Ok but after covid, prices skyrocketed compared to pre-covid levels and we got massive inflation. Wages didn't suddenly skyrocket at the same time, hiring rates didn't go through the roof, corporate profits did though. So why would prices suddenly returning to pre-covid levels require everyone to be fired and customers to disappear when the economy was working great before? Would it just be that companies would start mass layoffs to prevent a short term decline in quarter on quarter profits which would start a negative feedback loop?
Because of how corps react to lower prices. They would just lay everyone off. Deflation itself isn't the issue, it's how little protections actual working people have and how much incentive corps have to keep their stock price high. Being able to sell something for less means less profit for the corps which is a big problem for corp leadership. So the solution is to temporally increase profits by getting rid of staff.
That's because consumer spending is starting to go down and families are starting to cut back. So they have to either increase prices, which they're already doing and that's not working, so they have to cut costs, and the number one way for companies to do that is to cut employees.
Yes, the record profits are because they keep cutting the cost of labor by cutting off employees.
Sorry if my original comment didn't make sense. I'll try to explain it differently. Companies right now are raising prices. Every time a company raises prices, no matter the industry, people will stop buying it or buy less of it. But they need to keep making more profits, that's the American growth system.
So, they are continuously cutting more from the workforce, whether that is firing employees, laying them off, or replacing them with cheaper workers while letting go of all the better-paid ones. That way, the profits are steadily going up on a chart, but they are still laying off more and more people while raising prices.
To add; productivity has hit a sort of "critical mass" where corporations can over-produce goods (cheap) so easily that the only way they can cut the base expenses is to cut labor. There's no other way to increase profits in an over-saturated market.
Think about the constant "new flavor" for snack foods, beverages, fast food, etc. The market for the "standard" flavors is so saturated and the market tolerates only so much price increases before people stop buying - so by making their normal everyday product seem "limited" or "exclusive" they trick consumers into buying more..................
........when consumers are still buying less, the only other recourse is to cut those labor costs and over-work the remaining staff.
380
u/leconteur 6h ago
If you get to keep your job or customers.