American Corporations "don't want workers"

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American Corporations "don't want workers"

Postby Bruce Gourley » Sun Feb 21, 2010 7:17 pm

An article from the New York Times examines the new long-term unemployment trend and cites an economist who makes this astute observation:

“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
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Re: American Corporations "don't want workers"

Postby ET » Mon Feb 22, 2010 12:28 am

American business???? Come now...it's all business. Why should a business want workers? They're needy and costly and often litigious. Just what is the primary purpose of a business, anyway? Is the goal of a business to make money so it can hire workers or to hire workers so it can make money?
Side bar here: I'm not dismissing the hard times of workers, but making a strong objection to the silliness of Bruce's thread title.

I guess my company must be one of those evil corporations "not wanting workers". We're buying Boeing 777s -- capital equipment -- to replace some older aircraft in our fleet. One primary advantage of these aircraft is one less crew member in the cockpit (2 man crew instead of 3 man crew on some older aircraft). Along with the fuel savings of the more modern engines and the bigger carrying capacity (fewer planes needed, thereby reducing the overall number of workers even more compared to 3-man aircraft fleet), one of the top reasons for buying the planes is the 2-man flight crew. Multiply, say, $200,000 in benefits and compensation for a flight crew member over some 15-25 years of operating an aircraft and the shareholders will find it quite beneficial. I may also find it quite beneficial as our yearly bonus checks are tied to company profitability. Our customers may also find it beneficial in the costs we charge them to provide the services which we provide.

Goodness, Bruce, can you -- or why won't you -- even begin to make an economic argument based on rational thought and reasoning or must you always venture into implications of misdeeds, greed, selfishness and other anti-business garbage? :brick: As "astute" as you may think the observation in that article is, it's about as shallow as they come as an implication of misdeeds and bad behavior by ANY business.

As one so enamored with "tight controls" on our economy and tossing around bits and pieces of Adam Smith in support of them, let me ask you this question: If a businessman or entrepreneur is running a business and folks like yourself wish to tightly control them, is it a wiser business decision to invest in capital that doesn't require navigating and complying with your tight controls on the worker-employer relationship or to invest in capital that requires less workers and thereby dealing with fewer problems that come with employing fewer people?

More precisely, of what benefit is it to my company, the shareholders, me as an employee or society as a whole to employ 3 people in flying an aircraft when a capital investment and 2 people can do the job better and more cost effectively?
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Re: American Corporations "don't want workers"

Postby Bruce Gourley » Mon Feb 22, 2010 10:22 am

ET wrote:American business???? Come now...it's all business. Why should a business want workers? They're needy and costly and often litigious. Just what is the primary purpose of a business, anyway? Is the goal of a business to make money so it can hire workers or to hire workers so it can make money?
Side bar here: I'm not dismissing the hard times of workers, but making a strong objection to the silliness of Bruce's thread title.

I guess my company must be one of those evil corporations "not wanting workers". We're buying Boeing 777s -- capital equipment -- to replace some older aircraft in our fleet. One primary advantage of these aircraft is one less crew member in the cockpit (2 man crew instead of 3 man crew on some older aircraft). Along with the fuel savings of the more modern engines and the bigger carrying capacity (fewer planes needed, thereby reducing the overall number of workers even more compared to 3-man aircraft fleet), one of the top reasons for buying the planes is the 2-man flight crew. Multiply, say, $200,000 in benefits and compensation for a flight crew member over some 15-25 years of operating an aircraft and the shareholders will find it quite beneficial. I may also find it quite beneficial as our yearly bonus checks are tied to company profitability. Our customers may also find it beneficial in the costs we charge them to provide the services which we provide.

Goodness, Bruce, can you -- or why won't you -- even begin to make an economic argument based on rational thought and reasoning or must you always venture into implications of misdeeds, greed, selfishness and other anti-business garbage? :brick: As "astute" as you may think the observation in that article is, it's about as shallow as they come as an implication of misdeeds and bad behavior by ANY business.

As one so enamored with "tight controls" on our economy and tossing around bits and pieces of Adam Smith in support of them, let me ask you this question: If a businessman or entrepreneur is running a business and folks like yourself wish to tightly control them, is it a wiser business decision to invest in capital that doesn't require navigating and complying with your tight controls on the worker-employer relationship or to invest in capital that requires less workers and thereby dealing with fewer problems that come with employing fewer people?

More precisely, of what benefit is it to my company, the shareholders, me as an employee or society as a whole to employ 3 people in flying an aircraft when a capital investment and 2 people can do the job better and more cost effectively?


The thread title is a quote from an economist. Your problem is with economists, not me.

And don't forget that if your salary is one day deemed to be an obstacle to greater profits ... you're fired.
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Re: American Corporations "don't want workers"

Postby ET » Mon Feb 22, 2010 10:08 pm

Bruce Gourley wrote:The thread title is a quote from an economist. Your problem is with economists, not me.

Come now, Bruce, don't think I'm so naive. :roll: This fits right in with your historical and documented Baptistlife view of corporations as corrupt entities always seeking to hose the worker and enrich the ones at the top to the exclusion of everyone else. I don't believe it would have even shown up here except to continue your perpetual finger-pointing at corporations and to make another implied need for more central planning from D.C.

Bruce Gourley wrote:And don't forget that if your salary is one day deemed to be an obstacle to greater profits ... you're fired.

So? Is it a better business decision to fire someone because the company isn't making money or to retain everybody and take everybody down with the sinking ship? If I am employed in a position which does not contribute to the profitability of a company, then why should I expect to be retained for contributing nothing economically to the success of that company?

One Friday in April last year, I walked into my job and was barely in my cube for 5 minutes before my manager showed up and we headed to a conference room. I was informed that the company was cutting jobs in an effort to control expenses due to the economic situation. I had been with the company for 23+ years at that time. Fortunately for me, people in eliminated positions in my area of the company had the opportunity to bid on any open positions in other areas of the company. I was one of the minority few to find another comparable job and not end up being offered a part-time hourly position or something I had to take out of desperation. The company shed about 1500 jobs that day. Some people walked in after 20+ years, were informed of their demise, escorted off the property and received a severance packaged and offered job placement help with a job placement agency.

The company was in essence protecting it's bottom line and making sure the stock price was maintained at a decent level. One fear was that if the stock price fell too low, there were other entities with sufficient resources that could step in and write a check and basically take over the company with who knows what ramifications for the other 200,000+ employees worldwide.

My story has nothing to do with capital investments, but I can at least acknowledge the reality that I am not employed as a function of some warped view as business as a charitable endeavor to provide jobs for people, profits be :censored: . That day will live with me the rest of my life and the two weeks following it were no fun as I waited to see if I would end up unemployed, in some hourly job or be able to continue my employment with the company by making a lateral move. I am thankful that the Lord saw fit to allow me to keep a comparable job in another area.

Back on topic. Until you can explain why investing in capital to replace employees is a bad thing and on the whole a bad economic decision for a company, the workforce as a whole and society as a whole -- such as in my previous example of buying aircraft with 2-man crews instead of continuing to used aircraft requiring 3 -- then what have you contributed here by starting this thread?

If we take this issue in regards to the parable of the talents and stewardship, then why would anyone invest their "talents" in a company with management that views the continuing employment of it's workforce as a higher priority than the company actually making money and a return on any investment by the shareholders? That's only going to lead to an under-performing company and one that will cause investors to look elsewhere.
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