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Because industries have fixed prices for employment.
For example, across my industry, all of the CEOs, etc. got together some years ago and decided how much every given position and product is worth.
A position filled is merely a cost component of your business. If the cost of the position is more than the product you produce, then you can not sustain the business. So, naturally a given worth to a certain skill or ability that one provides to the business is quantitatively assessed.
It is smart of a business to seek the best value of their expense. This includes in what they will pay for a given position. The person providing the skills to that position is also seeking the best value. They accept or refuse a given amount of value for their services. With any product, there is a basic sense of natural value. A skill set that requires talent and knowledge will be of more value than one that does not. It is up to the business and the person offering their services to come to this value that is acceptable for both.
Quote:
Originally Posted by TigerLily24
Sure, there are some outliers here and there, but, overall, it does little good to look for a job in another company or even to start one's own business because the market has determined the limits for what they are willing to pay.
And, I'm sure this is not uncommon across other industries.
Not at all. There are many components to a business to which product value alone does not satisfy. A long time ago, I worked for a PC company, the owner prided himself on fair value of business and excellent service. Our competitors were known for their cheap prices alone (even the big companies). They were detached, cold, and mechanical in their business (some due to their size, others because they wanted to do the least possible and make money).
He had a very successful business that was well respected. He had a large list of clientele even during times when PC/printer repair was at its low. It is because his prices were honest and his service was bar none. He sold the business for a very large sum when he retired.
As for what people are "willing to pay", look at how much people pay for their products? It is insane how they throw money away. Now if you are talking about some products (Some Tablets, Console gaming systems, etc...) sure, they are pretty much well established and there isn't much you can do in price competition (they often sell them at cost due to some additional feature that is their money maker).
Even then, you would be surprised how much it costs to make these things (cheap) which is why you see a lot of companies coming out of nowhere that start to take the market by storm (look at some of the TV/Monitor companies) and notice how through this competition monitors and TV's are ridiculously cheap these days.
The service sector is where their is more flexibility. Large corporations have major overheads and they expect a minimum level of profit before they will even bother while a smaller company will do for less and do not have the issues of being so large that the customer gets lost in the shuffle.
You know why most people don't start businesses in protest to their beliefs of how a business should work? It is because it is HARD work. A business owner is the worst paid of their workers until they have established a solid base. Until then, they work for pennies as they spend so many hours and concessions trying to get things rolling. It means working 24/7 and no time for being sick or fun.
I had the privilege of working with an owner from day one of starting his business. I worked for pennies as well because I wanted to be a part of it, to learn the ropes and see how these things work from the ground up (it was a great learning experience and helped me in my pursuits). Let me say, it ain't pretty and it is a HUGE amount of stress.
His business failed though. It did because he didn't have a solid plan, he started hiring on people too early (paying them too much as well), and he started taking shortcuts that his competitors took which resulted in him being "just another business".
The point is, people need to stop making excuses and arm chairing how a business should run. They should go out and run one themselves so they can see what it really entails. Nothing tests your courage, your dedication, and the validity of your ideas until you actually put them to the test. Reality is a harsh mistress, but honest one (it doesn't spare you the hard truths).
Guaranteed failure if business is started on the premise you believe in. Do you have ANY idea about why recessions bring with them a shrinking payroll sizes?
A position filled is merely a cost component of your business. If the cost of the position is more than the product you produce, then you can not sustain the business. So, naturally a given worth to a certain skill or ability that one provides to the business is quantitatively assessed.
It is smart of a business to seek the best value of their expense. This includes in what they will pay for a given position. The person providing the skills to that position is also seeking the best value. They accept or refuse a given amount of value for their services. With any product, there is a basic sense of natural value. A skill set that requires talent and knowledge will be of more value than one that does not. It is up to the business and the person offering their services to come to this value that is acceptable for both.
Not at all. There are many components to a business to which product value alone does not satisfy. A long time ago, I worked for a PC company, the owner prided himself on fair value of business and excellent service. Our competitors were known for their cheap prices alone (even the big companies). They were detached, cold, and mechanical in their business (some due to their size, others because they wanted to do the least possible and make money).
He had a very successful business that was well respected. He had a large list of clientele even during times when PC/printer repair was at its low. It is because his prices were honest and his service was bar none. He sold the business for a very large sum when he retired.
