Wednesday, March 28, 2007

I'm no believer in socialism or communism, but...

...I think something needs to be done to straighten out our flawed capitalist system.

Between overseas outsourcing and the push to bring in millions of new slaves -- sorry, low-wage workers -- from Mexico, Corporate America is destroying the lives of many hardworking people to keep shareholders happy.

Consider this, as reported today by Bloomberg News:

Circuit City Stores Inc., the second-largest U.S. electronics retailer after Best Buy Co., fired 3,400 of its highest-paid hourly workers and will hire replacements willing to work for less.

The company said its eliminating jobs that paid ``well above'' market rates. Those who were fired can apply for the lower pay, company spokesman Bill Cimino said today. He declined to give the wages of the fired workers or the new hires.


Later in the story, another source is quoted as estimating that experienced Circuit city works make something like $11/hour.

And then, this:

Chief Executive Officer Philip Schoonover was paid $8.52 million in fiscal 2006, including a salary of $975,000.

This is the standard pattern these days. Companies shut down research and development departments, close outlets, fire employees, set up operations overseas and chop services, all of which makes stock prices rise.

Again, I am a big supporter of the capitalist system. What I find abhorrent is the dominance of Wall Street and company shareholders who, eager to increase income right this moment so they can turn a short-term profit on their stocks, are willing to hurt workers and, in the long run, damage the competitiveness -- and viability -- of the companies they "own."

Certainly, any good company should try to keep waste to a minimum. An $8.5 million annual compensation package for a CEO is waste, in my opinion.

But if current trends continue, the number of people in this country to can afford to buy anything beyond basic survival needs will dwindle to a point where sellers of "luxury" goods will have no market.

If indeed sacrifices must be made, they should begin at the top.

But in our current greed-driven system, they don't.

I have no answer to the problem -- not a practical one, anyway -- and am certain government should not meddle.

Maybe this, like so many problems we face, can't be dealt with without a miracle, in this case corporate executives accepting sensible compensation and putting the good of their companies and employees ahead of the stock market.

As I said: only a miracle can fix this.

7 comments:

lowandslow said...

Very astute, Scribbs. The fix? Beats me. One thing, though...I fail to see how we, the consumers, benefit by these multi-billion dollar mergers. Economies of scale, yes, but as you say, at what cost? There WILL be a day of reckoning.

TE said...

The governator just this week approved as much as 29% pay raises for top cabinet members in an effort to attract and retain employees.

These raises are not new money, but will come out of each department's current budget.

Workers and customers do less with more.

Interested said...

Wait, Scrib, haven't you heard the wonderful news???

We won't be just allowing illegals who cannot speak english in, nope not the GMan- they are choosing the HIGH road.

Word on the street, or online, wherever you read is that GMan is actively soliciting "skilled" workers. Yeap very high tech stuff, not just the run of the mill farm worker.

Jose, bring your nailgun, stapler or other hi-tech weapon of choice and come work in A M E R I C A.

Birdie said...

what you described is the same thing that's happening over here, only our "cheap labor" comes from former east-block countries. Some of Germany's biggest companies are being outsourced or taken over... managers getting high raises, but the workers being layed out! T-online was going to drop some 3000+ workers, after just having a big successful year. Who do they think is responsible for that success? The people they are laying off!! So, I hope they go bankrupt now..... would serve them right!

John said...

I worked for one day at either circuit city or best buy in greensboro. Not even sure which. It was not for me.
Maybe they'll outsource retail via video call to Sri Lanka, or go to giant vending machines.

MrScribbler said...

Oddly enough, John, the supermarket where I shop has a giant vending machine from which one can buy iPods and other small electronic trinkets. Slide in your credit card and push the button, just like a soft-drink dispenser.

No prices are listed, so I don't know how this compares to buying from an electronics store or via the internet.

Machines are taking over, but once they've killed off all the humans, who will they sell to?

KauaiFinn said...

Greed, greed, greed, greed, greed, greed, greed, greed, greed, greed, greed, greed, greed, GREEEED!!!!

I agree.
Only a miracle can fix this.

Makes me want to cry...

And return to Finland.

Socialism is looking better and better all the time....