From: mumble@nomail.invalid   
      
   On 06/17/2014 02:21 AM, David Friedman wrote:   
   > On 6/16/14, 4:46 AM, Sea Wasp (Ryk E. Spoor) wrote:   
   >>   Yes. But the employee contribution is usually VASTLY larger than they   
   >> are paid.   
   >   
   > If that were typically the case, wouldn't you expect wages and salaries   
   > to make up only a small fraction of national income relative to profits?   
   > You can look up the numbers pretty easily.   
      
   One can get sidetracked pretty easily by numbers like "GNP" which is   
   probably the largest reason they are published, like the "unemployment"   
   numbers they can be very useful as propaganda measures, ie "lying with   
   statistics".  (Oh look, unemployment is down... yeah, because lots of   
   people gave up looking for jobs thus no longer appear on the   
   unemployment rolls!)   
      
   The largest fixed expense of an average business is either labor or   
   rents, depending on the type of business and whether or not it is large   
   enough to have purchased its property outright.  (Other significant   
   expenses, like raw materials, are not /fixed/ since they only occur on   
   an "as needed" basis.)   
      
   The largest fixed expense of the average employee is rent or mortgage.   
      
   Thus real-estate valuation is a major controlling factor within the   
   economy, with regard both to companies and individuals.  If you truly   
   want a more prosperous country, find a way to cause real estate values   
   to drop without getting run out of office, and good luck with that.   
      
   For an average small business, the largest fixed expense is wages.   
      
   Businesses large enough to have stock traded on the open markets are   
   required to keep up with investors' demands for increasing   
   quarter-over-quarter profits.  A large factor in executive compensation   
   packages is stock options.  The result is that the very executives who   
   are making major decisions for the company are *driven* by the need to   
   keep profit margins increasing, so they can retire out of the abysmal   
   environment they themselves have orchestrated.   
      
   That is why major corporations have outsourced so much labor to   
   subcontractors in other countries where employees can work for less   
   because their rents are less.  Their rents are less because their   
   building costs are less.  As they implement more and more restrictive   
   building codes their real estate valuations will increase and their   
   attractiveness as labor pools will decrease.   
      
   Companies simply do not carry employees who are not making them money   
   because they are not charities, their sole reason for existence is to   
   make a profit, any benefit provided to the world by for-profit   
   corporations is a side-effect of profitability, not a driving force   
   except insofar as it contributes to the company's marketing efforts.   
      
   As Ryk said, the employee generally contributes *vastly* more than he is   
   paid.  At one point a few decades ago I was getting paid about $30/hour   
   while the company was billing my time at $200+ per hour; that is profit   
   for the company, and that is why I had a job, not because the company   
   liked my smile.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)