neverfail wrote: ↑
Fri Sep 08, 2017 8:17 am
His observation about restructures I believe is still valid - as it coincides with one I gained when I was once caught up in. Some people lose their jobs while those who keep them have more work pushed on to them.
This is actually something good. It is called productivity improvement. The workforce is said to be more productive. Three men doing the work previously done by four is something to be celebrated. Productivity growth is the key to prosperity. I was surprised and a little shocked that you think of it as something bad. Let me help you to understand economics.
Here is a definition of productivity
Productivity is an economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other gross domestic product (GDP) components such as business inventories.
Let me give you a hypothetical example. Suppose you have a government owned airline, called Qantup, belonging to some small Pacific Island. It has only one airplane. The government privatized it because it wasn't doing well. An entrepreneur bought it. He noticed that he has a staff of 30 people to operate this plane. They are pilots, cabin crew, technicians etc.
He figures that he can make do with only 20 staff. So he fires 10 of them. His PRODUCTIVITY is said to have improved. With lower costs, he finds he can make a handsome profit. He now has three options:
1)Pay the staff more.
2)Pay himself a dividend
3)Use the money to get more business. This can be done in two ways. Either he cuts price of an airline ticket and maintain the service level. Or he can maintain the price of a ticket, but improve the service level. He gives his passengers steaks instead of hamburgers.
He may decide to do a bit of each, which is common in well run companies. Let's say other airlines cannot match his productivity. So he gains business at their expense. He finds that one aeroplane is not enough to handle all the business. So he buys another plane and employs another 20 people. So he has created jobs by improving his productivity.
This is how productivity gains translate into jobs and even higher wages. While the above is a hypothetical example, it is probably what happened to a real life situation, Qantas. I have already shown you a link telling you what happened to Qantas 10 years after privatization. They had more planes and more staff, despite initially retrenching people. The consumer also benefits in better service or cheaper tickets.
Think of all these blessings that capitalism has given.