Why corporate greed will eventually backfire

I am not sure if you understand how business works. But businesses aren't looking after the welfare of other companies. In fact, many companies would be very happy to see their competition go out of business. It a survival of the fittest. Wal-mart, McDonald's, grocery stores, etc. are known as transitional jobs. While this economy might change that, it simply means that they are in the practice of hiring people that will eventually move on. Their attrition rate is very high because they hire teenagers, college kids, and other people who will eventually move on to other jobs. The working conditions or wages really have nothing to do with retaining these type of transitional personal. Let's see if I can put this another way. Every time the minimum wage raises, businesses get hurt. The problem is the higher wages are, the less people that businesses can and will hire. Competition is also very fierce with companies like Wal-mart who depend on keeping their expense sheet low. You also forget that some of those profits do get reinvested into the company and that the company has to answer its stockholders (the people who invested in the company). I guess what is confusing me is that you seem to be against a company paying a CEO a big salary to retain them and yet you want them to raise wages on the minimum wage employees to retain them even though those are the most likely employees to leave within six to twelve months (for different reasons other than working conditions). I would say about 99% of the companies in the US are in what people call "survival mode." Which means they are hoarding all of their assets, not taking out loans, streamlining operations, and doing whatever they can to cut costs. It circles back to the uncertainty of the current business environment. Businesses are afraid (for lack of a better word) to spend money simply because they don't know what the future taxes/medical expenses/etc. are going to be. Wal-mart really isn't any different. But you are also forgetting another critical factor. It is an employer's market. Which means that they can hire workers at lower wages. Think of it like housing as a buyer's market.

There was one more important point I want to make. Do you know who else depends on a company like Wal-mart to make profits besides the company itself? Retirees, 401k holders, and pretty much anyone who buys stock in the company and depends on it for their future retirement income. So in a way reducing profits from the company also reduces the profit made on those stocks.

You assume that paying a higher wage means the company can't make profit. I'm not talking about going to the extreme like with the UAW where a job that would have easily been filled for around $30,000 was being done for twice that. I'm talking about a lot of lower end jobs. I actually looked at companies like Walmart. Their profit margin is so large, that assuming they paid minimum wage to 90% of their US workers and they doubled that wage, they would still make billions in profits. There is actually a lot to be said for better treatment of employees which is usually seen in terms of benefits and better wages. Employee retention is worth a lot, every time you lose an employee you lose a lot of productivity. Look at a company like Walmart. Every time they have to hire a new employee, someone has to go through applications, interview potential candidates, then they have to pay all their new employees to go sit through a meeting, go through training, pay someone to train them, reissue uniforms, new name tags, more paperwork etc. Let's just say that if walmart lost $300/month per worker in productivity replacing employees, and they could instead invest that money by paying $300/month more and retaining employees longer they would about break even there, ($300/mo is a good amount at to a min wage employee). They might lose a small margin, but in return they'd have long term employees who would produce better work. But instead of decent pay they'll try and squeeze out a 1% increase cycling through the labor pool. Hiring employees for low wages is like buying cheap tools, where we might buy a wrench for $4 a mechanic might pay $30, he could do the job with the cheap one, he makes some more money in the short term because he didn't spend $1000 on a set of wrenches, but in the long run he loses a lot more because he's always going to the store to buy new wrenches, and customers don't come back their cars aren't ready on time. How much do you think walmart loses because people see long lines and walk out or products aren't on the shelves because they're employees aren't showing up or aren't good at their jobs? Not to mention that every customer is paying taxes to give their employees welfare. As for each employee having to reinvest their wages by buying from their company, there's more than one company, there are hundreds of large companies that pay low wages. What someone at one company might not buy back from their employer someone at another company probably will assuming that other company paid a better wage. The lower income 50% of Americans save very little if any of their income, and even at increased wages they'd still spend all or most of it, so increasing lower wages without inflating prices, in the long term would increase GDP with a minimal loss of profits. The problem is that corporation are taking such huge cuts that it takes the money doesn't "trickle down" nearly as fast as it get skimmed to the top until some great damage to the economy forces the money back into circulation.

My problem is I don't think I may ever live to see the end of it at this point. It's circling the drain but we keep clogging it so it won't go down. I'm at the point now I think it'd just be quicker to pull the plug and let all these huge corporations collapse and redistribute income that way rather than sit here and suffer any more bank bailouts and corporate tax breaks. Just let them hang themselves, the sooner the better imo. Better that banks and industries collapse than our dollar fall to the value of the peso.

the US is simply inferior at making cars, that's what's caused the lack of demand. there's no evidence at all to suggest that outsourcing creates a lack of demand, not in any industry. in the automotive industry there happens to be a correlation, but that's far from establishing cause. apple, micrososft, intel, hp, and plenty of other tech companies are outsourcing and its working well for them because they're cutting costs. ford and GM failed to provide products that the public wanted, at least in comparison to toyota and other foreign car manufacturers, its as simple as that. people substitute away from their products. outsourcing is an important step to globalization and bringing prosperity and jobs to those areas in the nation that dont have the same luxury of free trade as we do. corporations are simply people, when you punish them you punish stockholders, its common sense. and as for that IMF report, why dont you cite it i think that's interesting. i dont think inequality has much to do with recessions, they're a natural part of the business cycle and inevitable. we've had over 150 recessions since the founding of the country. income inequality is necessary in a capitalist society, to provide incentives to get better and earn more. if everything was equal all the time, you'd see a deterioration of those incentives and the economy would falter