Sunday, May 7, 2017

Labor: Human Activity That Provides The Goods Or Services In An Economy

"If any man tells you he loves America, yet hates Labor, he is a liar." ~ Abraham Lincoln

Yet, this seems to be exactly the message of Wall Street, conservatives and capital investment, in general.

According to investors, workers don't really deserve the fruit of their labor.

What's wrong with giving out pay raises? Plenty, according to some Wall Street analysts
“This is frustrating. Labor is being paid first … again. Shareholders get leftovers,” wrote Citi analyst Kevin Crissey in a note to clients. 
Jamie Baker of Morgan Stanley downgraded American shares to “neutral” from “overweight,” saying the pay decision “establishes a worrying precedent, in our view, both for American and the industry.”
John Cotton condensed the Wall Street view:
"There’s always this tension between what companies would want for the long term and what Wall Street wants for the short term," said John Cotton, professor of management and director of the Executive MBA Program in the College of Business Administration at Marquette University. "As far as Wall Street is concerned, if you could pay minimum wage to everybody on every job, that would be great because that would leave more money for stockholder. 
"Wall Street, they don’t care so much long term," Cotton said. "They would rather have the company buy back stock than, say, invest in making their business more effective over the long term, because that’s not going to pay off in the next 90 days. 
"It is short-sighted, but then Wall Street almost by definition is short-sighted," he added. "If you could do something to jack up your stock price 5%, the fact that it’s going to hurt your company over the next 10 years is irrelevant."
 American Airlines CEO defended worker raises:
"As a service organization, investments in our team are investments in our product," Parker said during a conference call with analysts. "We think it's precisely this kind of investment in our people that is going to make the difference in our service. And while this won't happen overnight, we also think it's the kind of investment that will continue to drive revenue (growth) for American. And as that happens, all of you will be the beneficiaries of those returns."
For Wall Street, raises should be reserved for the CEOs that decide to fire workers and/or suppress wages.

If we want to address the increasing income inequality in our society, we need to break from this capital-worship paradigm.

"Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." ~ Abraham Lincoln

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