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Old 08-06-2010, 01:40 PM
 
608 posts, read 1,243,816 times
Reputation: 468

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I have been saying this all along. We are a service economy not a manufacturing one. We depend on people with money to buy and sell goods. A majority of people receive money through wages earned. Whether you are an illegal or not, it does not matter. The more money spent, the more jobs that can be created. The economy is an ugly triangle, the worker, the government, and the company.

The people who are working now are for the most part working harder then ever. Companies are receiving the same productivity from their reduced workforce because more workers are working longer hours. Without any union protections, workers are afraid to step up and say no to longer hours, for fear of losing their jobs. As a result, workers are getting burned out. Then the unemployed are getting depressed, they feel they have no way of getting a job. These are the people that fuel the economy, they spend the money that keeps this country going. Not the super rich. The rich will continue to spend regardless. Just look at an excerpt from today's article from the AP:

"Many companies appear to be getting more out of their current employees rather than adding new staff. The average work week increased by one-tenth of an hour to 34.2 hours, the department said. That's up from about 33 hours in the depths of the recession."

Even if government did nothing, or stepped in and gave companies everything they wanted in incentives or they didn't tax anyone anything, the problem still remains. If government didn't spend a dime to help out the economy, like the tea baggers want, it won't help if people do not have the money to spend. Government is forcing its own workers to sacrifice, because of lack of revenue. Government employees are taking furloughs, working days without pay, receiving IOUs and in some cases losing their jobs. Who pays for these workers? The taxes do. So if these people don't have money to spend how are you going to make up that gap if you don't raise taxes on those that have money? You can argue that government needs to cut spending, but state and local governments at the least have cut so much already.

You can't blame the government. Look at the two extremes. If government did nothing (which is the conservative view) lowered taxes to 0, and had no government intervention at all, would that be any incentive for a company to hire workers? Probably not, since now the money they would have spent on taxes, turns into profit. Companies now are already making profits and not hiring people.

Look at the other extreme, government steps in and does everything it possibly can to spend money and spur growth. Would that force a company to hire workers? Again probably not, since that is what people fear is happening already. Interest rates are at their historical low and can't get much lower than they are now, is that spurring companies to release its cash and hire workers?

The third part of the triangle is what is broken, the companies. Corporations are refusing to hire workers, and they are hoarding cash and most are making profits, some are making record profits because they refuse to spend the money and hire people. Without companies putting money into the system via workers, there is less and less spending power. If people don't purchase enough widgets then the widget factory goes under, the widget factory lays off a number of people and you have even less spending power. How do you force a company to hire workers?
So Government is not the problem, nor is it the solution. The problem and solution is also not the worker, its the company. I don't know how you get companies to hire workers when they are making huge profits.

Companies hire at slow pace for 3rd straight month - Yahoo! Finance (http://finance.yahoo.com/news/Companies-hire-at-slow-pace-apf-3661001824.html?x=0 - broken link)
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Old 08-06-2010, 02:48 PM
 
Location: Near the water
8,229 posts, read 12,174,000 times
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They are hiring workers, just not in this country.
Here we are once again at corporate greed.
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Old 08-06-2010, 03:14 PM
 
Location: Copiague, NY
1,500 posts, read 2,556,274 times
Reputation: 2404
<"Corporations are refusing to hire workers, and they are hoarding cash and most are making profits, some are making record profits because they refuse to spend the money and hire people".>

Why would ANY company that is making "record" profits, with whatever staffing they have, ever want to hire more employees?
More employees do not necessarily mean greater profits to a company that has it's act together, often the profit margin decreases
when management is spread too thin to properly supervise workers and employee benefits are another "give-back" that ultimately
comes out of the gross profit of the company. I do agree with your observation about America becoming a service oriented workforce
but that is the price we have paid for the outsourcing of one of our greatest industries, the manufacturing industry. Even the biggest
corporations in America are getting their brand name products manufactured overseas, to them there are benefits which are detrimental
to American workers but because their bottom-line is profit, those workers be damned. No, the corporate profiteers, certainly are never
looking to rock the boat, most especially, in economic times as fragile as these times are.
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Old 08-06-2010, 04:38 PM
 
286 posts, read 642,721 times
Reputation: 483
We manufacture more here now than we ever have. Rather, we just need fewer people to do it.

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Old 08-09-2010, 03:37 AM
 
28,741 posts, read 31,400,949 times
Reputation: 29880
Quote:
Originally Posted by LongIslandEddie View Post
<"Corporations are refusing to hire workers, and they are hoarding cash and most are making profits, some are making record profits because they refuse to spend the money and hire people".>

Why would ANY company that is making "record" profits, with whatever staffing they have, ever want to hire more employees?
More employees do not necessarily mean greater profits to a company that has it's act together, often the profit margin decreases
when management is spread too thin to properly supervise workers and employee benefits are another "give-back" that ultimately
comes out of the gross profit of the company..
Yeah, I was thinking the same thing. The other thing is....most hiring is not done by large corporations anyway. It's by smaller businesses. And those smaller businesses are NOT raking in the record amounts of cash. Those smaller businesses are also afraid of the effect of health care reform and tax increases, so I think many are putting more cash aside for an increase in those expenses. This is something your average worker doesn't get. Average Joe (who, on average, is overweight or obese) acts as if he pays most of his health care premiums, but the reality is his employer pays the lion's share of it. That especially hurts the smaler companies that do most of the hiring because they pay higher rates than the big companies do.

