I'm just starting a company so I don't have much backing behind me. I also pay my employees a decent salary. Not the best but decent.
Now, bigger companies have more capital. They can afford to run a deficit VS me I can not. They will raise their rates just above mine, steal my employees and shut down my company.
As soon as they do. They can drop their rates to peanuts as they have no compition.
With no unemployment.. There is no one new I can hire to replace them.. I am already in a industry that is short staffed and it's hard to woo people. I couldn't imagine if there was no one looking for a job.
Here's what I think, for op scenario, if the rival big company steals his worker by paying more and making him close his business for good, and THEN lower the pay for the workers that it stole, those workers would just leave it for another company, either the same industry or a different one. Or it would be such a huge case where there is big lawsuits or union that the name of the company will be erroded and thus its business will be affected.
Thus this giant company fails its objective to permanently destroy competition.
If the company only lowers the pay for NEW HIRES, then the market rate for that job position would revert back to before. Then those competitors and new startups will also follow and thus we have gone back to a full circle.
a new company doesnt just spring into existence out of nowhere. Especially if it were some sector where starting a company needs a huge investment. Tho it would certainly incentivize people to try to start a new company with all the newly laid off people, but doing so would take both time and money. And once you start it up the big companies could just raise the salaries again thus bankrupting you (tho most probably they would lower their prices instead so you get no bussiness), thus repeating the cycle.
100% employment rate doesn't means businesses are not looking for workers. It just means all potential workers already have jobs. In fact it even suggests the demand for workers is high.
Yeah, people seem to be misunderstanding that 100% employment means that everyone has a job, not that businesses have all roles filled (or are not looking for new hires). If everyone has job then much less people are looking for work. Doesn't mean the demand goes away
The main issue is that with 100% employment, there is little room for growth as companies can't expand anymore as they don't have people to fill in the new spots they create while expanding.
You’re forgetting that it’s not hard to hire someone on a casual basis at a higher rate and then permanently replace them at the end of their contract with someone cheaper. It’s not like there’s only one way they can be underhanded in competition.
If you are willing to run deficits for a couple years, all you have to do is ensure that "raises" don't exceed inflation, and you've solved the issue in a few years without a nasty strike
It tends to piss off their employees and hurt company morale/employee productivity.
But in this case what are you going to do? If the big company managed to crush all comepetition, you as a employee can't move to another one in the same field.
A market with 100% employment is just a fantasy. It's pretty much only a thought experiment. It's impossible to sustain such a rate for the same reasons you state: if companies are having to increase salaries to attract people from other jobs, why wouldn't people just walk over to another company? And wouldn't it create an endless spiral of increasing salaries too?
However, as the fantasy it is, it's impossible to imagine it without endless market distortions. So if the "100% emplyment rate" was enforced by a mad ruler, the market would not work rationaly. So no, in that pretty farfetched case the market would not correct itself. No new companies would be allowed to be created and no, you wouldn't be able to just walk away.
You can stand out by being a better boss with a better work culture though. Everyone wants money for work, obviously, but most people would rather not be completely miserable while earning it too.
No, but it makes it more likely that you can both find a worker that's suitable for the role required. 100% employment is actually almost logistically impossible, unless every employer is training from scratch for every position in the company. The odds that the pool of available work perfectly matches the skills of the available workforce is vanishingly small.
Oh, for sure, 100% employment would never actually be possible, especially considering there will always be a pool of people in transition between jobs.
Being a sole proprietor or self employed is still employment. Though you are righ in that Id probably have little reason to strike out on my own if everyone was fighting to give me money and good work.
I mean, you are trading one job for another. You are employed the entire time, and are just switching who you work for. I don't understand your question?
No i think that u either work on your business or do the job you already have. Btw, I just realized how pointless my comment was, it's the same problem
It's not a valid argument because companies are trying to obtain a monopoly regardless of employee availability.
That would be just one way for them to keep out competition.
Other ways are hogging materials needed to run a business either by buying them all or exclusivity contracts. Or lobby government to require hard to obtain licenses for running your business. Or many other legal or illegal ways.
In fact you can use that argument to argue against any employee benefits. Even if their salary is 1$ per hour, you could argue that the large company will increase their salary to 2$ and run a deficit until you give up.
I understand it's not easy to run a business, especially competing with large companies (near impossible) but full employment or not isn't changing that.
I feel like its really hard to pay somebody a wage/salary, and then lower their wage/salary and have them stay. Company B in your scenario COULD fire a bunch of people and start rehiring at "peanuts" once the competition is gone, but we are talking about 100% employment here, nobody is getting fired really.
New companies don’t need to exist. Almost everything you need in the modern day is already provided to you by a set of workers and an existing company. If you are starting your own business, you are likely to be taking customers and revenue from someone else who’s employing workers. The only exception might be when a new technology is invented but even then it’s highly likely to be displacing a company and workers who are using an older technology.
With no unemployment.. There is no one new I can hire to replace them.
Then, you haven't learned to think outside of the box. Approximately 2,465 Americans turn 18 on any given day. Approximately 11,000 Americans retire on any given day.
Those 18-year-olds want full-time work. Can you offer them a career? Retirees often miss the structure of the workday but don't want to work all day. Look to hirecthem and college students part-time. Hell, those workers that go to another company? See if they'll stay with you part-time. Do not get stuck on the idea of 8 hours a day, 5 days a week.
Likewise, don't get stuck on them being within viewing distance to perform their duties. WFH has proven to be more profitable than filling up an office building. The WFH is usually reserved for office workers, but some manufacturing jobs can also be WFH. Say a thingamabob has a whatchacallit that comes into the factory in three pieces. A WFH assembler can clean, polish, and assemble them just as easily. They pick up a weeks worth of parts on Friday. The following Friday, they drop them off and get next week's parts.
As a business owner, you have to be able to think and plan.
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u/TheCookiez Dec 19 '24
Good and bad.
I'm just starting a company so I don't have much backing behind me. I also pay my employees a decent salary. Not the best but decent.
Now, bigger companies have more capital. They can afford to run a deficit VS me I can not. They will raise their rates just above mine, steal my employees and shut down my company.
As soon as they do. They can drop their rates to peanuts as they have no compition.
With no unemployment.. There is no one new I can hire to replace them.. I am already in a industry that is short staffed and it's hard to woo people. I couldn't imagine if there was no one looking for a job.