The fundamental flaw in the Western business system

a reply to: BuzzyWigs
www.forbes.com... ition-turn-things-around/

Looks like walmarts sales are down and they are racing to the bottom. Seeking ownership of stores that are normally considered sub Walmart.

Sad.

a reply to: pheonix358

I wonder what system will rise out of the ashes.

We are entering an important period in our American society in which I believe the half-assed capitalist system we have now will transition to a communist/capitalist economy. Yes, communism and capitalism can coexist.

Neither economic infrastructure is the "best" choice and has failed throughout history because we were not realizing that a mixture of both is ideal.

Paying crap wages when the cost of everything in life is escalating will be the downfall of big business and tight-arsed bosses.

When working people have to rely on working benefits just to survive there is nothing left to spend on consumer goods. When a business has no demand for its product then how can it remain viable?

Money has to keep on the move to maintain a good economy. It's a well-known fact that the workers on the lowest rung of the pay ladder are the backbone of a healthy economy, because they tend to spend their money rather than hoard it (unlike the rich), and every penny they're paid is returned into the economy when they spend it.

The western economies are struggling due to the low paid workers not being paid enough, they can't spend what they don't have, the money has all but stopped moving and this stops the economy from improving.

People on benefits are vilified for being a burden on the taxpayer, and more and more people are being kicked off benefits and left with no income at all. So now there is even less money on the move because benefits money is spent straight away and is returned to the system immediately. No benefits = less money moving. Crap wages = less money moving. Less money moving = tanking economies.

The only people with any spare cash are the wealthy, but they won't spend it.

Give people more to spend and businesses will start to pick up, the money will start moving again.

The greed of the wealthy will be their own downfall, if there's less money around there's less profits for them and their businesses. When everyone is eventually working for free, who will a business sell its product to? Not the rich, because they won't spend.

Pay people more and economies will improve substantially in a very short time.

I think many of you have overlooked that the "Owners of Capital" want you DEAD before 60 years old. If people had a shorter workweek, higher wages and less stress, they would live longer. That's the LAST thing that the "Owners of Capital" want to happen. Best case scenario for them, is for you to work 60 hour work weeks, from ages 18-60, put all your money in your 401K & home mortgage, neglect going to the doctor and then suddenly drop dead of a heart attack before you can use your social security, medicare and drain your 401K.

Why do you think there is employment age discrimination above 50 years old? Why do you think health insurance premiums skyrocket after 50 years old? ALL because they want you dead before 60. Having a society that deals with people reasonably as their age, increases the chances that these people will be happy & live beyond 60 years.

I will recap what I have explained here on ATS a MILLION TIMES!

Up to the 1940 a person could get just about any job with an 8th grade education, but today you need a BA or Masters for entry level.

Why?

Because the government & big business figured out a long time ago that populations would certainly increase over time, but due to technology advancements, the availability of jobs would not expand to meet that population growth. There is a DEFINITE reason they don’t want people dropping out of high school and then at the same time, encourage those same high school graduates to attend junior college, then a 4 year university and finally a Masters degree or PhD. Government strong-arms this concept because it DECREASES the amount of people looking for full-time employment at the SAME TIME, chasing after jobs in a market that CANNOT provide employment for everyone whom is looking, that are able, qualified for and willing to work.

Look at it this way, when people could get a job with an 8th grade education, they went out and did it as soon as possible (opportunity cost). Then jobs got scarcer and the minimum requirement became a high school diploma, adding 4 more years of people NOT Looking for jobs within their cohort. Then jobs got even scarcer and the minimum became a 2 or 4 year college degree, adding an additional 2-4 years of people NOT looking for jobs within their cohort. Now jobs are really scarce and may require a Masters or PHD, adding an additional 2-7 years of people NOT looking for jobs within their cohort.

Basically due to the way the economy has been structured TODAY, we are looking at young people within their cohort whom are NOT looking for full-time, career type, employment for 6-15 YEARS, beyond K-12, all while they finish more school!!!

