Corporate America: Don’t Kill the Goose that Lays the Golden Egg

golden eggCorporations and the Middle Class

President Obama recently proposed that Congress enact legislation that would provide an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment, a $100 billion extension of the business tax credit for research and development, and $50 billion over the next decade to improve roads, rails and other infrastructure, to create jobs in America. However, CNN Money wisely reports, “the tax breaks might actually cost some jobs if a business buys technology from overseas that improves productivity rather than hiring more U.S. workers.”

While tax breaks provide incentives for companies to invest, Congress must insure that investment tax credits apply only for American made products which result in American jobs. In addition, Corporate America must be asked to contribute its fair share to create good-paying jobs for Americans.

More than 14.9 million American workers remain unemployed while America’s employed are being squeezed for more productivity as wages continue to fall and Corporate America continues to profit at the expense of Americans.

We must reverse the cycle.

According to Newsweek columnist Robert Samuelson, companies on Standard & Poor’s 500 index are “sitting on huge cash reserves: a record $838 billion.”

Just as President Obama wants to use tax incentives funded by taxpayers to help create jobs, Corporate America must accordingly act responsibly and also invest in our nation.

Corporate America has been cutting jobs while sitting on a record $838 billion. This action is reminiscent of the Goose that Laid the Golden Egg story. There was a special goose. Every day the goose would lay a golden egg that made a man and his wife very rich. The couple thought if they could cut the goose open – they could become even richer. So they killed the goose but found that there were no golden eggs inside, and because the goose was dead, no more golden eggs were produced.

Labor is America’s goose that drives our economy at home because labor produces real wealth and wages, the golden egg, that builds our economy from the ground up. If we continue to out-source American jobs to foreign countries and cut our workforce and reduce wages there will be no more golden eggs to sustain our nation’s economy.

A simple premise supports the economic benefit derived from good-paying middle class jobs. When Americans work and are paid good wages, income enters the stream of commerce. Workers in turn spend in restaurants, car dealerships, shops and other local small businesses. This generates income for businesses and revenue for our cash-strapped local governments to pay for public services such as schools, public safety, roads and libraries.

Henry Ford understood the progressive concept of creating good-paying jobs because he helped to create the middle class. In 1914, auto workers were paid an average of $2.34 a day and worked a 9-hour shift. Ford shocked the world when he increased many of his employees’ pay to $5.00 a day and reduced the shift to an 8-hour work day. His foresight enabled Ford employees to lead more productive lives with their families and also allowed them to participate in the American dream of owning a home and purchasing a car.

Similarly, Corporate America must step up before it is too late and invest its record $838 billion by creating more American jobs. Investment in rebuilding outdated energy, transportation, communication, sewage and water infrastructures and manufacturing plants will benefit our nation’s long term economic development and is good for America.

tracy-emblemAmerica has always been the land of opportunity which is why Corporate America must begin to renew its investment and partnership in our nation’s job force and keep America’s promise to keep the American Dream within reach.

To ignore the plight of the American worker will kill the goose that lays the golden egg.

Tracy Emblem

Tracy Emblem is an attorney in Escondido.

Published by the LA Progressive on September 14, 2010
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Comments

  1. The offshoring is all about ‘exchange rates’. China has been allowed by the WTO and the USA to set an exchange rate that benefits China. If the USA wants to do something useful and challenging for its military, then it needs to tell China to raise its exchange rates dramatically or be bombed flat. The same with India.
    Corporate executives get paid big bonuses for offshoring because it goes right to the bottom line. That is because they can cut labor costs by 80%. That would not be so if the Chinese Renminbi was allowed to float versus the US dollar.
    Just think of CEOs as automatons. If they see more bonus from an action that is what they will do. They are total narcissists.
    So the rules of the game need to be changed. They will follow the rules as they do not want to go directly to jail.
    In any case the USA because of offshoring has lost its tax base. It cannot survive much longer. So we will see real hope and change because it must be so. Do not count on it from the Repubs or Dems though as both parties are bought off.

  2. In her comments it is apparent that Elaine cares a lot about her country and her fellow citizens but that is not sufficient cause to excuse opinions given as statements that are basically inaccurate.

    An understanding of some basics in economic activity is required before one can comment intelligently about economic policy, about the economic needs of constituents of a democracy, and about the social interaction of groups within a society. Unions never put dues money into a pension fund (except for the pensions for the union staff) — the dues are the funds for the operating budget paid by the union members to support their union. Pensions are negotiated benefits paid into by an employer and in some instances by the employees out of the wealth created by the work of the employees. Elaine’s remarks on union matters demonstrate an anti-union bias and the lack of knowledge begs questioning her capacity to give advice to unions, union members, or the public.

    Investors don’t do the “production” work of business and corporate managers don’t create wealth, they in fact are a “cost” because they don’t produce anything. In reality workers apply labor to materials (or in some cases provide “services”) etc to create the wealth (revenues) that pays management and investor dividends as well as the workers own wages, health costs, pensions, the whole shebang.

    US Corporate taxes are not the highest in the world contrary to the prattle of tea-party-ers, Republicans and other conservatives. The USofA, in fact, has some of the lowest corporate taxes of any developed nation in the world. All the northern European countries have much higher tax structures and provide better benefits than in the United States. Elaine, it would behoove you to do some learning into world economics, tax structures, production of goods and the creation of wealth as it would improve your analytic ability. A real good area to look at would be the definitions and applications of the concepts of cost centers versus revenue centers — terms used in business accounting to hide the fact that the workers create the wealth that everyone lives off. When those who idolize business people get tired of planting kisses on their idols hindmost quarters then some clarity will come to their lives and they will begin to experience reality. As the author of the article wrote, “labor is America’s goose” [that lays the golden eggs].

  3. America’s corporations cannot renew its effort in America’s future now because Obama is taking over the financial of the businesses & Wall Street & causing corporations to pay more taxes then any other country in the world. He has destroyed the American Dream by regulating businesses, telling them what they can & cannot pay their CEOs and Wall Street and indoctrinating our children, forcing health care that is not worth the paper it is written on to every American eventually. The insurance rates that are going up now is because of Obamacare that is already collecting taxes to pay for it in 2014 & it is only going to get worse. He will not finish building the fence at the border. He will not handle the immigration law. He wants to spend 50M on a stimulus bill for small businesses that small business does not want. No one wants to hire anyone or buy more equipment because we do not know what Obama is going to do next. He wants to let Unions take advantage of their members by using their members dues to help Liberals get re-elected like Pelosi, Reid, & Boxer instead of putting their member dues into the pension funds. Which the pension funds won’t be there when they need them. The Unions are only concerned with their leaders well being & getting the people they want in office so they can continue getting pay back from these political thieves. Everyone is scared to move until Obama gets the heck out of our lives & gets rid of Big Government. Then on top of all this he runs to the UN like a little tattle tell kid to tell them how bad we are treating unions here in America. I want the UN & IMF out of America. They need to move to Germany or somewhere else who may respect them more then I do.

    • I am sorry Elaine but you are obviously ignorant about the structures of unions and the use of union dues. Dues are the operating costs of the union paid by the members to support their union and pay the costs of representation. Pensions are a negotiated benefit.

  4. What facts can you site to show that labor as the golden goose? The employers are the golden goose and we want them to lay their golden eggs in America and not overseas. What we need to do is have government policy that ensures firms create jobs in America and not overseas.

    Companies can not invest in products no one will buy, they only make enough product to meet demand. Ford did not have a union or government telling him what he could or could not do, he did what was best for his bottom line. If everyone stopped using lawyers, your well being would suffer and no amount of telling you to make more product would help your business.

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