American corporations need to re-learn the lesson Henry Ford gave the world in 1914, when he instituted the $5 day.
Ford's reasoning was simple -- pay workers enough so that they can afford to buy the product they produce, and the company will sell more product and make more money.
American corporations have forgotten that lesson, and that's one reason our economy is struggling. Corporations racked up record profits in the third quarter of 2010. That's right, record profits -- 30 percent over the previous year. Search the internet fot the phrase "3rd quarter corporate earnings record" and look at the long list of companies reporting record earnings.
Yet wages remain flat. And that means demand remains flat. People who are not getting raises feel uncertain about their jobs and are careful with their money, especially when the corporate media is mostly silent about the record profits corporations are raking in and stressing gloom and doom.
In order to put more demand into the economy, the Obama administration extended the Bush tax cuts, which disproportionately benefit the wealthy, who won't spend the money anyway. The thinking was that the proportion of money going to 98 percent of the population would be spent, creating more demand in the economy. In effect, government gave Americans a raise because corporations wouldn't.
Americans need more money in their pockets, but it shouldn't come from the government, which has to borrow money from the Chinese in order to give it to us. It should come from our employers, the same corporations who earned record profits in the third quarter of 2010. Record profits. Keep repeating that. Corporations reported record profits in 2010.
Michigan Gov. Rick Snyder claims he can revitalize Michigan's economy with an entrepreneurial spirit. What good will it do for Michigan people to start new businesses if people can't afford to buy the goods and services they invent and offer?
Americans need a raise. And it should come from corporations, not government. They can afford it. Don't let them tell you otherwise.