Lessons in Liberalism: Outsourcing...or how rich people screw the poor.
Once upon a time, people that couldn’t afford to own their own business or didn’t want to, went to work for people that did.
Some worked in small businesses, some worked in factories.
One day a man that didn’t work, saw factory workers that did and came up with a novel idea: Convince the factory workers that their boss was paying them too little.
The man that didn’t work told the workers, “band together, they can’t fire you all at once, they need you, in fact, I’ll negotiate for you to get you a higher wage if you let me wet my beak a little” (familiar reference from the Godfather II).
Before the man that didn’t work came, there were 1,000 people working at the factory each making $10 per hour. They liked the idea of making more but seemed content with their wage...until the man with no job came and told them “what they should be making”, and the workers became angry!
A month later, the man with no job struck a deal with the people that did and he went the next day to meet with the owner, as a negotiator for the people.
The negotiator told the owner, “you should pay more, these people work hard, look at your house, look at your car, you are a very rich man, you should share your wealth”.
The owner told the negotiator, “Once I was a worker just like them and I saved every penny I had. I started this factory from my garage with my son. The first ten years of my business I barely survived. What you see now when you say I am rich is a result of me denying myself wealth for so many years to build the business. I share my wealth sir, I give these people a job. The wages I pay them go to other businesses in town, help pay for schools, and one day, maybe one of my workers will start a company of his own just like me”.
Disgruntled, the negotiator said, “You rich people are all the same. I didn’t want to do this, but I have already talked with all of your workers, and if you don’t pay an additional $2 per hour, they will all quit tomorrow”.
The owner refused to pay and the next day, the people all quit working and instead bought signs and walked around in circles protesting the owners wage practices that at one time were fair, but were now considered unfair.
For the next week, the owner lost revenue because his factory could no longer fulfill orders, and the people lost wages because walking in circles with signs pays nothing.
On the 8th day, the owner could no longer stand the lost revenue and agreed to give in to the negotiator.
To pay for the increased wages, the owner raised the price of his products made in the factory by 20%.
For the first 6 months, the owner lost 20% of his sales to his competitors that were still paying $10. Something had to be done he said. The next day, he got rid of 10% of his workers and reduced the price of his products by 10%. He regained some of the sales he had lost but not could not recover them all.
The town where the factory was located had a population of 10,000 people. Unemployment for the town quickly shot up from 4% to 5% and the 100 out of work couldn’t find work anywhere.
It was election time in the town and one of the politicians, Donald Democran was losing by a large margin to another man, incumbent Ronald Repubo.
Mr. Democran heard about the local factory owner firing some of his workers and over breakfast ran into the negotiator. The men became fast friends and both were concerned about the now unemployed workers. The negotiator told Mr. Democran, “the problem with our town is people like the rich owner of the local factory. These rich guys think they can pay workers peanuts while they live high on the hog. We should make him pay”.
Mr. Democran said, “I should raise his taxes 10%, but only his and those like him. Can you get the 100 unemployed and the 900 employed at the factory together and convince them to vote for me? Tell the 100 that I will use the tax increase on the rich owner to pay for some of their housing and food until the rich man comes to his senses and brings them back to work”.
The negotiator said, “sure...consider this election over”.
Since only half of the town actually voted, Mr. Democran won in a landslide.
The owner and the other wealthy businessmen in town were now made to pay 10% more from their earnings and give it to those they fired and others that didn’t want to work.
When news spread across town, 50 people that had very low paying jobs decided it was just as fruitful to stay at home as it was to work and they quit, now raising unemployment up another 1/2%.
To pay for the new tax increase, the owner fired 50 more people and raised his price on his products another 5%. Sales decreased. Since many people in the town bought the products the factory owner produced, they now had to pay more for their products.
A year later, the negotiator was back in the factory owners office...”you have raised prices and fired people because you won’t share your great wealth earned on the backs of your workers. If you don’t pay your remaining 850 workers an additional $2 per hour, tomorrow they will quit”.
The owner refused to pay and the next day his workers quit and walked around with signs outside of the factory.
A week later, the owner relented and now paid his workers $14 per hour.
Just like before, the owner increased the prices on his goods another 20% and his sales again went down 20%. This went on for 6 months...
Faced with shutting his business down, the factory owner fired another 100 people, bringing the once mighty force of 1000 workers down to a mere 750 two years later.
Production suffered. Sales suffered. The workers were making more money but were having to work much harder to make up for the 250 that were now out of work.
The unemployment rate of the town shot up dramatically as owners of other businesses had to fire their employee’s to pay for increased wages as a result of the negotiator visiting them also.
The newly elected politician, Mr. Democran was now faced with more people out of work and was hearing from them daily asking him to help them find work. He said, “I can’t find you work right now, but I can make people like the evil factory owner pay more for their greediness”.
The next day, Mr. Democran raised taxes on the factory owner and those of his ilk an additional 10%.
Again, the factory owner raised his prices and now sales were in the toilet. He was losing more sales than he could count due to cheaper made goods from a town 30 miles away.
Faced with shutting down his business, the factory owner decided to hire people from a neighboring town for a newly formed (and secretive) 4 hour shift between 1 a.m. and 5 a.m.. The law in his town forbid him from hiring people outside of the town limits, but the workers agreed to work for $10 per hour and he figured it was the only way to survive.
A month later, Donald Democran got word of the news and revoked the factory owners business license.
Immediately all of the 800 people lost their jobs. Unemployment soared. The factory owner dismantled his factory and moved to a town far, far away.
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Faced with shutting his business down, the factory owner fired another 100 people, bringing the once mighty force of 1000 workers down to a mere 750 two years later. Production suffered. Sales suffered. The workers were making more money but were having to work much harder to make up for the 250 that were now out of work. I don't even know what to think anymore.
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Since many people in the town
Since many people in the town bought the products the factory owner produced, they now had to pay more for their products. That's so logical, I think.
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factory owner decided to hire
factory owner decided to hire people from a neighboring town for a newly formed (and secretive) 4 hour shift between 1 a.m. and 5 a.m.. The law in his town forbid him from hiring people outside of the town limits, but the workers agreed to work for $10 per hour and he figured it was the only way to survive.auto insurance <!--Session data-->
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The owner told the
The owner told the negotiator, “Once I was a worker just like them and I saved every penny I had. I started this factory from my garage with my son. The first ten years of my business I barely survived. What you see now when you say I am rich is a result of me denying myself wealth for so many years to build the business.
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