The other factor not mentioned is that while these corporations have large amounts of cash on the sidelines, they also have record debt levels.....Yes, it's true, they're probably paying low interest rates on that debt...but even so, the picture isn't quite as rosy when the whole story is told.

Quote:
Originally Posted by LongIslandEddie View Post
I do agree with your observation about America becoming a service oriented workforce
but that is the price we have paid for the outsourcing of one of our greatest industries, the manufacturing industry. Even the biggest
corporations in America are getting their brand name products manufactured overseas, to them there are benefits which are detrimental
to American workers but because their bottom-line is profit, those workers be damned. No, the corporate profiteers, certainly are never
looking to rock the boat, most especially, in economic times as fragile as these times are.
I think too much is made about our manufacturing industry going away. I think a lot of it would have gone away no matter what. Most manufacturing jobs haven't been lost through outsourcing, but through automation....and that will be increasingly true for a lot of factory workers in China, as well.
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Old 08-09-2010, 07:34 AM
 
Location: Great State of Texas
86,068 posts, read 76,840,230 times
Reputation: 27652
Everyone is hearing about "record cash" that companies have.
What they are not telling you is that they have "record debt".
They are borrowing via bond sales like no tomorrow.

Corporations are NOT financially healthy like the Fed would like you to believe.

The biggest lie about U.S. companies Brett Arends' ROI - MarketWatch

"A look at the facts shows that companies only have "record amounts of cash" in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don't look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?

According to the Federal Reserve, nonfinancial firms borrowed another $289 billion in the first quarter, taking their total domestic debts to $7.2 trillion, the highest level ever. That's up by $1.1 trillion since the first quarter of 2007; it's twice the level seen in the late 1990s"
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Old 08-09-2010, 10:35 AM
 
48,508 posts, read 88,655,852 times
Reputation: 18188
Much of the prodcutivity gains have been theru automation and computerization. if you look at manufacturing it looks nothing like the 50-60's prodcution ;many things are done without any human labor at all.Its hardly that people are working harder than ever before.All you havfe to do is what a show on televsion on a modern amnufactuirng plants production to witnesss it for yourself.
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Old 08-09-2010, 10:37 AM
 
22,769 posts, read 27,809,017 times
Reputation: 14617
We have a system that is designed for easy credit expansion.

This credit availabilty drives up asset prices. It makes things like land, vehicles, commodities, and homes more expensive.

My belief is that having expensive assets, especially for personal shelter and transportation, has a dampening effect on entrepreneurship and innovation. It has an effect similar to high taxes.
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Old 08-13-2010, 07:08 AM
 
28,741 posts, read 31,400,949 times
Reputation: 29880
Quote:
Originally Posted by le roi View Post
We have a system that is designed for easy credit expansion.

This credit availabilty drives up asset prices. It makes things like land, vehicles, commodities, and homes more expensive.

My belief is that having expensive assets, especially for personal shelter and transportation, has a dampening effect on entrepreneurship and innovation. It has an effect similar to high taxes.
Yeah, I agree with that. Houses aren't all that economically productive, especially those oversized McMansions.
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Old 08-13-2010, 06:53 PM
 
5,410 posts, read 10,350,796 times
Reputation: 4488
Quote:
Originally Posted by HappyTexan View Post
Everyone is hearing about "record cash" that companies have.
What they are not telling you is that they have "record debt".
They are borrowing via bond sales like no tomorrow.

Corporations are NOT financially healthy like the Fed would like you to believe.

The biggest lie about U.S. companies Brett Arends' ROI - MarketWatch

"A look at the facts shows that companies only have "record amounts of cash" in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don't look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?

According to the Federal Reserve, nonfinancial firms borrowed another $289 billion in the first quarter, taking their total domestic debts to $7.2 trillion, the highest level ever. That's up by $1.1 trillion since the first quarter of 2007; it's twice the level seen in the late 1990s"
Makes survival sense in a bizarre way.

In a World of Too Big To Fail and Donald Trump hosting The Biggest Debtors . . . "In Debt" may just be THE way to be.

Think Corp-Rat for a minute, HT, and I think you may get an admiration for these slime-bags -- IF you are Biggie-Sized Corporate -- a whole Lot of Debt makes you immune to take-overs, and if you if fall over the edge with too much debt -- the banker and Uncle Sam will be forced to bail you out.

When you owe the Bank a few thousand dollars -- the Bank owns you. When you owe the Bank a Billion dollars -- you own the Bank.

Oh lead US into debt and not into salvation.

Don't get me wrong. I love our country.
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