Notwithstanding your view of the "Harvard MBA Business School model", you do realize that successful companies attract investors which drives the price of the stock which allows the business to grow and thus the need for more employees, yes?
Silly me, I thought that companies grew because they sold goods and services to their customers, and expanded their customer base, then using profits and investments, expanded as their sales expanded. It matters little how many investors a company has if it doesn't have any customers.
This is where outsourcing labour and putting people out of work has really backfired. When enough jobs are lost and wages on the remaining low income jobs lose 29% of their purchasing power, people can no longer afford to buy stuff so these companies aren't selling their products. Yes, companies can manufacture for less, but if there are no buyers, they still have a problem.
Just because a company can manufacture in a country with little or no environmental or health and safety regulations, doesn't mean that it should. There should be other considerations aside from profits.
I'm not opposed to companies making money. I'm opposed to companies making record profits while using government subidies to compensate their employees, or while destroying the environment anywhere in the world. I want corporations to be good citizens, as well as profitable.
Did you think that for example Citigroup's 350,000 employees just popped up from thin air?
I think that the original Citigroup managers set up a very good, well run company that offered competitive financial services to its customers, and that the company's original employees did a very good job of selling those services to its customers so that they came back and recommended Citigroup to their family and friends. As the customer base expanded and more customers signed up, the company started expanding its services and its branches.
Eventually the company sought investors and the company's employees continued to work hard and provide excellent service to all of the customers so the business could continue to grow. Investors do nothing for a company's profitability. That's on the back of the managers and the front line workers because those are the people the public is dealing with.
Walmart keeps their workers to part times hours - less than 30 hours a week. In this way, the workers don't qualify for company benefits. Since they pay minimum wage, they have HR staff who help their employees apply for food stamps and Medicaid, and make sure the employees hours are such that they qualify for these entitlements. This keeps their wage costs among the lowest in the retail industry but every Walmart store in the US costs taxpayers over $400,000 in entitlement payments.
Because Walmart is the largest retailer in the US, other big box retailers must adopt similar practices with their employees in order to keep their prices competitive with Walmart, so wages in the entire big-box sector are being surpressed.
Yes, labour is a commodity and as such it's value depends more on supply and demand than anything else. The US has a large supply of unskilled, undocumented workers who will work for less than minimum wage and this keeps the costs for unskilled labour so low, it barely pays to take the jobs. Manufacturing jobs are disappearing as many processes are taken over by robots, or the jobs are outsourced to third world countries to cut production costs.
When construction grinds to a halt, architects, engineers, heavy equipment operators, carpenters and ditch diggers are all thrown out of work. Various levels of education, different skill sets, but when no one is building, they're all out of work.
Medical schools carefully control the number of students they take in to avoid producing so many doctors that they flood the market and drive down prices. In Canada, the government has asked medical schools to increase enrolment to help deal with a shortage of primary care physicians.
Skill and education have little to do with wages. Some sectors pay high wages because of risk or difficulty. Some because of isolation. Teachers make less than doctors, lawyers or accountants, although both have the level of educational requirements. Social workers, teachers, and other public sector workers make less than private sector employees, or at least they used to.
The bottom line is government stands in the way of business, which is part of the reason unemployment remains high and GDP growth as a crawl.
This is such a neo-con fiction. If you truly believe this, you have no clue as to how the economy really works. If this really were true, large multi-national companies would all be moving to those countries where there is little or no government. In fact, just the opposite is true. The worlds' largest and most profitable corporations don't exist in countries with no governments. Mega-corporations ONLY exist in countries with very large governments, and many of these companies exist in countries with far more regulations and higher taxes than the US.
With Obama's reelection and all sorts of new taxes and regulations on business and investment in the hopper, expect this trend to continue. The near term economic outlook for the next 18-24 months is for slow growth in the GDP( under 2%). More businesses will be laying off workers than those willing to hire.
I'm a gambling woman. I'll bet that once a deal is reached on the fiscal cliff, the economy will settle in nicely, and confidence will improve. Since there's no major changes in economic policy, the growth should be better than anticipated.