This has been done ON PURPOSE, to keep the number people seeking employment lower. In 1920 after 8th grade everyone who was able, went out to look for work and typically found it. That’s simply NOT possible today under any circumstances. Easily accessed welfare will soon add another 1-3 years of people within a cohort, to those “not seeking employment”. Note this will NOT be to the specific detriment of society, but means to continue to mask the illusion that jobs and upward mobility are still available. So, if someone gets a graduate degree and collects 1-3 years of welfare on top of than, that’s ONE less person competing for scarce jobs. The extra years of welfare are then acting in the same way to the larger economy, as the previously increased minimum education levels for employment. The real goal is decreasing the number of able-bodied applicants out on the job market at the same time, but also not decreasing the supply of "potential workers" who's mere existance drive wages down for EVERYBODY. Keep in mind this cohort of people "not pursuing full-time employment" also includes those in Prison, Government pensioners/SSI and the disabled on government assistance. The reality is if everyone needed to go out and “get a job” or “start their own business” TODAY, as many “capitalists” and "entrepreneurs" suggest these days, we would ALL be making 0.25 cents a day.

The “owners of capital” have already decided, FOR US REGULAR PEOPLE, that there are going to be LESS jobs available in the NEAR future, due to increased automation and modern, corporate, labor cost-cutting measures. These measures will affect and include ALL contract work, ALL self-employment opportunities and ALL small businesses, NOT JUST payroll laborers.

Uber investor: the “1099 economy” is here regardless of whether it’s good for workers

Its easier to “pay less” or “nothing at all” to contracted or indentured “labor” when there is another willing laborer/slave, waiting in the wings, to do the work for less or nothing at all. In the past when there wasn’t enough money to go around to pay both wages & PROFITS, the “owners of capital” simply brought in more indentured servant immigrants (Irish, Italians, Chinese, etc) or used flat out slave labor (Blacks, Native Americans, domestic prisoners, POW’s, etc). The only difference between now and then is that “owners of capital” can’t LEGALLY have slaves or indentured servants. The mechanisms today that replaces slaves and indentured servants are the following: longer than needed formal education for basic employment, off-shoring of labor, forced retirement, prisoners and welfare.

The largest “recorded” wage increase to happen in history, for non-land owing, wage-laborers, post the introduction of fiat currency, was after the black death pandemic, in the 14th century, especially in post-pandemic England.

But, how is that possible?

Because “the owners of capital”, post the black-death-pandemic, still needed wage-laborers, but there was a HUGE shortage of able bodied people. So, in order for ANY work to get done, they had to pay the peasants and other undesirables, more money, SIGNIFICANTLY MORE. This principle is still at work today, when you take the time to recognize that sizable portions of the population are actively discouraged from participating in the full-time labor market. This is easily done, by throwing people in prison, forcing them to attend formal school longer and allowing more people to claim themselves as disabled or collect long/short term welfare.

Here is some more history to consider from the 14th century, the Peasants Revolt was triggered by the "Statute of Labourers 1351". By 1381, the sustained wage growth for non-land owing, wage-laborers was rising so quickly that the English parliament, a few decades post the Black-Death, under King Edward III, introduced the "Statute of Labourers 1351". This statute was used by the "Owners of Capital", as an artificial means to drive down the wages of non-land owning peasants. Despite market conditions signalling the need for increased wages.

The Statute of Laborers; 1351 ("Statutes of the Realm," vol. i. p. 307.)

Think about that for a minute, the MARKET signaled that wages should have been higher, due to actual labor shortages caused by the Black Death, but the “owners of capital” still didn't want to pay it, so they wrote a law saying why they didn't have to conform to demands of the market. That's where we are today, a form of Neo-feudalism, driven by Fascist ideology and practices. Sadly a lot of people believe that events like the French revolution and the Peasants Revolt have had NO impact on the few freedoms that regular people do have today. MANY people today truly, especially Americans, believe its all unrelated stuff that has no bearing on their current circumstances.

I think it's the shareholder aspect that is ruining us.


Because of wallstreet profitable is no longer profitable.

It did only matter if your company made a profit. Now it needs to make more of a profit then it did last year or the people who bought stock this year don't make money. This has made a money grab where your buisness is never profitable enough. Well you can't make materials cost less so it's created a vicious circle of buisnesses trying to save money by repeatedly cutting labor.

Actually, wanna know what destroying everyone's wages?

It's contract workers... And not the workers themselves, it's the fact they should of been HIRED ON AS FT employees and not left to trickle in whenever they can be hired on. While the contract for the workers is basically fought over by others wanting to do it cheaper then the other guy just to have work.