As for what people are "willing to pay", look at how much people pay for their products? It is insane how they throw money away. Now if you are talking about some products (Some Tablets, Console gaming systems, etc...) sure, they are pretty much well established and there isn't much you can do in price competition (they often sell them at cost due to some additional feature that is their money maker).
Even then, you would be surprised how much it costs to make these things (cheap) which is why you see a lot of companies coming out of nowhere that start to take the market by storm (look at some of the TV/Monitor companies) and notice how through this competition monitors and TV's are ridiculously cheap these days.
The service sector is where their is more flexibility. Large corporations have major overheads and they expect a minimum level of profit before they will even bother while a smaller company will do for less and do not have the issues of being so large that the customer gets lost in the shuffle.
You know why most people don't start businesses in protest to their beliefs of how a business should work? It is because it is HARD work. A business owner is the worst paid of their workers until they have established a solid base. Until then, they work for pennies as they spend so many hours and concessions trying to get things rolling. It means working 24/7 and no time for being sick or fun.
I had the privilege of working with an owner from day one of starting his business. I worked for pennies as well because I wanted to be a part of it, to learn the ropes and see how these things work from the ground up (it was a great learning experience and helped me in my pursuits). Let me say, it ain't pretty and it is a HUGE amount of stress.
His business failed though. It did because he didn't have a solid plan, he started hiring on people too early (paying them too much as well), and he started taking shortcuts that his competitors took which resulted in him being "just another business".
The point is, people need to stop making excuses and arm chairing how a business should run. They should go out and run one themselves so they can see what it really entails. Nothing tests your courage, your dedication, and the validity of your ideas until you actually put them to the test. Reality is a harsh mistress, but honest one (it doesn't spare you the hard truths).
I do agree with virtually everything you say here and it is good info for a general discussion on starting or running a small biz. However, I think we've veered off-topic a bit.
That money, not demand, creates jobs. Do the rich run out of money during recessions? Or is it lack of demand that has them reconsider opening/expanding businesses?
That money, not demand, creates jobs. Do the rich run out of money during recessions? Or is it lack of demand that has them reconsider opening/expanding businesses?
Lol, the "one lacking basic common sense" missed the obvious FACT that his imaginary machine requires WORKERS to build it. The demand for products made by the stupid machine created the JOBS it takes to make the machine.
Where do these frigging chucka-chucka people come from?
Exactly, although it probably takes less employees to build the machine vs. hiring unskilled labor to do the work that the machine replaces.
Jobs are created by a demand for something. That demand is consumer driven, and because of that demand, some entity is profiting. Depending on the product, it COULD be said that the rich are creating jobs, because if the product is a 2 million dollar yacht, then the answer is yes.
Quote:
Originally Posted by buzzards27
Dude, the business man, using someone else money, sets up a business and begins making up his products. The consumers buy the products and the businessman pays his workers, his expenses, his investors and takes his profits.
Quote:
Originally Posted by mb1547
That doesn't change the fact that the company won't buy a machine, or hire employees, unless there is demand for their product, and they want to grow their business to meet that need or to increase their profits.
You are all focused on individual consumers. Apparently you don't understand that individual consumers are not the only consumers on Planet Earth. Governments consume. So do armies, air forces and navies. So does business and industry as well as philanthropic groups.
I guess it never donned on any of you that you could operate a business totally outside of the personal consumer loop, meaning no individual consumers purchase your goods or use your services.
Economically...
Mircea
Quote:
Originally Posted by mb1547
Why would they invest their money, or other peoples money, in expanding a business when there's no demand for the product?
No demand that you're aware of.
You are not the only consumer on Earth. There are consumers in other countries. You would want to expand your business to export to those consumers, and once again, those consumers need not be individual people.
I would also invest in order to expand into a new market. I might operate a meat-packing plant that distributes regionally. In order to expand into other geographical regions, I would need Capital to do that, and consumers are not necessarily going to provide that capital.
Once again, I would need to get the expansion money from the "rich."
Just because i did not answer it how you wished does not mean it was not answered
That is why I asked again. My wish is that you answer.
Quote:
Originally Posted by Mircea
You are all focused on individual consumers.
I think the point is... demand drives job creation.
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