Seeing Things in a Different Light __ Thinking About Free Market Capitalist

This is my fourth post under the banner of Seeing Things in a Different Light which refers to the time when my lights had been dimmed while I was recovering (I’m still recovering) from surgery on a detached retina in my one and only eye.

In  economic down turns it is not uncommon for Big Government goes into blame shifting mode and place the blame on free market capitalism, the big corporations and, of course, the evil rich. No one has been more adept at this blame shifting than the Obama administration.

In spite of the unscrupulous behavior of some of the Wall Streeters, we conservatives know that capitalist are responsible for making America the greatest country that has ever been.

Although I, as a life long believer that there is no better economic system than free market capitalism, reject the position of Obama out of hand, I have upon reflection of my own experience in the corporate world come to the conclusion that capitalist in general have not well understood the importance of their workforce.

For the sake of this discussion, let me replace the  word “capitalist” with “corporate management”.  Since my work experience was all in the mining industry, which is similar to manufacturing,  my comments will reflect that experience.

So let restate my concern. In my opinion, corporate management has failed to understand the importance of their workforce. It is my opinion that management should look upon their workforce as a capital investment in the same way they look upon the machinery in their factories. Management understands very well that they must take very good care of their machinery if they are to produce their products in the most efficient manner and maximize their profits or return on investment or maximize shareholder value or whatever other success scale you want to use. But, in far too many cases, management does not see the importance of taking care of their workers.

This current economic down turn we are in is a good example because there is something peculiar taking place. Although unemployment is horrible and companies are laying off workers and the housing market is still in the toilet and gas and food prices are skyrocketing, we see that our corporations are making record profits. From a capitalist point of view, that is a good thing.

What are our corporations doing with their record profits? Some of it is being held in reserve and in this particular economic environment that makes sense. Some of it is paid out in dividends to their shareholders and that makes sense. Some of it is used to reinvest in plants and machinery and that makes sense. and, some of it is used to reward management with bonuses and that too makes sense. But, management doesn’t seem to see any need to share a bit of those record profits with their non-management workers and  I think that is a mistake; but, it is nothing new. The hourly workers and middle manage are suffering. Many have seen the equity in their homes disappear. Their wages, in general have not kept up with the rise in their cost of living. These people are  angry people like Obama will play on that anger to  the detriment of the capitalist; the corporations. The decision not to share their profits  with the non-management workforce, in my opinion, is a failure to take care of a very important part of the corporation’s capital investment.

Okay. You can agree or disagree on whether corporations should share some of their profits with the workers. I believe it is in their best interest to do so. But, let me move on to a different point.

What is one of the greatest complaints that employers have about their employees or prospective employees?  I believe it is the lack of a decent education. They complain that their employees have abysmal reading comprehension, they can’t write a complete sentence, their math skills are almost non-existent and, worst of all they don’t know how to think for themselves.

Yes, the socialist infiltrated and took over our education system decades ago and are responsible for the poor quality of our graduates today. But, corporate managers (capitalist) are smart people on a whole. They saw what was happening long before the rest of us did. So, since they have a need for well educated employees, why didn’t they protect their interest and do something about it? They, for their own interest, should have been working in their local communities, with community leaders, with the schools and, using publicity to inform the parents. They should have been demanding in the media that the education must produce a better product if the employers were going to be able to continue employing. I believe there is much they could have done and should have done because it would have been in their best interest.

Employers have been complaining for years that there is a shortage of skilled labor: machinist, pipe welders, electronics specialist and, etc. Since no one else is supplying this product they need, why haven’t they done something about it? Why haven’t they done more to work with the education system and/or private entities. In other words, why haven’t they invested in trade schools. It would have been in their best interest.

I could go on and on but I think you see where I am going. Capitalist are supposed to be very good a looking after their own self interest. But when it comes to their workforce, an element so key to the success of their businesses, the capitalist have failed for years to look after their self interest.

Well, that’s what I’m thinking. What are your thoughts?

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9 thoughts on “Seeing Things in a Different Light __ Thinking About Free Market Capitalist

  1. Corporations no longer value employees as they once did. Employment at one firm was the standard. Thirty years, a gold watch, a farewell party and off you sailed into the sunset. My experience is that in particular, managers are now considered to be the beast of burdern. Efficiencies at every corner, and the manager better do it. Right now we are on “Low Census”.. if we do not have “enough work” as considered by the top level, employees are mandated to go home. This is a temporary fix that reaps profitability. In the end? What kind of staff will they have? What shining management team will want to work under these conditions.? So, it is live for today, and tomorrow will be another day. The stock market rises.

    1. There are times, of course, that companies have to make layoffs. Sometimes companies get fat in good time and they have to trim; sometimes there are economic down turns and they have to cut back and, there are times when management made bad business decisions. I accept all of that. But, I do believe that many if not most capitalist do recognize the value of their workforce as something they need to nurture.

  2. Excellent points Jim. There is endless data to support the return on investment of employee education that translates directly to the bottom line, so it’s no mystery as to if it pays off. There are two reasons that I have seen as to why companies are dropping the ball.

    First is the expectation level to fill a position. Companies want a turn key employee ready to step right in and perform at the highest level. Used to be there was OJT or an apprenticeship, interns, etc.I think this is fallout from our streamlined companies that operate at maximum efficiency to turn out these record profits despite the poor economy. They believe they can’t afford any ramp up time to get an employee up to speed.

    Which leads to point two. They fear investing in the training only to have the employee jump ship to the competition for just a negligible pay increase. As Zig Ziglar has always said – “What’s worse than training your workers and losing them? Not training them and keeping them.”

    I have one other theory. It’s these goofy tests that corporations rely upon so much these days to hire. They prefer a particular mindset over a skill set so that they can mold the employee. That’s great, but I wonder how many qualified candidates that already possess the right skill set are being passed over because you have to get through the profile test phase before you ever score an interview with an actual person?

  3. Good food for thought. One key difference between a man and a machine, is that a man can walk off the shop floor and seek employment at the factory across the street, the machine cannot, so I can see how an employer is loath to invest more in an employee than is required for the job.

    1. Kurt, I’m glad you came by today. I am unable to comment at your sight or at AOW’s site. It’s the new word recognition guard that Blogger has. I can’t read the letters. So, if your wondering why I haven’t been visiting, I am visiting every day. It’s just that I can’t read the letters of the word recognition screener.

  4. Hey Jim, the problem with the companies that we have is that many of them benefit from the inflationary environment provided to them. They, as the first recipients of the inflation, benefit the most from us while all of us suffer. Their position is solidified at the top (along with all the regulations that are impossible for up-starts to deal with). This seriously hinders free competition. I think this has to be considered when entering into a discussion of the management-employee relationship.

    1. I see what your getting at, Tony. What I’m trying to to say is that no company produces goods or services without their employees. When employees feel like they are an important part of the team they will in my experience be more productive.

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