We see it time and again. Lets run our government like a business. So, lets imagine that the CEO of the business where you work called you and 500 other employees into the cafeteria to announce the following new business plan.
- Increase dividends to all the shareholders
- Increase the pay to corporate officers and Directors
- Slash prices (revenue) on the hope that it produces more sales
- A modest increase in pay for those at the bottom of the wage scale
- They wouldn’t borrow any more money than they do now. i.e. no additional deficits to finance the dividends, executive pay and increases for those at the bottom of the scale.
They wouldn’t specify where they’d find any savings to pay for this revenue neutral plan, but said their projections were that slashed prices would generate more sales and income. Then, their theory is that shareholders would probably decide that their new income would be reinvested in the company. And with increased sales, the company may even give everyone a raise though they couldn’t say for sure right now until they knew more.
The only promises they would definitely keep were the increased dividends and executive compensation packages. They couldn’t promise to not cut employee health care or retirement packages for all workers. In fact they were going to authorize cuts to those program as part of the new corporate fiscal plan, in case the sales didn’t materialize and they needed to balance the corporate budget.
In other words, if the revenue projections turned out to be wrong, they wouldn’t reverse the dividend and executive pay increases, they’d cut employee costs and benefits. So capital and executives reap any rewards with no risk. Labor accepts risk and a chance that the cuts in pricing will create more profit AND that the profit will be passed on to them.
Oh….and the CEO also announced they were attempting to decertify the employee union.