Tag Archives: exploited workers

The Double Whammy…its coming to a place near you…

Outside Wall Street

The so called double whammy is yet to come, the first was when the real high flyer’s fell from grace, but they still have bundles left in the bank, the Mom and Pop investors conned by financial institutions for a “better retirement life” have already been sent to the dogs with their savings and even their homes sold to repay debts, and were basically the ones who have taken the biggest hit in the financial crisis mainly with many to never recover, I could say that to a point they were stupid to bet their life savings (and their homes) on greed, but they should have bet both ways and not put it all into one pot of gold that turned out to be chocolate and melted, many of these retirees also come from  different era, an era were they should have known better than not to speculate their hard earned savings where they have no knowledge, but its all gone and now many countries will have to support them through old age putting tax and pressure on young earners to fill in the gap

The second whammy is now coming, the problem with this one is it is not as spectacular as the first of the nightly new broadcasts of company directors and bankers jumping out of windows, as the slow drawl of layoffs continue so will spending, the reality of people still living the “I’m still shopping as everything is fine” will suddenly realise that their money is now getting tighter, jobs will continue to drop and so the cycle downwards continues, governments want us to spend our way out of the problem and to a point it is working, but it can’t continue forever as we have to hit the wall sometime, in the 1930’s it was a severe depression that won’t happen today as we are now a global economy and that will save us, but we will suffer and for a few years yet and it will get harder and bleaker until something changes, but another change has happened a major social shift that is far larger and far reaching than we realise.

The world a few years ago was balanced totally in favor of the rich, the very few rich, but they undercut themselves into oblivion, why..well because profit at all costs was god and they forgot the basic rules that if you cut the money going down then how can the money come back up to you in profit, I’ll explain what I mean…

As you employ your staff to create more profit you have choices, to be more productive you can hire less people to do more work, or hire the same number of people and pay them less, another way and very popular was you could fire all your staff and send the work overseas mainly to Asia, but it all comes down to one thing, people you hire are either underpaid or fired both which means they have less money or no money at all, now in a raging growing economy that is not to much of a problem except you are sucking money out of the system and into your bank account, unfortunately the people whom buy your products are going broke as they have either less money or are simply broke, it was a system that was bound to fail sometime without a sub-prime mortgage crisis or not as you were sending yourself really broke while getting really rich, plus then you also have the fact that your workforce loath both you and your product you because their wages are lower than they were 20 years ago and they are working twice as hard and under the constant threat of “If you don’t I’ll fire you and take my business to China” mantra.

For one company or business to do this can be absorbed, but when 60% or more of a country’s businesses are doing this you have a major problem, you are creating a very large demographic that is going down to broke (poor) and are very angry, in other words the country is not a 1st world country anymore it is a 3rd world country and the 3rd world countries (India, China, SE Asia) are now the productive countries with money flowing in and not out, in other words they are rich and you are not, plus the fact that the companies that rely on your wages are now wondering why you are not buying from them anymore, rich people funny enough don’t spend money, the poor people do!.

Strange but true, let me explain..

Rich people will certainly invest, however profits and gains are mostly horded, put into banks and property or laundered away for a sunny day in Switzerland but not into the main economy and as there are very few rich people who do spend more the effect is good but not game changing, however poor people have to spend to survive and the sheer numbers of these middle class and poor income populations do make a bigger difference, so here you go and kill the middle class in layoffs, cutbacks or early retirement and send them poor(er) (and remember they were the ones with the most disposable incomes) and the few poor that do work are now very underpaid (commission work, few casual hours) or are out of work altogether..Brilliant well done you have put yourself out of business!

You could send your goods overseas but where, China?..they make it for nothing right now for you remember, so why would they buy it back at higher cost and then there is your other big problem of cutting corners on quality for profit which meant that your brand became damaged as well, but in an era of wear today and throw away tomorrow people didn’t really care if the item broke or fell apart which was good for you because they had to buy it all over again, they do now…the difference is that now people are paying for things with their own money and not with credit or company freebies, so now they want value and quality and funny enough will pay more to get it, but if you mass market your goods then the quality of say your Calvin Kliens is the same as your Kmarts because basically they come out of the same Asian factory people are going to move on to a product they can value or trust and its not you, you screwed them remember and along with that you stuffed up your brand and its long history.

The process of people getting poorer in a 1st world country was hidden by the fact that Real Estate was hyped and pushed up way to high by false security and well above a properties worth, and even allowing people who cannot afford such properties to try to buy them (Sub-Prime), plus the fact that people who already owned property found themselves in a gold rush were as the properties value went from $250.000 to $750.000 within a few short years making them suddenly rich, so they spent up big time, a spending spree of a life time and not only spending their own but the goodwill of generations past income and savings as well, in other words they sold their soul and their homes and descended themselves down to poverty and loss…but suddenly they are back to reality, instead of being worth $850.000 they are now worth $400.000 which is where they should have been in the first place, its still a lot of money but not in today’s worth and some people now owe that $450.000 as they spent the difference, and that is if you own your home outright, if you have a mortgage then you really have a problem and mostly its solved by either an auction or bankruptcy.

