2015-09-11

Its Flow...Not Accumulation!

A recent article regarding the company that is moving toward raising the minimum wage(internal) to $70k/year noted that 'labor is businesses biggest expense".

I find it odd that labor is considered and expense: Is it not an investment?  Are not the people who are doing the labor the ones who are buying the products and/or the services that the products allow to be provided?  How then is it that those who declare that an economy must continuously grow to be healthy, are the same ones who whine that the 'expense' of paying for labor is always too high and, almost without pause for thought, claim that they are doing everything they can to contain this cost?

This attitude reflects a basic flaw in our implementation of capitalism.  That flaw is called "Trickle Down Economic", and it has proven itself not to work, again and again.

Apparently these folks simply do not understand basic economics.  Economics is based on flow, not accumulation.  Accumulation is to an economy what a puddle is to a road:  Bad news.  I am not talking about personal savings here, I am talking about massive amounts of money/property tied up in large corporations and financial institutions.

Like the puddle, the longer accumulation sits, the worse the road becomes for everyone.  The puddle gets bigger and the road gets smaller, causing congestion, accidents and damage to the equipment on the road.  Same goes for accumulation:  When money sits in one spot, everyone else has to work around that spot, with less room to maneuver.  And like the puddle, the accumulation gets bigger while the system that enabled the accumulation gets ever smaller.  It is a self-destructive mechanism.  It is stupid in that it ignores the very basis of capitalism:  Flow.

Healthy growth happens system wide.  Massive growth in only a few areas or for only the very few is analogous to cancer: Bad news.   The stronger and larger the tumor gets, the weaker the rest of the body becomes.  For capitalism to work at all, it has to work for everyone, on the same playing field, with the same rules.

I won't judge the $70k/yr policy, there are arguments for and against it, many of which are valid.  The sentiment is good, the implementation might be a bit ragged though.  However, seeing labor as an expense?  Using the government as a lever to dis-empower labor when the middle class is shrinking and the wage gap is widening?
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