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Sorry Robert Reich, Companies Are Not Charities
RCM ^ | 02/23/2014 | By Jeffrey Dorfman

Posted on 02/23/2015 6:57:14 AM PST by SeekAndFind

Recently, I have been having a bit of a back-and-forth with former Labor Secretary Robert Reich about labor markets (his, mine, his). While Secretary Reich stands out for obvious reasons, he is hardly alone in terms of criticizing my past columns about jobs and labor markets (if you want to join in, see my positions, for example, here, here, and here). Basically, the two main issues are that many people want jobs to serve as a delivery mechanism for social welfare benefits while I (and other conservatives) would prefer to keep the two separate and that liberals seem to have trouble understanding that both sides win in any voluntary transaction.

Beginning with the first point, critics of today's treatment of workers clearly believe that employers should provide every worker with health insurance, paid sick leave and vacation days, a safe and rewarding work environment, and a wage high enough to raise a family of four in comfort. What this ideal is missing is any connection to the real world where the laws of supply and demand operate.

Employers hire workers because they expect the worker to contribute to the company in a way that produces more revenue for the company than the total compensation cost of the worker. That means that to an employer wages, benefits, perks, and payroll taxes all count toward the "cost" of that worker.

If you add to that cost, such as by requiring a week of paid sick leave for all workers, then employers will find that for some workers the cost now exceeds the revenue generated. When that happens, workers lose their jobs.

(Excerpt) Read more at realclearmarkets.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: business; charities; companies

1 posted on 02/23/2015 6:57:14 AM PST by SeekAndFind
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To: SeekAndFind

Such a SMALL-minded man.


2 posted on 02/23/2015 6:58:59 AM PST by exit82 ("The Taliban is on the inside of the building" E. Nordstrom 10-10-12)
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To: SeekAndFind

I agree with everything the author writes...but he doesn’t seem to understand that the left does not care if more “worker” benefits kill jobs...it’s win won for leftists 1) they be come the party of free vacation for the workers lucky enough to keep their jobs and 2) the party of free handouts to the unemployed.


3 posted on 02/23/2015 7:11:28 AM PST by Tulane
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To: exit82
Such a SMALL-minded man.

Well, there are those who think "little" of him... [/Shrek reference]

4 posted on 02/23/2015 7:12:00 AM PST by CA Conservative (Texan by birth, Californian by circumstance)
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To: SeekAndFind
Employers hire workers because they expect the worker to contribute to the company in a way that produces more revenue for the company than the total compensation cost of the worker. That means that to an employer wages, benefits, perks, and payroll taxes all count toward the "cost" of that worker. If you add to that cost, such as by requiring a week of paid sick leave for all workers, then employers will find that for some workers the cost now exceeds the revenue generated. When that happens, workers lose their jobs.

PFL

5 posted on 02/23/2015 7:13:15 AM PST by Alex Murphy ("the defacto Leader of the FR Calvinist Protestant Brigades")
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To: exit82

His arguments always fall short.


6 posted on 02/23/2015 7:18:15 AM PST by nonamer
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To: nonamer; CA Conservative

It is said that he possesses an intellect that dwarfs that of most men, but I just don’t see it.


7 posted on 02/23/2015 7:21:52 AM PST by exit82 ("The Taliban is on the inside of the building" E. Nordstrom 10-10-12)
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To: exit82

Mr. Reich is far from an intellectual giant.


8 posted on 02/23/2015 7:24:30 AM PST by ez (Abashed the devil stood and felt how awful goodness is... - Milton)
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To: SeekAndFind

This is one of the most concise, easy to understand, dispassionate explanations of the relationship of wages and market forces and the disconnect from liberal ideology to the real world and unintended consequences that I have read in a long time. I think you could give this article to some, not all, but some liberal family members or friends to explain how conservatism understands basic, real world economics, then ask where they see a flaw in the logic of the concepts presented.

Probably won’t change everyone’s mind, but at least they should get what we are saying with a better understanding. They will still hate us, but maybe some will begin to see the light. Or Not.


9 posted on 02/23/2015 7:24:35 AM PST by rusty schucklefurd
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To: exit82

Note to “Meester Big” Reich and “progressive” blood suckers everywhere. Remember the First Rule of the Parasite: DON”T KILL YOUR HOST!


10 posted on 02/23/2015 7:26:00 AM PST by FiddlePig
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To: exit82

The Midget is a lawyer who went to Yale with Hillary. that is his resume.


11 posted on 02/23/2015 7:26:05 AM PST by massgopguy (I owe everything to George Bailey)
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To: SeekAndFind

” Labor Secretary Robert Reich “

Gret. Put a fast talking Marxist in charge. Also a pathological liar like Paul Begala.


12 posted on 02/23/2015 7:26:44 AM PST by stephenjohnbanker (My Batting Average( 1,000) (GOPe is that easy to read))
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To: SeekAndFind

Robert B. Reiiiichhhhhhhhhhhhhhhhhhhhhh, as Rush Limbaugh calls him.


13 posted on 02/23/2015 7:47:42 AM PST by backwoods-engineer (Blog: www.BackwoodsEngineer.com)
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To: SeekAndFind

He’s the fourth Reich.


14 posted on 02/23/2015 7:56:30 AM PST by Paladin2
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To: Tulane

See Venezuela for proof of what you said is true.

There are business ethics, though, or there used to be. Pure greed and immorality in a business will sink it’s success and rip off it’s shareholders just as quickly as will socialism. But this ethical framework is not imposed by the government nor greedy labor unions, rather by an ethical and conservative business leadership.

Today’s pure tolerance; self centered tolerance of evil and intolerance of good, is not the business ethic that works. America was built on businesses that were ethical from a social conservative (Western) point of view combined with a conservative business point of view. Business leadership went to the ethically moral, healthy, wealthy and wise.


15 posted on 02/23/2015 8:06:27 AM PST by SaraJohnson
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To: SeekAndFind
I tell my students that I learned at my 1st real job in high school that it wasn't the company’s job to pay me a great wage and benefits; it was my job to go get a skill set that would demand a better wage and benefits. That is still the employee's responsibility.
16 posted on 02/23/2015 8:27:26 AM PST by fungoking (Tis a pleasure to live in the Ozarks)
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To: Tulane

The ultimate goal of the Left is to redefine corporate charters in such a way as to MAKE them become charities.


17 posted on 02/23/2015 9:26:50 AM PST by Buckeye McFrog
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To: SeekAndFind
I don't think Freepers would be surprised to know that most libs believe businesses exist to provide jobs for people. Businesses exist to make money. If you start up a business and find you can make a nice living/earn a lot of money without hiring anybody, why would you do so?

I'm amused whenever some business person thinks about starting up in my area, the local rag asks the person how many people they're going to hire. Not what kind of service they're going to provide for the public, but how many people they plan to employ.

18 posted on 02/23/2015 10:03:35 AM PST by driftless2 (For long term happiness, learn how to play the accordion.)
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