Large multinational companies have been so ruthless in getting profit at the expense of their workforce to the point it is a social disaster, young workers are disillusioned and angry at being so exploited that getting tanked and drunk is a better way to live than trying to make themselves a better life, wages are so dismal that they have two or three jobs to pay their way, for when the Baby Boomers left school they had a career or lifetime opportunities to pursue, not today, plus the fact that to get a higher education now means that you have to be rich, very rich, money is again the differential between having a good life and a career or being poor, the 60’s generation was not faced with this choice and they changed the world, this current generation just don’t care they can’t make money and they have no hope of buying or saving for a $500.000 house, “whatever”, so they live day to day not caring about anything except survival and getting through the next day.

This is the second double whammy the big one, the no money in the bank one, so what happens now question?

Too continue to pursue (demanding) growing profits over every other form of everyday life will mean disaster and with it and a total breakdown of our society which has already happened over the last 15 years and is going on right now and is getting seriously worse as it is that we just choose to just ignore it (just like the sub-prime debacle), yes business has to make money but not at the cost of total social collapse, unfortunately history has not been kind to us as we have a very poor record of the few rich exploiting the poor for just profit, the difference today is the very people you are exploiting is now your own customers which really is not good business and on top of that you now are taking money that should stay in your own economy and instead sending it overseas just to keep the stock market and shareholders happy, merging to create bigger models of scale is not great either just think of General Motors, bigger is not always better, Apple Corp absorb small innovative companies to add technical edge but do not intend to buy out Microsoft for market-share, so why be burdened with a mammoth when you can be lithe and creative and still be very successful with a good brand awareness.

So are we asking you to be social responsible, to survive you may suddenly have no choice, many will ask that “if we challenge our profits and businesses then I will fail”, if you don’t you will fail anyway, because now the situation is very different, rich are rich and the few successful upper middle class has moved up to join them, however the rest have moved down, way down in that middle class, lower middle class and poor (classed as just above the poverty line), street poor have always been below the poverty line (including druggies), are now all firmly down in the poor bracket, society is now not as diverse as it was, it is really now just the rich and the poor, so what choices do you now have?….

…well you have too ask yourself.. What is fair?

People will pay for quality in anything so price is now not the issue, if it is well made and lasts it will be purchased and you must educate your customers to buy for quality, surprisingly they do know the difference!, you don’t have to increase your workforce, you just have to pay them better and that is all the way down to the Fast Food store in fact it is the lower scales of labour that need the most changes….and this is the most important bit of this Journal.

There is a silent minority that don’t work and to a point no amount of training or dragging them to workplaces will change that, however money is not free and they are an increasing burden on the welfare system and it is not fair that people who do work hard are allowed to be taxed far higher and have to pay heavily for people who don’t contribute to the system this is the biggest burden on the surviving middle income earners and the extra burden of being taxed and piled high with other local, state and higher and exploding fees (registrations, licences, rates and like) which is slowly eroding their savings and taking a larger and larger share of their income, sending them down to the level of asking for state and national support and slowly creating a dissolving middle class and down into a new class of poor, which should not be the case as they are becoming the very people they support so who will support them?

We now have the extreme factor with current economic crisis that these income producing people will lose their jobs and worse not get re-employed.

Financially his a social shift of disaster, plus the old poorly paid poor are now living well below the poverty line, below even the street level.

But why work as well, if you do you are then carrying the country, taxed heavily and very low wages the reality is you get more for not working than if you do so, of course for the government it wants you to work but the reality is it doesn’t work..

The basic wage (sometimes called the Living Wage) is of course the idea to make sure that these workers are compensated reasonably for their labour, however it is well noted that the system has been circumvented and that few employer’s pay the amount required, one gag is to hire young people straight out of school under so called training schemes or the award wage for young people which is well is below the average wage of adult workers only to be released on them reaching an age that requires the employer to pay the full rights of the wage of an adult, leaving a young person unemployed and disillusioned at still a very young age, another problem is many people will work for less just for the work, immigrant or casual work means the system is undermined to the point that jobs are auctioned off to the person who is willing to work for the less amount of pay, mostly under the counter or the person willing to sign that they are getting the full rate when they are of course well below the law, other exploitation schemes are for commission only work or very few casual work hours, all of which really amounts to not even basic needs met by unskilled workers, in other words “why bother”and “I’m broke anyway”.

Governments don’t really like the idea of higher lower wages, the fear of employers firing employees and burdening the already overwhelming job market is to fearful for their own election chances plus the fact that such an higher wage will not make the country competitive in creating exports for sale overseas, it sends businesses to the wall, and for to compete with giants within Asia and Sub-Continent you now have to go off shore to be competitive on the world markets, but here is when the Double Whammy takes hold, yes you are competitive with world markets but you are doing something else as well, first you can not compete with China, its impossible and China strangely will change and not in the way you think!, for as low payed Chinese workers taste the effects of our culture they will want more of it and will want more money to be a part of it, in other words they will demand higher wages and better standards of living but that is still a few years off.

