Why not just fire everybody?

Yesterday, the market to be kind was “weak.” Microsoft saw its stock rally. The reason was it announced plans to fire 17,000 workers; this means more profits for the company and greater dividends and buybacks for the shareholders. This is pretty good unless you were one of the 17,000 saps that got canned. While firing workers is rewarded in the insular world of Wall Street, is this the best way to grow our economy? Henry Ford realized the answer was no. Almost a century ago, Ford shocked the country by giving his workers big raises. He did not do this out of kindness. Ford, a well known anti-Semite also known for eating grass sandwiches, was not soft and cuddly. He knew he was losing too many employees because of low wages. The costs of retraining and lost productivity far outweighed the higher salaries. He also knew he could create a whole new batch of Ford customers. When people buy stuff, the economy grows. Stock prices will rise due to increased revenues. Maybe companies like Wal-Mart and McDonalds could learn something from Mr. Ford. A well trained, productive, and fairly paid worker can be a form of rocket fuel for stock prices. It is also a lot more fun than firing people.


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