Why are certain businesses making profits in a stagnant economy? The answers lies in what Andrew Carnegie established as his way of achieving profits. Back in the latter part of the 19th century Andrew Carnegie, an immigrant, became a billionaire. He hired the best people for manager positions in his steel business to achieve efficiency. But the one cardinal rule that prevailed above all others for growth was to cut costs. As a young man working for others, he saw how wasteful spending and procedures undermined profits. He recognized that profits were the engine driving business growth. So waste, wherever it was found, had to be eliminated. Money had to well-spent and inefficiency rooted out.
Carnegie’s company like many today faced government regulations and recessions and depressions. But he planned for these downward economic times by laying off workers and using his profits to modernize his operations. This allowed him to compete with foreign steel companies. HIs judicious use of profits enabled him to hold on until prosperity returned. Once the economy started to grow again, he expanded his operations and hired workers again.
My point is that companies today faced a plethora of regulations and taxes imposed by the Obama Administration. This increases cost for all businesses so they do what Carnegie did over a hundred years ago and lay off workers as a cost cutting procedure. It is unfortunate but a reality in life.
What people tend to forget is that many pensions systems have stock in corporations. If a corporation fails, it is not just the company workers who suffer but pension investors also. Many of the investors are retirees who depend upon company dividends to supplement their Social Security. Social Security was intended to supplement not replace pensions.
In 2014 new ObamaCare regulations and taxes will again raise costs for companies. As costs go up, jobs go down. The profits made now can be a vital factor for companies in 2014. For those who depend upon their investments and pensions, profits today can be the saving factor in 2014.