technology to replace labor is. We will eventually get back to the point where businesses are hiring, but even when we do, that won't last forever.

  • sergio Phoenix, AZ
    Sept. 4, 2013 4:09 p.m.

    In part employees and underpaid slave workers are much to blame themselves for their poor economic condition by not organizing and joining labor unions. Labor needs to learn a lesson from rich capitalist and big corporations who all belong to unions: called lobbyists.

  • 2 bits Cottonwood Heights, UT
    Sept. 4, 2013 11:28 a.m.

    marxist,
    Marxism works... as long as all you want is to be able to sustain your existence. Everybody gets just the basics they need to survive. IF that's all you want it works great.

    As soon as anybody in the society wants more than that... it breaks down and you start drifting back towards free enterprise, capitalism, and more happiness and prosperity for everyone in the society. Even the poor in a capitalist society are happier, wealthier, free-er, and better off than the proletariat in a Marxist society.

    Problem is the poor don't realize they actually have it pretty good in a capitalist society (because there is inequality). They just see somebody has more than they have, so they want to end that, and if they can gain power and control of the government, they buy the Marxist method, and end up dooming everyone to a grueling sustenance based existence like they had in the USSR, East Germany, and North Korea, and Communist China (BEFORE the recent drift towards capitalism).

    I'd rather be poor in America today, than living and working in a Marxist system like North Korea, etc. But that's just me.

  • 2 bits Cottonwood Heights, UT
    Sept. 4, 2013 11:24 a.m.

    marxist,
    Marxism works... as long as all you want is to be able to sustain your existence. Everybody gets just the basics they need to survive. IF that's all you want it works great.

    As soon as anybody in the society wants more than that... it breaks down and you start drifting back towards free enterprise, capitalism, and more happiness and prosperity for everyone in the society. Even the poor in a capitalist society are happier, wealthier, free-er, and better off than the proletariat in a Marxist society.

    Problem is the poor don't realize they actually have it pretty good in a capitalist society (because there is inequality). They just see somebody has more than they have, so they want to end that, and if they can gain power and control of the government, they buy the Marxist method, and end up dooming everyone to a grueling sustenance based existence like they had in the USSR, East Germany, and North Korea, and Communist China (BEFORE the recent drift towards capitalism).

    But I'd rather be poor in America, than live in a Marxist society. But that's just me.

  • Utes Fan Salt Lake City, UT
    Sept. 4, 2013 11:23 a.m.

    "Workers do best when strong growth and tight markets raise real wages. On the week of Labor Day 2013, this prospect is nowhere in sight."

    So, the next article that we will see is with a subject of how there are massive worker shortages, and thus hundreds of thousands of foreigners on worker visas are needed. Yes, there is a huge contradiction being pitched here.

  • marxist Salt Lake City, UT
    Sept. 4, 2013 10:02 a.m.

    For labor the problem has been that a worker to sustain himself and his family has had to be an employee, i.e. find a way to sell his labor. This was true of 19th and 20th century capitalism and the communist systems in China and Russia. Somehow this has to change. People have to have a voice at the places they work, that is, be more than employees - be part of management too. We are feeling our way now. Our economic system is evolving, none question that. Sides will contend to direct this evolution. One can only hope what comes out the other side will be acceptable to our children.

  • Ultra Bob Cottonwood Heights, UT
    Sept. 4, 2013 7:00 a.m.

    lost in DC

    I thought we were talking about people.

    How do you tell if an economy is demoralized?

  • Nate Pleasant Grove, UT
    Sept. 3, 2013 11:04 p.m.

    @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.

  • LDS Liberal Farmington, UT
    Sept. 3, 2013 10:32 p.m.

    He who has the gold, makes the rules.

    The love of money is the root of ALL evil.

  • 10CC Bountiful, UT
    Sept. 3, 2013 9:35 p.m.

    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 reform itself.

  • lost in DC West Jordan, UT
    Sept. 3, 2013 6:36 p.m.

    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.

  • Ultra Bob Cottonwood Heights, UT
    Sept. 3, 2013 6:10 p.m.

    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.

  • marxist Salt Lake City, UT
    Sept. 3, 2013 5:56 p.m.

    "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.

  • 2 bits Cottonwood Heights, UT
    Sept. 3, 2013 3:57 p.m.

    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 economy!

  • Kent C. DeForrest Provo, UT
    Sept. 3, 2013 3:12 p.m.

    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.

  • Res Novae Ashburn, VA
    Sept. 3, 2013 2:46 p.m.

    @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 professionals.

  • lost in DC West Jordan, UT
    Sept. 3, 2013 2:34 p.m.

    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 Orem, UT
    Sept. 3, 2013 2:16 p.m.

    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.

  • Ultra Bob Cottonwood Heights, UT
    Sept. 3, 2013 1:33 p.m.

    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.

  • Roland Kayser Cottonwood Heights, UT
    Sept. 3, 2013 1:12 p.m.

    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.

  • Nate Pleasant Grove, UT
    Sept. 3, 2013 11:55 a.m.

    @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.

  • SCfan clearfield, UT
    Sept. 3, 2013 11:22 a.m.

    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.

  • Eric Samuelsen Provo, UT
    Sept. 3, 2013 11:15 a.m.

    Gosh, employers have the upper hand?
    Robert Samuelson, master of the obvious.

  • podunk utah DRAPER, UT
    Sept. 3, 2013 10:55 a.m.

    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

  • Roland Kayser Cottonwood Heights, UT
    Sept. 3, 2013 10:17 a.m.

    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.

  • Kent C. DeForrest Provo, UT
    Sept. 3, 2013 9:42 a.m.

    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?