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A lot of business strategy these days tend to forget that their labor are often their customers in a somewhat symbiotic relationship. This was part of the reali

A lot of business strategy these days tend to forget that their labor are often their customers in a somewhat symbiotic relationship. This was part of the realization Henry Ford had when developing Ford motors and during the heydays of labor rights. Cut your labor and you strangle your customer base. Now we're seeing a tendency of businesses focusing on more wealthy clients, luxury goods, etc. Some modern mall strategies are gearing at primarily targeting luxury stores vs appealing to the masses because the mass labor force purses are growing ever tighter (mainly because they're emptying). Seems like a natural progression as the "wealth trickle" progresses more and more to a drought and pools up at the top in guarded reservoirs away from the majority: the labor force. It's one thing to automate away tasks people don't want to do and replace those tasks with tasks people do want to do (and get paid for). It's an entirely different story when you eliminate work and provide no alternatives, displacing large segments of the population, then simply accumulate the labor cost savings for your business and chief investors while stagnating growth. Most counter arguments to this trend point at historic technological shifts where new industry popped up to supply alternative means of living for the labor force. This makes an assumption that the change is the same and ignores the trends, hand waving it away in ambiguous complexity and proposing we play the experiment out. Most wanting to play the experiment out have little to lose and much to gain. The other side have a lot to lose and relatively little to gain. We're seeing a lot more of businesses pooling cash and asset reserves and not reinvesting them back into society and people are starting to get a bit cranky about it.

umanwizard 7y ago
Yes but it's a tragedy of the commons / prisoner's dilemma issue. If your store employs 1% of the people in a given area, and therefore also 1% of your customers, you can't prevent the other 99% from laying off their own workforce and affecting you, unless you collude with them somehow. On the other hand, increasing your workers' pay will give you no meaningful sales benefit as it can at most affect that 1%.
- Frost1x 7y ago
  I agree with your point and it seems (to me) to be a natural progression/emergent behavior of the current implementation of capitalism we subscribe to. It could potentially be even more axiomatic than that and an unavoidable result of core/firmly held beliefs with trade systems that there will always be those to exploit the weaker (in an economic system) to the point where the system becomes unsustainable. It often reminds me of agent based models of predator/prey systems where ultimately, the incorrect balance of predators, their efficiencies and successes result in a systematic collapse where the predators starve themselves to death by not allowing the prey to procreate and gather resources necessary that predators ultimately survive on. In this case, if the wealthy (predators) don't allow the labor force (prey) to collect resources, create value, etc. before snatching added value up ('eating' if you'll humor the idea), they ultimately end up with no future value added from labor force (prey) because the labor doesn't have resources anymore to add value. From your example following the same basic model, if some of the predators allow themselves to refrain from eating too much and allow the prey to better maintain stable set resources through self control, nothing stops their competitors (other prey) from focusing on their short term gains with no control (yum, more dinner). Ultimately, those predators looking at maintaining a long term stable system will starve if his/her competitors don't share the same views and are allowed to follow the more basic rules. It seems to me, you have to introduce artificial rules into the system to maintain the system (e.g., government regulation or new fundamental underlying rules to the dynamics). Obviously, the real relationship is far more complex than this view and this model has many shortcomings, but it seems to provide at least some potentially valuable insight to the situation, IMHO.
- tracker1 7y ago
  It could also drive up competition for good labor and increase turnover at other locations as more try to "move up" to a better paying location. When I was in my late teens, I worked tech support at a given location... A new call center for another company opened up paying about 25% more. This had a lot of people switching jobs and pay overall for the area for that type of work went up. Other companies relaxed or offered other benefits (subsidized vending machines and food trucks, for example). If 1% of the market for employees moves, that can have sweeping impacts overall. Take WinCo vs Walmart as another example. The shear impact of the appearance of a better workplace will often drive foot traffic, especially combined with competitive pricing. Brand image is a thing, and how a company treats it's labor is part of a brand's image.
Ghjklov 7y ago
>Now we're seeing a tendency of businesses focusing on more wealthy clients, luxury goods, etc. I saw this at the bakery I worked at before. The manager I worked under talked about how he wanted to target wealthier clients or at least people willing to pay a lot more for their products, which means eventually pricing out the current customer base that makes up the low income community that this business serves that were a lot more tight with their money. It's so sad and shortsighted. They are more than happy to sell out the customers they currently have in pursuit of the customers who don't/won't come in the first place. I think businesses like that deserve to die. It's a tragedy when good food becomes gated and the poor are left with options like McDonalds or other fast food chains.

umanwizard 7y ago

Yes but it's a tragedy of the commons / prisoner's dilemma issue. If your store employs 1% of the people in a given area, and therefore also 1% of your customers, you can't prevent the other 99% from laying off their own workforce and affecting you, unless you collude with them somehow. On the other hand, increasing your workers' pay will give you no meaningful sales benefit as it can at most affect that 1%.

Frost1x 7y ago
I agree with your point and it seems (to me) to be a natural progression/emergent behavior of the current implementation of capitalism we subscribe to. It could potentially be even more axiomatic than that and an unavoidable result of core/firmly held beliefs with trade systems that there will always be those to exploit the weaker (in an economic system) to the point where the system becomes unsustainable. It often reminds me of agent based models of predator/prey systems where ultimately, the incorrect balance of predators, their efficiencies and successes result in a systematic collapse where the predators starve themselves to death by not allowing the prey to procreate and gather resources necessary that predators ultimately survive on. In this case, if the wealthy (predators) don't allow the labor force (prey) to collect resources, create value, etc. before snatching added value up ('eating' if you'll humor the idea), they ultimately end up with no future value added from labor force (prey) because the labor doesn't have resources anymore to add value. From your example following the same basic model, if some of the predators allow themselves to refrain from eating too much and allow the prey to better maintain stable set resources through self control, nothing stops their competitors (other prey) from focusing on their short term gains with no control (yum, more dinner). Ultimately, those predators looking at maintaining a long term stable system will starve if his/her competitors don't share the same views and are allowed to follow the more basic rules. It seems to me, you have to introduce artificial rules into the system to maintain the system (e.g., government regulation or new fundamental underlying rules to the dynamics). Obviously, the real relationship is far more complex than this view and this model has many shortcomings, but it seems to provide at least some potentially valuable insight to the situation, IMHO.
tracker1 7y ago
It could also drive up competition for good labor and increase turnover at other locations as more try to "move up" to a better paying location. When I was in my late teens, I worked tech support at a given location... A new call center for another company opened up paying about 25% more. This had a lot of people switching jobs and pay overall for the area for that type of work went up. Other companies relaxed or offered other benefits (subsidized vending machines and food trucks, for example). If 1% of the market for employees moves, that can have sweeping impacts overall. Take WinCo vs Walmart as another example. The shear impact of the appearance of a better workplace will often drive foot traffic, especially combined with competitive pricing. Brand image is a thing, and how a company treats it's labor is part of a brand's image.

Ghjklov 7y ago

>Now we're seeing a tendency of businesses focusing on more wealthy clients, luxury goods, etc. I saw this at the bakery I worked at before. The manager I worked under talked about how he wanted to target wealthier clients or at least people willing to pay a lot more for their products, which means eventually pricing out the current customer base that makes up the low income community that this business serves that were a lot more tight with their money. It's so sad and shortsighted. They are more than happy to sell out the customers they currently have in pursuit of the customers who don't/won't come in the first place. I think businesses like that deserve to die. It's a tragedy when good food becomes gated and the poor are left with options like McDonalds or other fast food chains.