Jobs
The operation of the economic system

Burgess Note: Profits Up … Jobs Down

Burgess COMMENTARY

Peter Burgess

Profits Up … Jobs Down

The decision dynamics is the corporate world is very simple … everything gets done that will improve profit performance, and nothing else much matters.

At is core, profit is the difference between revenues and costs. Increase revenues and profit increases … other things being equal. Decrease costs and profit increases … other things being equal. Increase revenues and decrease costs, and profits will increase substantially.

There are many elements of cost, but it is wage cost that is one of the most significant and susceptible to control.

I have observed since my days as a corporate CFO and business planner that one way to increase profits is to replace a well paid American worked with an underpaid Chinese worker.

This corporate behavior is going to be the main driver of decisions as long as money profit accounting and reporting is the main