Wednesday, November 21, 2012

Stop focusing on business. Focus should be on the employees

Many governments have been focusing on giving breaks to businesses in the hope that whatever breaks given will filter down to the employees. So what's the result? Record amounts of cash being kept by the businesses because they do not believe that pushing these savings to the employees will help them. May or may not be true, but if you look at the situation in the long run, I always believe that treating your employees right will lead to a virtuous cycle which will have a positive effect on the economy.

I personally believe the US election results do show that the US citizens are tired of breaks given to businesses which do not filter down to the people. They have chosen someone whom they hope will create policies that will force businesses to act instead of keeping record amounts of cash. Translated, cash given to businesses must come with conditions and there cannot be any assumption that businesses will do whatever is right. Based on our history, we make most of our wrong moves in times of uncertainty. This definitely qualifies as times of uncertainty.

Frankly, I believe most companies will not do whatever that is right for the society because the fundamental reason why a company is set up is usually to make money for the owners. It's like asking a listed company to price their products fairly because it is used by everyone in the country. Why on earth would they do that? That company will definitely be very happy because its in the situation where they are monopolising the market. They can price it in anyway that they want and people will still have to buy their products. Price their products fairly? Like real. Unless they are a non-profit organisation.

Policy makers need to re-think on how to stimulate the economy. It must be grants given with conditions, and the conditions must aid the citizens. After all, it is public money.


Anonymous said...

In the larger scheme of things:

China, being the largest in terms of populace and also communist ( never forget that ) is the opposite of what the USA and all capitalistic governments are.

How to defang China? Encourage them to embrace capitalistic methods. This was started with ping pong diplomacy decades ago by Nixon.

And embrace capitalism they did.
So we move all things movable across the Pacific and used China as "the world's factory".

Its business.

And businesses are addicted to cheap stuff, free stuff just like any ordinary person. China is cheap.

Give employees or allow money, benefits to "trickle" down??
Out of 100 employers you would find NONE who would do such thing

Its a "me first" position and it will remain forever. Why would I want to worry about you, the employee? There are dozens and trillions who will do the job just as well or better for a fifth of what I have to pay.

No apologies, its business.

chantc said...

I agree with what you said. Business is for profit and that is what employers will do. That is why governments should stop focusing on businesses only and should start thinking of how the man in the street can benefit. From the US perspective, what's the use of providing cash to businesses when all they are doing is keeping it in their accounts?

Anyway, China is no longer the country with cheap labour. That's because the China government is increasingly recognising this problem and have start to shift the focus to employees.

The trend has started.

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