Archive for the ‘Business and the Economy’ Category

Yesterday, May 1, 2014, a Seattle mayor’s committee approved a phased in $15 an hour minimum wage for all workers in Seattle. The details are complicated by a compromise that included input from businesses and workers’ groups.

The one proposal offered by a business owner is a lower training wage, usually paid for a determinate period of time. The way this is wrong is too many businesses just fire workers at the end of the training period because it is so easy to train new people and take advantage of the lower wage. Sears, which is following Montgomery Wards into oblivion, is famous for doing that to escape paying health benefits in Washington State.
I will grant that any job with a modicum of complexity that takes a good period of time to learn won’t fall prey to this scam. So anyone who isn’t cleaver enough to learn the more complicated job would just have to live with the training wage. Fortunately, this is not a part of the proposal in Seattle and, with vigilance, activists can keep it from happening.

Here is the challenge for activist groups. Don’t waste time trying to get a $15 an hour now. Keep your eyes on the sparrow, and make sure the proposal doesn’t get messed up with bad parts.

As I’ve long believed, companies whose workers are unionized thrive; while those who don’t don’t. Case in point: I once worked for Airborne Express. A coworker proudly announced, “We aren’t unionized. Airborne couldn’t survive if we were.” Not being particularly astute to the workers’ rights I didn’t have a response. Sometimes I feel like the “watcher” in the series “Highlander”. The “watcher” character didn’t have an active roll but did offer counsel to the main immortals. I don’t even try to offer unsolicited counsel. I prefer to follow Dale Carnegie’s idea that “you can’t tell anybody anything. You can only seek to inspire…” At least that’s a paraphrase of what he said. But I digress. The point is: there are two other thriving shippers, Fed Ex and United Parcel Service. And, guess what: they both thrive and are union. And where is Airborne Express these days? It was bought out by another multinational and you don’t see their (DHL) delivery trucks around here any more. So, today I see an article in a side-bar on page A8 of today’s Seattle Times, “Strike vs. Amazon” that the Amazon.com workers in Germany (unionized) are striking for more wages. That would seem to indicate that unions are somewhat strong in Germany (I’d have to check that one out) and, guess what is the strongest economy in Europe? You guessed it: Germany. I googled “unions in Germany” and, boy did I get an education… just by reading the citation headings. One could do a study on the subject by following the links. Another article in today’s Seattle Times tells of the newly elected Seattle City Counsel who proudly proclaims she is a socialist! She addressed a union gathering and advanced an idea she has had for quite a while that the government should use eminent domain and take Boeing and sell it to the workers…

Reading a column in the  July 26, 2011 edition of the Kitsap Sun headlines “The New Party of Ronald Reagan” I am filled with a new introspection of an issue of economics that has been formulating in me for years.

I am reflecting on a short conversation I had with a certain bus driver many years ago at the outdoor part of the then Cafe Destino. She made the point that the good or bad that occurs during an administration’s years are the results of policies of the previous administration. If she is right, then logic would seem to dictate that the economic meltdown during George Bush’s administration might be the result of policies of Bill Clinton’s administration. One of the bragging points that Bill often talks about is his balancing the budget. So, did balancing the budget result in the economic woes that came about in the next administration?

We can have some measure of certainty that the current economic woes are brought about by how Dubya mishandled the economy in his administration. I often remember the political cartoon published early in Dubya’s administration showing a relay race. The runner who is finishing his part of the race hands off a sputtering torch named “economy” to the next runner. Of course the finishing runner was Bill Clinton and the new runner was Dubya. Sometimes I think political cartoons are dead on, in terms of accuracy… especially years later after the ensuing turns of events.

I hope I can see the bus driver sometime in the future to exchange reflections.

If anyone out there remembers the phrase “The rich get richer…” you might remember where it comes from. There is a song (I think it was written by Cole Porter) that says “The rich get richer and the poor gets poorer… In the meantime, in between time, ain’t we got fun?” But go further and you’ll find it was a main theme of Communists (or was it the unions?) in the 20’s and 30’s. OMG!!! the pinko MSM is repeating commy propaganda!!! Can you dig it? Oh, I guess I should tell you how this popped into my head. I was reading a piece “Updated Study (headline:) Top 1% take record share of U. S. Income”. But wait, there’s more. This is a reprint from a N. Y. Times article by Annie Lowrey. I caught it at the very bottom of page 1 of today’s Seattle Times. When the Seattle Post Intelligencer was a competitor to the Seattle Times, the former was considered the liberal and the latter was the conservative.

