"The Fed closely monitors developments in productivity and wages to see if inflation is getting out of hand.So, increasing worker wages just leads to inflation, but increased productivity results in greater profits for the company. This is in line with my experience. It's best to pay your workers as little as possible. Paying any more would be unpatriotic and bad for the economy by contributing to runaway inflation. On the other hand, you really do need to squeeze as much work as possible out of every single worker. This is where non-monetary motivational elements come into play. Intimidation, micromanagement, emotional manipulation, and other PHB tools of worker control allow you to minimize what you have to pay in wages while maximizing the amount of work you can get out of your employees. It's smart business, and it's good for the nation's overall economy.
While rising wages and benefits are good for workers, if those gains outstrip increases in productivity it can create serious inflation problems as businesses are forced to increase the cost of their products to cover the higher wage demands. If workers are more productive, though, businesses are able to increase their pay and cover the costs with the increased output of goods and services."
Tuesday, July 28, 2009
Lower Wages and Productivity
I read an interesting article recently about wage pressures and productivity. Apparently, increasing wages without a greater increase in productivity is bad for economic growth and results in that terrible thing we call inflation. As said in the article: