Economic facts of life

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Strikes, budget deficits at federal, state and local levels, corporate salaries and net profits are all in the headlines these days. Many in our capitalistic society seem to be woefully lacking in understanding some economic facts or the responsibilities of management and labor. Here are somc thoughts to cogitate.

To all in government or private industry: Take a crash economic course about budgets within a system of capitalism, as you probably missed this subject in school. Be sure that all politicians, managers and workers understand that a budget is a future plan. You don’t have to spend a budgeted item if it is unnecessary, foolish or if you do not have the money. Eliminate the common thought that: “It’s in the budget so I can spend it.”

To supermarket managers and employees: Realize that the average net profit in the industry is 1 to 2 percent, and that a good net profit for most other industries is 5 percent. Understand what net profit is and that it is not gross profit. All the expense items in a household budget plus others (rent, supplies, maintenance, depreciation, insurance, health, property, business interruption, workers comp, taxes, licenses, advertising, selling and office supplies, employer FICA and other payroll taxes, accounting, office and secretarial payroll, legal, retirement, interest, etc.) must be paid out of gross profit. All employees in any business are entitled to a “just’ wage, which should not be slave wages or unrealistically high wages. Management and labor have a public trust to reach a just wage within competitive considerations.

To striking government workers: Check out your employment options in private industries. If you have a better offer than you now have, take it. You may find that your government pay and fringe benefits are superior to that being paid in your area by private industry, particularly considering your health plan, sick, holiday and vacation pay and retirement benefits.

To corporate directors and executives: Make sure your salaries and total compensation package are not obscene in relation to the real world. If you can live comfortably on less, cut baclc on this expense. The funds freed would be better allocated among owners and workers or for the pressing needs of society. Work diligently within competitive parameters to pay a just wage to your employees.

To class warriors demonizing the ‘rich”: Define in each instance your criteria of a rich person. Do the poor create jobs? How many jobs are provided in your community by people who have limited capital, talent or volition to start new businesses and hire others?

To all: Be aware of the real world, that in which the masses live and struggle. World markets and jobs continue to change. You need to know what’s going on in the worId and adapt your talents to where the jobs are. Or, start up your own business if you believe you have a business plan to succeed and are willing to devote the capilal and effort to do so. lt is not easy to start a new busmess. Forget an 8-hour day or 40-hour week. Most new businesses fail within 1 to 5 years.

Ronald L. Rindge