Thomas Sowell’s column in today’s Kitsap Sun has 12 points; one of which is sensible. So, as one might pan for gold one can read a column like this and find a truth that, while having some profundity, cries for clarification. The paragraph:

“The real egalitarians are not the people who want to redistribute wealth to the poor, but those who want to extend to the poor the ability to create their own wealth, to lift themselves up, instead of trying to tear others down. Earning respect, including self-respect, is better than being a parasite.”

I would add that corporate America is all about efficiencies at the expense of employing those whose talents are meager; but who deserve a living wage. I wouldn’t do away with incentives to better oneself. Certainly a better material life and/or more leisure to pursue mind improving activities is/are (a) laudable goal(s). If the educational community would quit trying to tie every learning experience to job pursuit and promote bettering students’ minds they might get those who perceive the false hope of riches if you learn more, rather to concentrate on achieving a truly liberal arts curriculum.
Yes, liberal arts have earned a negative connotation by the giggling masses. If you would read (reread) Newman’s “Idea of a University” you might realize a more perfect goal for getting a degree. Follow this link for the complete text.
Oops! I started reading the preface and I find this startling message, “…that Knowledge and Reason are sure ministers to Faith.” Could I, by a careful reading of this treatise, be sucked (uh, I mean drawn) back into the fold?
So, my journey to add to Mr. Sowell’s nugget has taken me far afield. Maybe the simple addition of the concept of making more jobs available should be the supreme goal of corporate America. After all, it was Henry Ford’s wise idea to make his workers’ wages high enough to enable them to purchase the product of their labors that should be the supporting concept that would rationalize that supreme goal. The antithesis of that mindset is Walmart’s keeping workers’ wages low so they can only afford Walmart’s products.

While I am loath to associate Republicans in the U. S. congress the possibility of any coordinated effort to achieve a stated goal, let us consider this possibility. After publicly claiming that their most important objective is to make sure Obama is a one term President the Republicans are setting about to fulfill their goal.
Let’s consider the possibility that they are smart enough to know that the economy is the number one issue that the public believes makes or breaks an administration’s claim to success. That being the case how do they make a poor economic recovery a certainty until the next administration? I would offer: every way they can. This would make every seemingly crazy idea about methods to increase economic activity a very controlled and logical progression. Crazy becomes perverse. Perverse becomes antithetic. Negative economic growth becomes a positive orientation when one is trying to ensure an outcome.
Here are some of the ways Republicans are contributing to stifling economic growth.
Increasing the disparity in wealth between the richest 1% and the rest of the American population will contribute a lot towards this goal. It is well established that the periods of wide disparity are also periods of poor economic performance. The real connection beyond just numbers is established by the fact that economic performance is dependant on money circulating in a society. When there is a great concentration of wealth among a few people money circulation is reduced because the few simply do not contribute to the necessary flow of money in society nearly as much as when the majority of the population is using it.
Right now industry heads have said that one of the greatest inhibitors to their hiring is an uncertainty in what to expect in respect to expenditures connected with a large work force. That major expenditure is health care costs. As long as Republicans can create uncertainty by challenging any coordinated method of delivering health care and paying for it they can stifle hiring thus keeping money out of circulation.
Reducing government spending is a major contributor, in the absence of a good job market, to shrinking the money in circulation. As long as the budget hawks, mostly Republicans but too many Democrats who knuckle under the false impression that this is what the public really wants, then shrinking the money supply is a success in stifling economic growth. Don’t forget: as the work force shrinks, so too does the flow of revenues, in the form of taxes, into government coffers .

The latest news about the Earth Quake in Japan and its effect on the nuclear power plants there has the plants developing into a major catastrophe. The removal of workers pretty much eliminates stopping the ever increasing seriousness of the disaster.
It is this development that makes me wonder why they can’t develop robots to enter and make the necessary actions to stop the problem. If someone says that nuclear radiation disrupts electronic circuitry I say use multiple duplicate circuits that continuously compare with each other and automatically decide which is correct. Alternately, use the latest developments to counter the effect of nuclear radiation on electronic circuits. Circuits operating from light signals rather than electronics would be one resolution.

I believe that one of the highest priorities to consider when deciding what not to cut is where money goes that will be returned to the state’s coffers via taxes on the circulation of the very money we dispense.
When the legislature continues to shrink the state’s economy by reducing the budget it is penny-wise-and-pound-foolish. This plays into the paradigm that contributes to the economy’s downward spiral.
If we were to relegate the budget hawks to the flotsam of marginalized spheres we could keep them at bay and get on with the job of providing the very help that is so essential to maintaining a safety net and improving the economy.

