Understanding capitalism

[sharkey360]

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An in-depth article about capitalism published in today's Sun.Star

Lim: Capitalism

WHILE I understand the lamentations of labor, I must disagree with their constant refrain of demanding higher wages and greater benefits in times of soaring profits (which is not even the case of Philippine Airlines).

I fail to understand why many continue to be confused about the difference between ownership and employment. When one accepts employment in a company, one should not expect to share in the profits of the company. One should instead expect salaries commensurate to one’s performance and abilities.

The rewards of unlimited profits should rightly go to those who risked capital. Employees, on the other hand, should content themselves with just compensation for their services. If they feel they are not getting competitive salaries, they should take their skills and talents elsewhere. This is how a free-market economy operates.

I don’t write in defense of the management of Philippine Airlines but in defense of capitalism. A basic tenet of capitalism is free enterprise. Businesses in a free enterprise should be free to take measures they deem fit to survive and profit. Government’s role in a free-market economy is to ensure that these measures remain lawful and just.

Outsourcing is inevitable. The global trend of business process outsourcing has, in fact, benefited thousands of Filipinos. But when local companies move to outsource to remain competitive, they are called oppressive.

Employees want job security yet they do not support the survival and growth of the companies they work for. When companies profit, they ask for a raise. When companies balk, they threaten work stoppage. Who’s being unjust here?

Why must businesses not be free to choose contractualization if such a measure ensures the long-term survival and profitability of the company? Would the employees prefer regularization even if such results in the eventual death of the company and retrenchment of all workers?

We need to think long-term. This is how a company grows. This is how a nation thrives and prospers. This is how growth and development are sustained. We cannot remain fixated on immediate gratification.

Why must businesses not have the freedom to fire employees deemed no longer productive? Is it not the case that many employees who enjoy tenure become lazy and lackluster? What is wrong with contractualization? Those who fear it probably do so because they are non-performing or under-performing. No employer in his right mind would ever let a productive employee go—-no matter what his terms of employment are.

Contractualization is not anti-labor. But it is pro-business. It allows businesses to operate more efficiently because contractualization develops more productive employees. Security of tenure does not always breed excellence. Often, it breeds complacence.

Capitalism is not perfect. Exploitation exists. Government thus acts as a regulatory body to ensure that business practices remain lawful, just and humane. Last time I checked, we still live in a vibrant democracy operating on a free-market capitalist economy. Those who want compulsory distribution of wealth should move to socialist states.

Lim: Capitalism | Sun.Star Network Online

[lorenzoleo]

Always remember this, No business = No jobs = High unemployment rate = No Salary. Dili lang pud unta mag cge hingi ug raise ang employees kay daghan baya pud swledo.anan then sometimes ang sales sa company kay dili baya na guaranteed, what if mu sulti ang inyong employer na "we will stop our business.", Patay, di bah? Mutual Relationship ra ng duha. Cge patas.an ang swledo pero next year manira ang employer or mag retrench ug employees? Hehehe! Or Same salary, but the business will not cease, Pili lang.

Kulang gani ang swledo, aw mangita ug laing source of income or part time career.

[AmorsoloX]

filipinoes are sometimes lazy and are too proud of themselves.. thats one of the reasons why the country is poor and only a few investors come here..

the labor laws are not conductive to businesses...

[sharkey360]

Always remember this, No business = No jobs = High unemployment rate = No Salary. Dili lang pud unta mag cge hingi ug raise ang employees kay daghan baya pud swledo.anan then sometimes ang sales sa company kay dili baya na guaranteed, what if mu sulti ang inyong employer na "we will stop our business.", Patay, di bah? Mutual Relationship ra ng duha. Cge patas.an ang swledo pero next year manira ang employer or mag retrench ug employees? Hehehe! Or Same salary, but the business will not cease, Pili lang.

Kulang gani ang swledo, aw mangita ug laing source of income or part time career.

There are a few locals who believe that Cebu's minimum wage should be raised from P285 per day to P500 per day. Their reason? There's "too much work and too little pay".

[dv1000]

its a cycle....
1. company takes off
2. company profit grows
3. company hires more workers
4. workers demand more and more wages
5. company becomes top heavy
6. company lays off workers
7. labor problems besiege company
8. company may eventually shut down

PAL has almost come to a full cycle trying to avoid #8. CEBPAC is just at #3 of the cycle now nearing #4. Outsourcing could well be the answer to breaking the vicious cycle.
We have yet to see a 1,000 or 500 year-old company existing to this day. Why? Because outsourcing of core business were unheard of until recently.

just my two cents worth.....

[lorenzoleo]

There are a few locals who believe that Cebu's minimum wage should be raised from P285 per day to P500 per day. Their reason? There's "too much work and too little pay".

[sharkey360]

Companies have the freedom to decide if they will share profits with its employees. They can also decide how much too.

[makie]

People look for jobs for only one thing: to have a steady income. By steady, I mean an amount that they can receive in a consistent interval. People never look for jobs with the intention of contributing to a company and make it grow, after all, they work and the company get richer. All they care about is the amount that they will receive and the benefits that they could acquire. That is the rotten mindset that most employees have. They never think about the economic/financial status of the company and all they care about is themselves.

My girlfriend is working in one of the biggest international distribution companies here in Cebu. The company that she is working for has a lot of employees who worked for the company for more than 15 years already. Since the compensation increases with tenure, most of these people's wages are more than the combined salaries of 3 regular employees who are with the company for less than 10 years.

I strongly agree that age brings either complacency or incompetence and the company that my girlfriend is working for is in a great loss in terms of productivity. 50 year olds isn't as energetic as 25 year olds and the methods that they were using decades back no longer works now. In fact, some of them are even struggling in working with computers. Catastrophic.

These people also tend to lag during regular work hours so they could extend. Overtime pay is high and is based on their regular salaries hence doubling their pay for overtimes is equal to a pay of roughly 6 or 7 regular employees.

Nobody could blame them for their ways but it's so ridiculous for employees to demand for wage increases without increasing their productivity. When price of commodities goes up, employees demand for salary increase without assessing themselves. Are they worth it? Is the company getting the same amount of service in line with their increase demand?

It's simple, increase in rates should come after increase in productivity and responsibility, not when prices of commodities rise or when employees feel that they just need a raise.

Filipinos have this employee mindset, worse, most of the Filipinos have this rotten employee mindset. They think that the company owes them.

[sharkey360]

The mindset of some people who have grown spoiled by Holiday Economics - "It is the capitalists who get rich and not the employees, therefore the capitalists can automatically afford to pay the higher wages when work is done during holidays, and they can still afford to pay employees who go on leave during the holidays."

[miyay]

like any other system, capitalism is only as good as the people who use it.

on a side note, hopefully the businessman will pay the right taxes. most loan applicants whose financial statements i've evaluated, keep two sets of books of accounts. they earn millions but as an employee, i pay 5x more in taxes than they do. their reason: kurakutan lang sa gobyerno. like the crows calling the pot black.