The problem for us we are going the other way and a large percentage are going very poor and manipulated with less and lower income wages we are slowly putting ourselves into a corner, people socially are already fighting for their financial lives and violence and the breakdown of basic social order is already with us, plus the fact that as people at this end of the scale have so little to spend it is not being translated upwards into other areas like tax and strangely enough profits for the very businesses that created the problems, cheap available credit has compounded the problem in the fact that for people to just survive they are putting their lives into debt just to fulfill basic needs, and as more and more of the population slide lower the problem will exacerbate into worse social and economic disaster, for youth and even now large percentage of unskilled and semi skilled workers it has become a exploited dire situation that will gradually infect the economies health to the point that every other demographic will have to shoulder the burden if not doing so already.

So what is the answer, for higher incomes (meaning rich) it doesn’t mean being taxed higher to deliver money low down to pay for the social poor, the solution is simple really, make low income work worthwhile, “oh the horror of it”, but really it makes a lot of sense on so many levels, low pay needs to go up not by a little but double! and even more and here are the benefits

1. low income people will want to work because they can now go forward in their lives and buy things or save

2. business will get better profits because people will have money to buy their goods and products

3. creates disposable incomes

4. many more people working will gather more tax and creates less burden on the social programs to survive

5. take the pressure off middle class to pay for everything including the rich whom don’t pay tax (they say they do but they don’t), more tax will come from the lower income population

6. creates self esteem and self confidence in people which is desperately required in the youth and low income population

7. people will want to do good work and will work harder because they will want to keep their good income

8. the wealth spiral goes up and not down

9. allows for young income earners to save and buy homes and start businesses

10. reduces the gap from poor to middle class (in fact it will restore lower-middle class and middle class)

11. reduces petty crime and violence, with money people will have no need to steal and feel inadequate, domestic violence will be lower as many problems are created by shortage of funds

To companies and small business this is probably a worst case scenario, labor has to be cheap to survive and make profits, labor is the biggest layout of costs in any business and there is no way we can compete mantra..

but the alternative for them is worse, dwindling profits, poor workforce, constant rehiring, constant retraining, poor customer skills, poor product sales skills, poor image, staff shortages, low moral, no company/business loyalty.

Harder to accept is a corporate mentality that goes though-out the whole service and commerce industries, the above problems are mostly solved by replacing costly people with machines, but machines don’t spend their wages in shops or businesses, and most of the above problems are caused by the mentality that can be solved by changes to their own methods towards their own employees, the distance between management and the work-face is in most cases non-existent if even most multi-national companies don’t even know what they manufacture or what their products are, and can own companies as diverse as farming to selling toothpaste to running hotels, large fast food chains and supermarkets are the worst offenders in churning over staff no matter how much they promote their training and hiring practises, and expect loyalty and good service, when in fact the complete opposite occurs with poor training and very poor wages it is often a recipe for disaster, far too many employers are not paying correct wages and providing impossible conditions of work (long hours, poor training, minimum if understaffed, non-wage payments, commissions) and this standard is not acceptable, it is also the duty of the employee to be accountable to the job required but fair pay and certainly good pay will change many attitudes towards their positions.

The standing of a country were as its population has good income across all demographics and not just in the corporate and rich brackets, but more importantly in its lower brackets can significantly change its social persona also gives governments more money to tackle its problems and decreases their dependence on direct taxes, with stability and incomes more disposable the genuine wealth of a country can grow, at this moment a few make a lot of money, most is sent overseas for manufacturing and imports so the wealth is dissolving from an economy and not being used for the needs of its own population.

One economic crisis has shown the underbelly of an even worse situation, one that has been perpetrating for a few decades, we feel safe in that we have a good standard of living however the truth is that a large part of our population are either sliding into poverty or are burdened and are severely over taxed (indirect taxation the worse offender) , I am not and don’t want to be an alarmist, however if you push populations to a point something will break, in the past war or revolution was created out of such ignorance, many say it is just the way of modern life, personally I don’t agree, commerce and business have been totally irresponsible in their business practices and governments have in fact encouraged such practices for tax and investment, however a change in attitudes can be changed but mostly besides paying people their worth and not allowing employers to exploit the system so avariciously in their favor…but left unchanged it will become our worst nightmare….

….If you thought the first economic crisis was bad then the second whammy will end in violence and social uprising that can reduce a country to years of turmoil and loss of life, people will not starve while the rich throw them crumbs…just ask any Frenchman or Woman…and if you think it can’t happen to you, then neither did the French..Its all there in history and the problem of history is that it can happen again because we have a arrogance that “it will never happen to me”, we do live in a global economy but to move people (including the poor and the youth) upwards in society who are willing to work hard and create good commerce and too not be so over exploited can be beneficial to all of society……even to the rich few.