Low Wages Bad For Business

Low Wages Bad For Business: Most business persons will tell you low wages are good for business. Some actually believe it. Not the smart ones. Ford thought high wages would provide his employees with the money they needed to buy his cars. But what sort of business person really cares about helping employees do what they already are doing. Workers buy. They buy what they make. They consume what is sold. Why should businesses ever have to pay workers well to get them to buy.   Workers will buy even when they have little money. The only reason why a business would want to pay workers good wages is if they want consumers to demand more. Businesses can make a profit without paying good wages. Less sales are acceptable especially if greater sales are not expected. Businesses normally realize a profit by focusing on keeping production costs down. Increasing sales by creating consumer demand by paying higher wages is a much more difficult concept for management to understand. Now we come to the minimum wage. Increasing it has always worked, but look how businesses still resent the increase. In reality, businesses never really worry about minimum wages. What a business really wants is an effective business plan. Businesses often remain less-profitable by cutting back on worker salaries while paying higher compensation to executives. In today’s short term market, CEOs know they can generate higher compensation for themselves, not by creating consumer demand, but simply by lowering wages and increasing dividends. Few CEOs are willing to take the risk of creating higher demand by raising wages. Short terms profits have become the rule. Big investors don’t care about sound, conservative, long term investment. Big investors want a quicker return on their investment by fiscal manipulation. Big investors control the market, expansion, new equipment purchases, R&D, etc. And big investors only choose CEOs who will meet their investment needs. Richard Dorsey, Hacienda Heights, CA.

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