this post was submitted on 30 May 2024
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Labor is the source of all profit. How would the company make money if no one did anything? Companies use their control of the means of production to leverage workers into doing labor. They then sell what the labor creates to make money.
They didn't create anything themselves. They had ownership of the means and that gives them ownership of the output that they profit off of. Money doesn't just appear. Something has to be produced, which is done through labor.
Sure, sometimes an employee costs more money than they return. First, that doesn't mean they created no value, just less value than they cost to employ. Second, sometimes this does decrease profit, but is done as a short term reduction of overhead while things change, or it's just dumb business which isn't uncommon.
Charge the customer more for the finished product than what it cost to produce it. Obviously.
The simple fact is that if employees were a source of profit, businesses would all try to hire as many people as they possibly could, because not doing so would literally be leaving money on the table for no reason. But obviously that is not what goes on. When a business is in trouble financially, what's more common, a hiring freeze, or a hiring spree?
If there is no labor there is no finished product. Labor creates the thing being sold. Value is extracted from labor and sold.
This is exactly what they do. They hire as many employees as they possibly can afford to hire and have the means of production for them to operate on. That's why as a company is more successful they generally have more employees, to extract more wealth from their labor. Yes, sometimes they don't have things for them to work in that will generate more value than it costs to employ them, in which case they fire them. If they do have the ability and means for them to work on something then they are profit generating.
Yeah, when a company is doing poor financially they cut overhead. This is done as a safety mechanism because they can no longer afford those costs, not because they weren't generating revenue. There's a lot of things that can cause this, and he's it sometimes results in lower profits. The goal is to get their finances in order and stabilize, then continue to grow and expand again. The goal isn't to shrink and keep shrinking. If that created profit then the most successful companies would be the smallest ones, not the largest.