Wall Street is a good indicator of how well the American economy is doing. Often, after a global recession, the American economy will quickly pick up again. To gain insight into the state of the economy, it is often taken as an indicator. Yet it gives a very unreal and skewed picture. The new trend is that companies are modernized to such an extent that products are delivered completely automatically. There is practically no human involved anymore. Unemployment is enormous, while according to Wall Street the economy is running like crazy again. What are well-functioning companies without employees and are these companies good for a country?
Well-functioning company without employees
- Modernize and automate
- Remove the expensive factor from the formula
- Invest to save
- What else does the company need?
- Developments in share prices
- Are well-functioning companies without employees social?
Modernize and automate
If the economy is not doing well, companies will look for financially favorable solutions out of their own interest. One way is to automate every business process to such an extent that practically everything happens automatically. Modernization and automation actually means that machines take over the tasks of humans. It requires an investment, but once it is implemented it will only generate money. At some point, a recession will force companies to make painful reforms that may cost money. But the prospects for revenues are so favorable that it can only be positive for that company.
Remove the expensive factor from the formula
High one-off investments are made to keep the factory running. Why then can it show very good figures? The most expensive factor in the Western world for companies is labor costs. Cutting salaries and evaporating employment contracts means that savings are made month in month out, year in year out. In addition, the company has to pay less attention to the interests of employees, because there are fewer or none of them. A major cost item is therefore eliminated by the company.
Invest to save
It is a crucial decision for the company to make this investment. The company will therefore be able to produce at much lower costs in the future compared to competitors. In other words, people come out of the bad period much stronger than their competitors and that offers strengthening benefits. The technology stands for nothing and it can be applied optimally. The investment made brings a certain profit increase after the automation round.
What else does the company need?
To keep machines working continuously, everything must of course function properly. Good maintenance is necessary to keep everything running optimally. This also requires specialized personnel, so that the production line continues to work like a well-oiled machine. In addition, everything must be properly administered. Inventory management must be supplied with raw materials in a timely manner, and production must match expected sales. In addition, thorough administration is essential behind that factory. Everything is aimed at achieving optimal just-in-time supply and disposal, so that inventory management is minimized. To achieve this, personnel are needed, but the number of employees will only be a limited proportion compared to pre-automation.
Developments in share prices
Investors put their money in companies where long-term profits are expected. By eliminating expensive costs, these entrepreneurs are much more attractive, because the share of profit on new sales is much higher. The certainty is therefore much greater. There is no longer a large portion for labor costs and that is beneficial for the company. This is very well received by investors, because good profits can be achieved. Even though the economy is not performing well, these companies can make a profit, and speculators also make extra profits. There therefore appears to be a disconnect between the development of share prices and the actual national economy. That depends on consumer confidence and working citizens.
Are well-functioning companies without employees social?
It purely depends on how you look at it. In the short term it is certainly not social, because companies make good profits, rise on the stock market and pay high dividends. On the other hand, many people remain unemployed, which means that a large part of the economy is still performing poorly. This situation will only improve when people are hired again. The automated companies will also grow again, which may require hiring more staff. However, there will be fewer people in the workplace. This will involve personnel who support business processes. Gradually, the economy will benefit as more workers are reinstated. However, in any economic recovery it will be a slow process before companies hire more people again. Until then, it will be the automated companies that benefit from the step taken and not the overall economy.
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