Hiring employees is vital to our prosperity. If everyone
worked for himself, larger enterprises would be impossible.
Millions of independent workers could never come close to
duplicating the efficiency and productivity our large enterprises
achieve.
Prosperity requires that many individuals work under the
direction and control of a single commander. There are two
ways of assembling workers -- voluntary cooperation and
slavery. The western world long ago rejected slavery for good
reasons. This leaves only voluntary employment as a foundation
for prosperity. It is important that we understand how
employment works for the good of all.
Some things appear complex. One might marvel at the
complexity of a brick mansion. The mansion is thousands of
simple bricks placed one at a time. To understand the building
of the mansion we must understand the simple placement of
thousands of individual bricks. The same is true of most
complexities.
Hiring of a large work force may seem complex. That
work force is brought together by hiring one person at a time.
The reasons for hiring each of those workers are few and simple.
Free market businesses hire employees for one reason --
to produce something. The reason for producing something is
also simple. The business hopes to increase the value of the
resources it buys by producing something of greater value.
If the product of the business is more valuable than the
resources consumed, the business can sell the product for more
than it cost. This is how businesses earn profits. Customers are
the final judges of the value of the product.
A business expects that each employee will produce net
value for the employer. The business that doesn't expect the
employee to produce net value doesn't hire.
Employees who have no concern about their productivity
or the business's profits are very foolish. Some employees brag
about how little they have to do to keep their jobs. Such
employees are doubly foolish. Their continued employment
depends on the employer not discovering how worthless the
employees are, or the employer being forced to keep the
employees.
It is only common sense that an employer will be far
more concerned about keeping an employee who produces
$150,000 of net value than one who produces $10 of net value.
The higher an employee's wages rise, the lower his job security.
He becomes less valuable to his employer. Demanding higher
wages and more job security is trying to run in two directions at
the same time.
The employee who produces $150,000 of net value for
his employer and is paid only $50,000 may not be pleased. The
employee can demand more and quit if he doesn't get it.
Chances are the employer will pay more to keep the valuable
employee. An employee who is worth only $10 to his employer
isn't likely to get anything by demanding it.
If the employer won't pay the valuable employee more,
that isn't likely to be much of a problem for the employee. If he
is worth $150,000 to his employer, chances are he will be worth
a lot to another employer. Productive, valuable workers don't
remain unemployed long in free markets.
Voluntary employment works to everyone's advantage.
The employer has to raise the pay of his valuable employees to
keep them. Employers bid wages up to the maximum they can
pay and still earn enough profit to attract investment.
Employees who want higher pay have only one option.
They must seek ways to produce more value. They may do this
by finding an employer that will provide the facilities and
environment to enable them to be more productive. Or, they can
increase their productivity through developing new skills or
improving old ones.
Voluntary, free market employment pushes everyone to
be more productive. Increased productivity is the engine that
powers increases in our standard of living.
* * * * *
* * * *
* * *
* *
*
Copyright 2012
Albert D. McCallum
18440 29-1\2 Mile Road
Springport, Michigan 49284
worked for himself, larger enterprises would be impossible.
Millions of independent workers could never come close to
duplicating the efficiency and productivity our large enterprises
achieve.
Prosperity requires that many individuals work under the
direction and control of a single commander. There are two
ways of assembling workers -- voluntary cooperation and
slavery. The western world long ago rejected slavery for good
reasons. This leaves only voluntary employment as a foundation
for prosperity. It is important that we understand how
employment works for the good of all.
Some things appear complex. One might marvel at the
complexity of a brick mansion. The mansion is thousands of
simple bricks placed one at a time. To understand the building
of the mansion we must understand the simple placement of
thousands of individual bricks. The same is true of most
complexities.
Hiring of a large work force may seem complex. That
work force is brought together by hiring one person at a time.
The reasons for hiring each of those workers are few and simple.
Free market businesses hire employees for one reason --
to produce something. The reason for producing something is
also simple. The business hopes to increase the value of the
resources it buys by producing something of greater value.
If the product of the business is more valuable than the
resources consumed, the business can sell the product for more
than it cost. This is how businesses earn profits. Customers are
the final judges of the value of the product.
A business expects that each employee will produce net
value for the employer. The business that doesn't expect the
employee to produce net value doesn't hire.
Employees who have no concern about their productivity
or the business's profits are very foolish. Some employees brag
about how little they have to do to keep their jobs. Such
employees are doubly foolish. Their continued employment
depends on the employer not discovering how worthless the
employees are, or the employer being forced to keep the
employees.
It is only common sense that an employer will be far
more concerned about keeping an employee who produces
$150,000 of net value than one who produces $10 of net value.
The higher an employee's wages rise, the lower his job security.
He becomes less valuable to his employer. Demanding higher
wages and more job security is trying to run in two directions at
the same time.
The employee who produces $150,000 of net value for
his employer and is paid only $50,000 may not be pleased. The
employee can demand more and quit if he doesn't get it.
Chances are the employer will pay more to keep the valuable
employee. An employee who is worth only $10 to his employer
isn't likely to get anything by demanding it.
If the employer won't pay the valuable employee more,
that isn't likely to be much of a problem for the employee. If he
is worth $150,000 to his employer, chances are he will be worth
a lot to another employer. Productive, valuable workers don't
remain unemployed long in free markets.
Voluntary employment works to everyone's advantage.
The employer has to raise the pay of his valuable employees to
keep them. Employers bid wages up to the maximum they can
pay and still earn enough profit to attract investment.
Employees who want higher pay have only one option.
They must seek ways to produce more value. They may do this
by finding an employer that will provide the facilities and
environment to enable them to be more productive. Or, they can
increase their productivity through developing new skills or
improving old ones.
Voluntary, free market employment pushes everyone to
be more productive. Increased productivity is the engine that
powers increases in our standard of living.
* * * * *
* * * *
* * *
* *
*
Copyright 2012
Albert D. McCallum
18440 29-1\2 Mile Road
Springport, Michigan 49284
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