Being in an engineering school in college I didn’t take too many business courses but the one I did take emphasized the three-legged stool as the foundations for our capitalist system.  The three foundations for business at that time were: employees, customers, owners.  It was commonly acknowledged that as long as each of these three groups were given equally importance the operations of a business remained on a level plain. I’m not sure when this theory was thrown out the window but it seems to have virtually disappeared from our financial landscape.

Now the stool is very much out of balance in that 80% of the attention of most companies in the U.S. appears to be with the owners. The other 20% must be shared between the customers and the employees. Can you even imagine it possible to sit on that stool? It used to be that employees were considered assets to a company and if you treated them right they would create a profit many times more than their costs. I know to all you MBAs out, including Mr. Romney of course, there this probably seems naive at best.

For the most part customers are not doing any better than employees. The quality of products coming out of many companies is just not up to what they once were. Maybe being produced in China is part of that? Of course this is not true across the board but it is generally the case. The common joke, even in the years that I was in the corporate world, was the people in the U.S. would take any “junk” you cared to give them as long as it was cheap! Germany on the other hand is one of those countries who pride themselves on making quality products and in most cases their products are indeed superiors to many of ours. I think the three-legged stool is much more balanced in their country than in ours.

I’m not an economist by any means but it seems common sense to me that when you do everything you can to keep employee pay at a bare minimum that you are as a result preventing your employees from being able to afford the products they are making.  When that happens across the board then company sales goes down and therefore profits suffer. Why can’t all those big shot guys getting paid more for a day than most of their employees earn in a year understand that simple concept? Are these guys really as smart as they think they are? They bought into Reagan’s “Trickle down” theories in the 1980s so why not “a living wage increases sales”?

I’m just a simple guy but it makes sense to me that the better your workers are paid the more likely they will buy your products. You don’t need a big PowerPoint presentation to figure that out. We just need a simple rebalance of the stool.

But what do I know….