Deszaras1979 wrote:The flaw in your example is that as companies hire people at reduced wages, outsource jobs overseas, the cost of living has gone up and disposable income among the poor and middle class is non-existent. Thus in the long run the poor and middle class in America will be living day to day while only the wealthy can afford anything not considered an essential to survive in the world today.
That's not a flaw in my example, it's a flaw in the thinking of the economy and those working with it. Nothing can grow continuously and in unlimited numbers.
However, you must keep in mind that these companies are multinationals, and also sell their products in the companies they produce, believe it or not, but China is currently the biggest electronics market in the world.
Companies are not loyal to a single country, only to the one where they make the biggest amount of money.
Our economy is surviving on borrowed income, the govt. is in debt to other countries, a lot of the people are in debt to the credit card companies or banks, and there are no good jobs available, working at McDonald's doesn't cut it.
Every country is in debt to other countries and has stakes in them, it's part of the reason why the super powers don't rage war against each other, they're all dependent on each other. That's also why China won't go and start a war with the US, if they did, the US would pull it's stuff back and the Chinese economy would look like a dead horse that's been beaten to much.
I am glad you are a student, it is always good to further your education. However, it sounds to me like all your knowledge of the workforce comes from a book, I have been working since the mid nineties and things have never been as bad as they are now, I do not just blame the companies, our corrupt federal officials and the banks have to assume a large amount of responsibilty as well, btw, I have an AS in computer programming, I graduated with a 3.97 gpa in 2010, and am currently going for an AS in networking and servicing, I finished my first semester with straight A's. Jobs are few and far between in either field right now in my area, which is why I plan to move when I finish. You need to look beyond the books though, where I live used to be a mecca for furniture manufacturing but more and more plants are closing everyday, I know people who have worked at places for 15 years or more and are now having to struggle because their job was outsourced or they were replaced by temp workers who make way less than their full-time counterparts. I still stand by my opinion that profit over people will be the downfall of the whole damn economic system. There is no equilibrium right now.
My dad works at a company that's been in the process of moving production away from Germany to east Europe for the past few years due to the labour being cheaper there, believe me I know what goes down in the "real world". He even had to work under 5 different bosses for a time, one of them only stayed for about a month before being fired and replaced again.
Look at Siemens, their company image is that of a "family company", they even offered one of my former class mates a high paying job training due to his dad being a bit of a big deal in the company, he's currently with his girlfriend in a 3000 dollar hotel room in Dubai.
Part of the reason I'm still studying is due to my original field no-longer being relevant, now I'm studying to be a translator and luckily that's one of the few jobs that are still in high demand over here, due to there being less translators than stuff to translate.
And it's not getting any better. I am very proud of my book knowledge, but the real world is a different place. p.s. I have not taken an economics class, though I did take an accounting class. Your example about earning back your investment is good if your talking about an upstart or a small business, but these companies that pay their CEOs 100 mil plus a year?
Yes for them it's still a good model. A CEO who earns that much, earns that much for a reason.
He doesn't get to decide how much he earns, unless he's just that good. A CEO has the responsibility to
keep the company growing
keep the stockholders happy
increase the company's value
and secure the jobs for the work force
If he f**ks up, everyone looses their jobs and investments.
I once had to translate an interview with Maurice Lévy
the current CEO of the Publicis Groupe
, which thought me a lot about the reasons behind large pay checks.
And all this will stay as is, unless the Occupy Wall Street movement is heard and gets their way. Which I hope it will.