So someone can obtain a ft position one year with that contractor but the next year they can't since another contractor bid to do the job cheaper. That just means that no one in that sector can get paid more, since it's all based on the bidding of the job anyways.

Sorry but, if you want to work, you should be able to, however that is not true, you don't even get to work if you want to anymore, working is a luxury.

I believe to place blame on the corporation is the epitome of ignorance. First, what of the partnership? More importantly, consumers/society literally empower the corporation. Without your business they could not be the bane of your existence. Economics has a term called a "rational consumer." Capitalism works just fine when rational consumers seek the best product at the best price. It's only when irrational consumers drive the market do problems arise and persist. I only wish you haters of capitalism would be honest with your assessment and claim it isn't capitalism that failed but rather the people have failed capitalism. That society as a whole is too stupid to be the rational consumers capitalism needs and therefore you advocate a different path.

Have you ever wandered down the street on a week day and thought to yourself "where are all the people?", only to realize they're probably all at work? Almost all of us work at the exact same time, typically from Monday to Friday, 9 till 5. Then comes the weekend and suddenly the streets are full of people during the middle of the day. Everyone is out and about, spending their money.


This was true in my area until about 5 years ago. Now I find it is always busy. You wait at a stop sign with 5 cars and no matter the day people are out and about. I now find myself asking "doesn't anybody work anymore" and "how are people out shopping all the time and not working"

originally posted by: Marshww
I believe to place blame on the corporation is the epitome of ignorance. First, what of the partnership? More importantly, consumers/society literally empower the corporation. Without your business they could not be the bane of your existence. Economics has a term called a "rational consumer." Capitalism works just fine when rational consumers seek the best product at the best price. It's only when irrational consumers drive the market do problems arise and persist. I only wish you haters of capitalism would be honest with your assessment and claim it isn't capitalism that failed but rather the people have failed capitalism. That society as a whole is too stupid to be the rational consumers capitalism needs and therefore you advocate a different path.

Remember this is America, we have no labor protection, no union representation and no access to collective bargaining.

So yes...both consumers and employees will not have choices in the future because purchases will be mandatory in some way. "Click-Wrap Agreements" and a cashless society will make that transition easier for the "Owners of Capital" to force on the general populace.

Policies structured like Obamacare should have taught us ALL how these kinds of scenarios will play out. Obamacare is merely the test run of how to implement legislated purchases on a large scale. "Click-Wrap Agreements" coupled with a cashless society will only strengthen similar policies in the future.

What do I mean exactly?

Many forget that we now live in what "could" be considered a fascist country, with oligopolies running it behind the scenes. What usually results, is a situation where the "owners of capital", can and will "legislate" mandatory purchases in the future, if revenue does not match their expectations or projections (for the good of the nation of course, i.e., Too-Big-to-Fail).

So for example, if someone chooses not to buy unneeded goods or services, they will simply pay a "penalty" at tax time or some scheme involving a "negative interest rate". When the "owners of capital" run out of consumer goods that they can "strongly coerce" people to buy, in order to go to work, such as, gasoline, internet connection, car insurance, bus/subway fare, cell phones, suits/uniforms, soap, deodorant, razors, etc, one day, they will simply make it law that you have to buy them, in certain quantities before tax season (the current Healthcare dependent, Flexible Spending Account, FSA, is just the pilot program, one day we will have an FSA for ALL goods and services, and you can bet they will be use-it or lose-it). Also, since you won't own these new "digital cars" or "digital media" that means you could be billed for "damage to the vehicle or product" from the "real owners" at any time.

You will not be allowed to be frugal in the future because the "owners of capital" will take close to the same amount back, when a person tries to save money by reducing purchases, in the form of "tax penalties" or other method (cashless, digital currency,, negative interest rate, deductions from bank accounts whenever the "owners of capital" see fit). A cashless society, dominated by "click-wrap agreements" is the easiest way to structure "forced purchases" into the larger economy. Another scenario in the future is when someone chooses "not to buy" and then doesn't have the proper "proof of purchase" coupon, etc, to prove they bought these items, in the required quantities, when tax fillings come due, the IRS will have some way to calculate the amount "you should have purchased" (sounds a little like a college FASFA in reverse).

