Very few people become a billionaire by accident… Sure, there are tech start-ups that managed to create a product, app or service that took off and caused the company value to increase exponentially. And some of those tech entrepreneurs managed to sell their start up, that probably cost them thousands to start, for millions or even billions…
But, by and large, when a new company enters the market, in order for the stakeholder(s) to become wealthy, there must be a plan. We are part of that plan… But not in the way some people seem to think. No, I do not make the Waltons and the Bezos’ wealthy with my purchases. I am not the reason Amazon is about to become a trillion dollar company. None of us as individuals have that power. And none of us as individuals have the power to stop it from happening. We barely have the power as a unit to stop it.
Here’s how it goes:
The minimum wage.
Now, I could leave it at that… Because that really says everything. But let me give an explanation.
The minimum wage is not an abstract figure. It is not set by the government in a unilateral manner. It is not a random amount nor is it calculated solely based on what is a liveable wage. The minimum wage is the result of lobbying by the unions and the businesses in the region in question. Now, the unions are usually made up of the workers or of people who genuinely want to fairly represent the workers. They pay taxes, they elect officials, they contribute to the economy… On the micro level. The businesses on the other hand are run by people trying to consistently make supernormal profits, they contribute to the GDP at the macro level. They create jobs, and not just for the company but for farmers (produce, livestock, etc), suppliers (stationary, equipment, etc), logistics (telecommunications, trucking, etc). Many of them bear the insurance burden that should keep people healthy because it subsidizes access to health care. They provide people with disposable income so they can purchase what is produced and provided. It keeps the economy moving. But they still need to make the most money possible. For themselves though. Not for the government. Not for the economy (though their expenditure creates boosts, especially as they acquire luxury items). For themselves and their families and the lifestyle they want to live and perpetuate (oh yeah, that lifestyle, is really bad for the environment). For. Themselves. And in order to do that, there needs to be a balance.
This balance is found in the manipulation of their human resources. And the most effective way of manipulating human resources is through money. So, they lobby the government, through various measures, some of which are (allegedly **rolls eyes**) illegal and largely unethical. They threaten to shut down factories and warehouses, move stores from entire communities and states, cut off purchasing from local suppliers, cut off goods and services from local consumers. Where nepotism and cronyism doesn’t work, straight up extortion does. The reason it’s so easy to manipulate is because the persons who negotiate it have a vested interest in it but only one side has the bulk of the influence: the businesses. The only way the minimum wage can ever be set fairly is through the introduction of an independent body or arbiter. But, in order to do that, legislation has to be put in place… And that legislation has to be voted on by the government… And the government is largely influenced by the businesses… And the businesses don’t want the minimum wage to be increased…. See the problem?
Why is the minimum wage so important? You see, it forms the balance. It’s the perfect balance for the companies. It’s a tenuous balance for humans. A person living on minimum wage has just enough money to provide themselves with the basics, the necessities… the bare minimum… It’s the absolute least amount of money that a human requires for sustenance. It’s usually calculated at the base level of everything: basic housing, basic schooling, basic family size, basic commute, basic sustenance. So the people earning the minimum wage are expected to live at the very fringes of society. Not only that, they are expected to stay there. Their families are expected to stay there. They are expected to bequeath their minimum wage job to their children through a living will as soon as those children are old enough to work because they will never be able to provide their children with higher education, which is the key to breaking the cycle.. There are minimum wage earners who are homeless, because they don’t get paid enough to do more than show up for work. So, if they have an illness that they have to spend money to take care of, their salary doesn’t cover that. If they want to stay alive, there has to be a sacrifice because nothing more than basic medical care is calculated in the derivation of the minimum wage…
What does this mean for the companies, though? It means that their operation costs, of which wages are usually the most significant, remain as low as possible. Managers and owners can partake of profits which are as high as they can possibly be and live lavishly because the persons doing the physical work are making the biggest contribution while collecting what is literally the smallest possible remuneration by law.
For companies like Amazon, this is perfect. It allows them to manipulate entire economies. And in a twist of calculated irony, the same people who they exploit are the ones who have to buy from them anyway… Why? One of the most appealing things about Amazon is the prices… The foundation of the company’s retail model is to provide goods at the lowest possible cost. You know who needs to be able to buy goods at the lowest possible cost…? Yep! You guessed it. People who earn minimum wage. And a lot of middle income earners too. Oh! Also, the people who supply the products, because they are selling their output at the lowest possible price to the company; they too, are minimum wage earners, just on a slightly higher scale. Organizations of that magnitude and influence manipulate entire economic ecosystems through various methods of exploitation that ensure that no matter what they do, the money almost always comes back to them.
So no. People can’t simply stop buying goods from these companies. It’s all they can afford. Not only that, these super retailers and e-commerce giants are all that is available in many of these places. They’ve run everybody else out of business. There are areas in which there is literally no other option, affordable or otherwise, to get the basics. This isn’t by accident. It’s by design. It’s strategy at its highest, vilest and most capitalistic.
- Manipulate the minimum wage
- Provide products and services at prices that minimum wage earners can afford
- Ensure that they are never able to break the cycle of poverty
You want to blame someone for the existence and perpetuation of these corporations? Blame the governments. They actually do have some power. For example, in the US, if the minimum wage was fully federal, rather than calculated by state, they could increase it to one single national rate that these companies would have to pay. They couldn’t move from state to state and threaten to (or actually) disrupt microeconomics in order to force the wage to be set low. More people would be paid a liveable wage and one that allows them to provide for their families with a window to actually improving their circumstances over time. It’s possible, it’s been done. There’s no reasonable excuse that doesn’t come back to calculated exploitation.
The situation is similar everywhere there is a national minimum wage. And the solution can be similar too. But, as I outlined in a previous post, it really doesn’t benefit them to do any of that… They’re committed to providing us with the bare minimum…
10 thoughts on “The Bare Minimum…”
the thing about it is by the time people get enough power to be able to change the situation they realize that it is just how the world works and then do nothing.
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That’s something I’ve always been afraid of. I stayed away from corporate and management because I don’t ever want to be part of the problem.
This is too often true
This is quite the perspective, and as I read through it. It makes absolute sense. The company’s threats to manipulate and even move production processes, resulting in job losses and economic disruption is exactly it. It keeps the government holding the blade. How do you propose such changes without the bitter medicine, though? Which is allowing some corporations to make good on threats, in order to acquire the long term benefits?
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The only solution is widescale legislative changes. It has to start from the very top. Change the laws and the companies must adhere.
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Thanks for a thorough analysis of a widespread problem. Governments can’t continue to pay lip service talking about “poverty alleviation” when the minimum wage isn’t a liveable wage.
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To be honest I’ve never fully examined the intricacies of the whole system before but this makes sense. I think this post thoroughly explained what many of us never fully realized. The only thing is minimum wage isn’t even liveable anymore because those same companies keep increasing their prices at the same time they are keeping the wages low. It seems like a never ending cycle.
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It’s definitely meant to be neverending cycle. And it has to be broken. It’s just going to be hard to do