Uncivil Rights

A BLOG rife with wit, sarcasm, and the endless joy which comes from taunting the socialistic and unpatriotic liberal left. Logical thoughts and musings ONLY need reply...unless you're really, really funny. You have the Uncivil Right to be an IDIOT. "Give me LIBERTY, or give me DEATH!"

Wednesday, December 29, 2004

A Business Primer for Liberals and Progressives

Wal-Mart will soon be under siege from unions. The objective is to unionize the workforce. Sam Walton, a stout opponent of the minimum wage and unions is probably turning over in his grave.

Union proponents will argue that they are bringing higher wages, affordable health care, overtime, and fair collective bargaining to underpaid, overworked Wal-Mart employees. They argue that employees of Wal-Mart live on minimum wage in poverty and can’t afford to buy the products Wal-Mart sells. They claim that Wal-mart is a big evil corporation that holds small-towns hostage and drives out all competition, even the mom-and-pop stores. They state that Wal-Mart profits on the labor of its workforce. Profits soar at the expense of the low-wage employees.

Needless to say, if these opponents of Wal-Mart were in charge of the operations, things would be quite different. I’m sure.

What type of company would we see if these people were in charge? Taking my own job as an example, benefits with health care is worth roughly 20% of my salary. Therefore, Wal-Mart employees making minimum wage plus benefits would have a compensation package worth $6.25/hr. But wait, liberals and progressives believe the minimum wage is too low, so let’s up that compensation package to $30/hr. That ought to make the employees happy.

Hmmm…if we do that, the company actually loses money. There are no profits. What should we do? Should we lower wages? That would be bad. Should we lay-off people? That would be bad too. Maybe we should expand our business into other territories? But that would put other businesses out of business. I know, it’s simple; we’ll just raise our prices. That way we will be able to cover our added costs. What a great idea…

Months later…

Our sales have fallen. Our profits are down to nonexistent. Our customers have moved on to our competitors with lower prices. We’re at a loss again. So what are our options now? We can raise prices again, but now we realize that increasing prices loses business. We can lower wages, close stores, and lay-off employees, but those are bad options, and make us look like profiteers. So what should we do?

Let’s examine why we’re in business and our goals: sell lots of product at low prices, give excellent service to maintain customer base, expand and grow business into new areas, make profits, earn money for our investors (after all, it is their money they’re investing; they are taking the risk of losing their money). So how do we achieve our goals while giving our employees everything they want?

It seems these to objectives are mutually exclusive. We can’t make a profit while giving our employees everything. But how can we be good little liberals and progressives if we don’t give our employees everything? I guess some common sense and good business practices are in order to successfully run a company. We must manage our costs and operations effectively and efficiently is we are to succeed in the business world. After all, if we fail in our business venture, all our employees will lose their job.

We could set our compensation package such that we make no profit, but that does not make sense. Therefore, we must make a profit, enough to satisfy our investors and make our company look like a good investment. We must earn enough profits to expand our business, so we can’t set our compensation package so high as to eliminate profits.

Perhaps we should allow the market to dictate our pay scales. Since we are good businessmen and want our company to succeed, it does not make good business sense to pay our employees more than we need or less than potential employees will work for. There must be some number that will entice people to come to work for us and allow us to make as much profit as we can. But how do we go about selecting that number?

Well, since the government has intervened in business and set a minimum wage, we’ll start there. It will be obvious if this number is right or not. If the wage is too low, we will lose employees and not be able to hire new ones. We must start here and vary our wages dependent upon the economics of the geographical area.

So now we have a business that can hire and keep employees, maintain service and customers, and make enough profits to satisfy our investors while expanding our operations. So far, so good.

But what if an outside entity or persons claim we don’t pay our employees enough? What should we do? We will be faced with the situation described earlier, losing profitability, customers, and service. When that happens, changes will need to be made.

Ultimately, if we don’t manage our wages, prices, operations, and overall costs effectively and efficiently, we will be doing a disservice to our customers, investors, suppliers, and our employees.
totalkaosdave, 8:22 PM