…Or, At least the CEO’s Who Aren’t Listening to Economists Are

 

So, who is surprised by the economic “news” that new unemployment claims are jumping? According to the AP article posted this morning, "The very unyielding flow of layoffs now clearly evident discourages any thought that employers are more comfortable with the size of their staffs," Pierre Ellis, an economist at Decision Economics, wrote in a note to clients. I’m wondering just what advice Pierre is offering his clients. Wouldn’t it be prudent to quit laying off clients if you expect the economy to improve? Maybe he is; but his clients are ignoring that advice. It’s all about short term gains.

So, what else is new? In his book “The Reckoning” David Halberstam detailed how American industry, obsessed by short term profits, was being overcome by the 1970’s and ‘80’s Japanese because the Japanese developed 5 year plans in consort with the banks! The concern for profits had to have been in sync because the banks also are, and always have been, concerned with profits.

So, American industry hasn’t learned a thing in the last 40 years! Short term profits remains the only goal. It is stifling the economic recovery.

Another example, this time a work of fiction but nevertheless accurate portrayal of a modern day Scrooge in a picture of corporate greed “Scrooged”, the villain tore down private homes to build a very high-rise office building. In fact he steamrolled homes driving people away. When he got his high-rise building he had nobody to buy what he was producing. How myopic is that? No more than corporations who continue to lay off and refuse to hire in a faltering economy. CEO’s think they can continue to reduce the work force and improve productivity without the slightest concern for the broader picture; which is a continuing weak economy will never sustain economic growth unless there is money in people’s pockets to spend.

“…retailers reported modest sales gains in July, raising concerns about the health of the back-to-school shopping season…” is only a natural result of continuing uncertainty among the still employed along with poverty generated by unemployment.

Later in the article, pregnant with good observations without much advice, “…More jobs are needed to give consumers more spending power to help support a sustainable recovery.” If CEO’s were to buck trends and make bold moves they would spur economic growth and improve their own economic pictures. But as long as they follow the herd and keep employment low they follow a vicious cycle.

It is said that the stimulus funds released by the current administration aren’t enough to spur the economy. That may be; but just how much stimulus would it take to overcome the corporate mindset that absorbs stimulus funds in the interest of short term profits? If banks continue to sit on money loaned to them by the government (stimulus funds should be looked at as a loan because the government will only recoup its investment if the economy improves and generates tax revenues) the economy will never rebound.

There is another factor here that goes beyond the parochial concerns for the economy. Political interests always generate action – or inaction – by corporations. That being said, wouldn’t it be smart in corporate minds to hold the economy back to effect a turnover in Congress? With R’s in power wouldn’t companies gain a stronger position? Never mind the historic evidence that the R’s have little regard for workers. If the R’s regain a majority in either or both of the houses of Congress they will continue to concentrate on concentrating wealth in the top tiers of society and further the divide between the low and middle economic classes and the wealthy.

 

To all employers,

 

Alright you sons to bitches, if I can lay off my employee and arrange for a smooth transition to another job for him you should be able to as well. It just takes a little creativity.

 

I agonized over the financial circumstances that drove me to the edge and resulted in this extreme measure for days. When I made the connections (connected the dots) the answer was apparent. I consulted with the prospective employer, who I knew needed a helper with the skills I knew my employee had, and he was good to hire him. Then, and only then, did I break the news to my employee. I avoided giving my employee advance warning of the impending action I was forced to make to avoid stress and make for an uncomfortable situation on the final days of his employment by me.

 

 The transfer was in a matter of minutes and, after asking my former employee how the first day went (because I care) I have come to the conclusion that my actions bore fruit. My financial picture was improved, my former employee is now making more money than I could pay him, and his new employer has a valuable employee. The potential for improvement for the new employer is great considering the skills my former employee has exhibited over the years he has worked for me. Granted my working conditions will have degraded but that’s the cost of making the hard choices.

 

This must be the way the Japanese were said to have operated for many years; which resulted in a measure of job security for most workers. There must have been built a solid network of employers that enabled this arrangement.

 

So, why wouldn’t you take the time and effort to make this kind of arrangement? Perhaps you don’t care. I can’t believe you simply don’t have the time… make the time! Isn’t that what you tell your employees when they say they don’t have time to perform tasks you want to assign them?