Look at solar roof panels, for example, many local governments are taxing people for installing them because they reduce dependence on local utilities, which in turn drive down privatized revenue being collected by the contract companies hired running the utilities.

a reply to: ChaoticOrder

I like your solution, and do think it will be applied more in the future. Some companies have already adapted the model, though they don't frame it the same way. Basiaclly what you want is high productivity, so it makes little sense to overwork and piss off your employees. You want quality over quantity. If you can get 3x the productivity per hour by paying 20% more per week while working them 20% less, you'd be a fool not to adopt the model.

What we have now is people clocking in, and checking out in many corporate roles. They appear to work when needed, do some work for sure, but overall are way below their true capacities, because they feel unappreciated, and spread that back into their career. Many people still work like hounds, but I don't know that to be the majority anymore. People get burned out of giving it their all, and getting little in return.

My buddy showed me his end of year tax statement for a small retail business that he and his partner built up over many years.

They generate/pay $250,000 in taxes and make a combined $75,000 a year. Now that they are facing impending 12-15$ minimum wage, they, like many small businesses, are looking to layoff workers and just put more work on their own backs when/if it happens.

How much do these hardworking business owners deserve? How much does their staff deserve of what they dont have?

Systems broken. It's an oligarchy. The middle and lower classes are being put in the thunderdome by the mega-rich, the mega-corporations who can shelter their income; all the same people who run/own the government. 

If they can keep us fighting ourselves, instead of them, they win. 

a reply to: ChaoticOrder

Making people work as much as possible for the lowest wages possible will produce a booming economy

Well, I am going to have to discredit your whole post because it's based on a straw man theory of the western business system.

Our economy is based on paying the going rate. Your theory makes two wildly false assumptions.
A) Every company pays as little as possible
B) People are incapable of negotiating a wage they're happy with

Starting with A; there are large pay ranges within nearly all trades. The only occupations that have low pay ranges are occupations where there is little to no skill or knowledge necessary. Wages in all fields are based on one thing: the amount of value you add to the company. If your skill level is too low and they're paying you too much, you are eating into another persons wage. Ideally you should bring x value and be paid the same as that value. Obviously there will be a range in most cases.

The fact that there are even pay ranges completely decimates the idea that the western business model is to pay people as little as possible.

Moving on to B; this may be the reason for the above pay ranges. I don't know. But the picture you paint is that of a slave master forcing you to work for the crumbs he'll allow you. Which isn't the case at all. Going into a job you have influence on your pay. You don't have to work for them. You don't have to take $7/hr for an engineering positon. Sure, you can if you like, but you don't have to.

You need to rethink how business works, because the grasp you've shown on this concept is lacking.

originally posted by: pl3bscheese
a reply to: ChaoticOrder
What we have now is people clocking in, and checking out in many corporate roles. They appear to work when needed, do some work for sure, but overall are way below their true capacities, because they feel unappreciated, and spread that back into their career. Many people still work like hounds, but I don't know that to be the majority anymore. People get burned out of giving it their all, and getting little in return.

Exactly, hard work is a thing of the past. There are those who do it, but for the most part people do as little as possible at work. They are there to collect a pay check.

I blame this on the China effect. The average American/european worker seems to be able to produce about the same amount of work in about 1/3 the amount of time. Because we are better educated and free*.

a reply to: Wetpaint72

Looks like walmarts sales are down and they are racing to the bottom. Seeking ownership of stores that are normally considered sub Walmart.

Sad.

Ermm......
SAD? That sales are down - nono - that's GOOD that sales are down.

I did notice today that they now have a 'marketplace' similar to 'amazon.'


Are they scared? No. Are they sweating? Maybe.
Do they deserve to be vilified and called out?
ABSOLUTELY



imo

a reply to: ChaoticOrder

The fundamental flaw in your argument for either a higher minimum wage OR less hours is that you pick and choose the sources for your problems, as if economic problems must be related to an incorrect salary mandate. Correlation is not causation, first lesson in statistics.

The most fundamental flaw in your argument is it is a basic violation of human rights. It is not for you to choose how I can spend my money or how I can spend my time. It is not your place to tell me how I write my contracts with other consenting adults. People's decision to do that can ONLY end badly because its a moral wrong, and moral wrongs never have good endings.

You can't make me work less. I'm no more your slave to be forced to work more as I'd be your slave to work less according to your demands. Sorry, but your orders are simply rejected as a violation of my rights. I like working a lot. If you don't want to work, then don't. But leave my decisions to me, please.

