11-17-2016, 09:42 PM
(11-17-2016, 08:40 PM)GMDino Wrote: So which is it?
Companies make record profits...but they go over seas so they can make more profit by paying employees less.
How does the government "focus" on making companies stay here AND raise wages?
It's actually much simpler than it would appear. Companies are traditionally short sighted because the people in charge of them are only concerned with the next quarter's profits. A high level executive can kick the can down the road for years, making fat bonuses the whole time, and then move on before the bottom falls out.
They are essentially doing the exact same thing by moving to countries were they can pay near slave wages to their workers. They save money in the short term for obvious reasons. The long term effects, which have yet to occur at the scale they eventually will, occurs when fewer and fewer people in the United States can afford to buy their product. The smart, long term, business model is to keep production in the same country that you sell your product, paying wages as high as you can reasonably afford. If this is done you not only have a happy labor force but you have an ever expanding pool of consumers who can afford your product. The people building your iphone in China couldn't afford one of those phones if they saved for years and that's only one example out of thousands.
The government further incentivized moving jobs out of the country with tax breaks and low to non-existent tariffs on the imported goods. They made it financially feasible for companies to move and glut themselves on short term profit margins. A billionaire once wrote an excellent article, that I wish I could find, about how a thriving middle class is in everyone's interests. He made the, correct, point that although he makes 500 times what your average worker does he does not buy 500 times the shirts, cars, appliances, etc... The point being that long term success can only come with a strong consumer base, a base that we are losing at a steady rate. It will take years for the bottom to completely drop out but it will happen.
The government's role in all of this should be to force businesses to focus on long term viability, both for the company and the country, over the lure of short term profitability. Instead they did the exact opposite, they incentivized not doing so. In this regard they, both GOP an Democrat, have completely sold the US populace out. Trump played to this very effectively. As to whether he follows through in any meaningful way on this issue remains to be seen. The natural cynic in me doubts it, but it could absolutely be done.
