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Ironically the best thing they can do to create new investment opportunities is pay their workers more, but they never will because they are too short sighted.
by astazangasta 7y ago
Ironically the best thing they can do to create new investment opportunities is pay their workers more, but they never will because they are too short sighted.
- fastball 7y agoIf you pay your workers more you have less money for investment opportunities...
- Waterluvian 7y agoYour workers buy your cars.
- vkou 7y agoThis only works when everyone pays their workers more. It's in your benefit to defect. And besides, it's just as likely that instead of your employees buying your cars, their landlord/medical insurer/kid's college will take whatever wage gains they make.
- skywhopper 7y agoThis is why there's a minimum wage.
- beamatronic 7y agoPrisoners dilemma vs. velocity of money?
- fastball 7y agoTragedy of the commons.
- CryptoPunk 7y agoCompanies then have to build cars to provide to your workers, instead of building you a factory. We have a limited amount of capital. There's an economic opportunity cost from higher wages and more consumer spending.
- maxxxxx 7y agoWhat kind of messed up thinking is this? More consumer spending has an opportunity cost? What’s a capitalist supposed to do if nobody can afford their stuff?
- CryptoPunk 7y agoThis is basic economics. Consumer spending is not the only kind of spending, and directing all economic output to meeting consumer demand would be disastrous for the economy. >>What’s a capitalist supposed to do if nobody can afford their stuff? Investing in new capital equipment is how you allow more people to afford your stuff. More consumers will afford your stuff in the future when you've built your factory and you can churn out more stuff for more people. Capital investment is why 2.5 billion people can afford smart phones today instead of 50 million people, like 12 years ago.
- maxxxxx 7y agoThat’s totally backwards. If nobody had had any money nobody wouldn’t have bought any phones. You Can’t just invest into things nobody can buy.
- CryptoPunk 7y agoActually you have it backwards. Everything produced is sold at its clearing price. If everyone has half as much money, then the price gets cut in half. Likewise, if the number of goods/services produced is doubled, the price of everything gets cut in half. A little bit of a simplification, but that's generally how it works. Money is not wealth. It's how we measure it. Real wealth is goods/services. And the only way to increase the volume of goods/services produced is to invest in the capital equipment that increases our productivity in producing them. More goods/services means more purchasing power, which means higher wages.
- fastball 7y agoYou're joking right? Tragedy of the commons.
- maxxxxx 7y agoBut you have more opportunities.
- skywhopper 7y agoThis is a reason why increasing the minimum wage or providing health coverage for low-wage workers is a great way to improve everyone's situation. Sure, Walmart has to pay their workers more, but every low-wage worker who works for someone other than Walmart suddenly has a lot more money to spend... at Walmart. On net, companies like Walmart will benefit far more than they lose. But they aren't willing to unilaterally increase wages and benefits, reasonably enough. That's why you do it across the board.
- chris5745 7y agoI imagine raising the cost of labor in the U.S. would only encourage more outsourcing. Maybe entrenched parties with lots of cash need special incentives to spur investment. I don’t know what those would be, but if all this cash is not being used to invest in public projects or new ventures, we may be witnessing the beginning of a huge socioeconomic shift. Remember war bonds? We need road bonds. Bridge bonds. Something.
- komali2 7y agoHow do you outsource a Walmart shelf stocker?
- toast0 7y agoLabor saving devices / robots. If not to do the whole job (because robot shelf stocking is too much right now), then to reduce the amount of people time needed. Better ways to get the goods close to where they need to go and let the workers move it onto the actual shelf. Or outsource to the shoppers: just drop the palette of stuff where it should be and let the customers find what they want.
- fastball 7y agoIs that not Amazon?
- AnthonyMouse 7y ago> This is a reason why increasing the minimum wage or providing health coverage for low-wage workers is a great way to improve everyone's situation. We got here by setting policies based on the bottom rather than the middle. The problem isn't that the bottom 5% needs a modest raise, it's that the middle 50% should be making enough to afford to buy a house and they're not. Price floors don't change that. If anything they make it worse, because most of the new cost of that comes from the middle class in the form of higher prices. What we really need is to do something about the cost of housing, education and healthcare. And not just subsidizing it -- that's how we got into this mess to begin with. Actually reducing the underlying cost. The alternative would be combining significant inflation with high interest rates, so that asset prices don't rise from the inflation because of the high interest rates, but wages do.
- NTDF9 7y ago> If you pay your workers more you have less money for investment opportunities... Why are workers not an investment? Are your workers only encouraged to hit nails with hammer or can you think of ways to incentivizee them to innovate and do better than competition? Oh wait, you must be a short-sighted employer.
- fastball 7y agoThat is obviously not what is being discussed here.
- rhizome 7y agoIf you pay your workers more they can start new companies to invest in.
- jayd16 7y agoPaying your workers is the whole trickle down part of this ridiculous system. If you skip that part, why should we tolerate an investment class?
- astazangasta 7y agoTo repeat the basic premise of the article, the lack of money is not the problem, the lack of investment opportunities is. That lack is due to insufficient demand in the economy. You can stimulate that demand most easily by increasing the income of the lowest paid workers, who spend money the fastest. It also would produce productivity growth which would boost profits.
- imtringued 7y agoThere are no investment opportunities. Otherwise you would have invested in those and wouldn't complain about not knowing what to do with the money.
- internet_user 7y agoI feel sympathetic to this argument, but running of money just short of take off/finding market fit/etc would lower workers pay to zero. The real issue is that we live in such uncertain times it's very difficult to plan ahead, both employees and employers have become quite risk-averse.