The reason I've been telling people for over a decade that the America will economically DIE, is excessive government spending that destroys the middle class, while the problem was also excessive government debts would keep them down and prevent a recovery of any kind at and point in the future.

So, the solution to this jobs problem you are worried about is to reverse the damaging government spending back to the levels of economically prosperous nations, which would be 15% or less, allow people to opt out of social security because it is a garbage system run very badly and therefore people can save their own money much better than that, and convert to private commodity-backed money instead of the Federal Reserve Banking System. These policies would revert the United States to prosperity virtually overnight.

Just like bankruptcies and common sense got Iceland under control, so to can the same policies be applied to the USA to get it under control.

Oh, and the number one change, the number one solution, is to convert the United States to a government that actually has consent of the governed. That is a generally permanent solution to low wages.

a reply to: wayforward

The most fundamental flaw in your argument is it is a basic violation of human rights. It is not for you to choose how I can spend my money or how I can spend my time.

I never once said I think we need more regulations to enforce a higher minimum wage or anything like that. I'm simply saying that large corporations should focus less on trying to squeeze out every work hour they possibly can from their employees because there are plenty of good workers around. We seem to have this mindset in the Western world that the majority of our life should consist of working and I don't see why we should maintain that attitude as society advances.

Of course I probably did exaggerate the issue some what, I got a bit carried away as I was writing it. As other poster have mentioned, many towns and cities are nothing like what I described and the streets are busy any day of the week, and many people have jobs which allow them to work minimal hours for a great pay. But for a lot of people that isn't the case, and I think if some of the large corporations out there were just a bit fairer it would boost the economy significantly.

a reply to: Marshww

Economics has a term called a "rational consumer." Capitalism works just fine when rational consumers seek the best product at the best price. It's only when irrational consumers drive the market do problems arise and persist.

Well I haven't studied economics in detail but clearly we don't live in a world full of rational consumers, in fact I would say that the immense popularity of highly overpriced Apple products prove the majority of people are irrational consumers who care more about brand names than about the price to value ratio. Also I should point out that I am a believer of free market capitalism and small government which tries to maintain a low level of market interference. I just don't really think the system we live in now is a free market because the overly large government and mega corps have too much control over what the market does.

On even more than that, I just don't think it's healthy to interpret capitalism to mean "be as greedy as possible". Those mega corps that employ a huge number of people and pay them next to nothing need to realize the impact that has on the economy. It causes a huge degree of inequality to occur and as result a large percentage of the population have very little spending cash to inject back into the economy. That restricts the velocity of money flow through the economy and it stagnates as a result. Essentially it's the result of excessive hoarding by the excessively greedy, if they hoard too much of the money there wont be enough left for the rest of us. That is the prime reason the federal reserve has been doing all these extreme quantitative easing schemes for the past few years, they're basically trying to pump more money into the economy to keep things flowing.

a reply to: ChaoticOrder

if they hoard too much of the money there wont be enough left for the rest of us.

You were right when you said you hadn't studied economics.
Money is not a zero sum system.

originally posted by: Phage
a reply to: ChaoticOrder

if they hoard too much of the money there wont be enough left for the rest of us.

You were right when you said you hadn't studied economics.
Money is not a zero sum system.

Could you please expand a little on what you mean? I've followed Bitcoin for quite some time and it's often said that even if 99.9% of all Bitcoins were hoarded away, the remaining coins would still be enough for Bitcoin to work because each coin is divisible for 8 decimal places. Is the point you're making something along those lines? If so then I would agree with you, but clearly there is nothing healthy about 99.9% of all Bitcoins not being in active circulation. For example a whale could come in at any time and dump a huge number of coins on the market, causing it to collapse.

a reply to: ChaoticOrder

Could you please expand a little on what you mean?

What I mean is that a fluid monetary system (such as we have) means that the amount of money is not fixed. Just because someone else has a lot of money, it does not mean that someone else has less (that's the result of other factors). With a fluid system more production of goods (and services) allows the existence of more money. That is what allows an economy to expand.

On the other hand, in the case of a fixed monetary system (sort of like bitcoin), there is a fixed amount of money available in the system, no matter how much production there is. It is, as you pointed out, an nonviable system. No room for expansion. No room for growth.