People are hired by a business only when the business can gain from that person’s employment. For example, if a person is hired for $100,000/year (including benefits), that person must create more than $100,000 of output in order to justify his employment. Otherwise, the business will lose money.
Businesses exist solely for these reasons:
- To improve productivity in a particular niche (i.e. create a product for you more efficiently than you would do yourself)
- By improving productivity, the consumer profits (by saving time) and the business profits (monetary gain).
Your employment at a business hinges on whether you can help that business with the above reasons. When a business is forced to violate the above reasons, they will let people go to allow the business to survive and grow.
When you are talking about all the businesses out there, there is a storm a-comin’.
In a note out Tuesday, Rineesh Bansal, an analyst at Deutsche Bank, wrote that the US economy was striving to achieve three outcomes: higher wages, more inflation, and higher profits.The problem is that it can only pick two.