This is a story about profit...

If you work in a free market capitalist economy, the company you work for is run for maximum profitability. In order to maximise profits, a company will have the fewest possible admin staff it can, to keep overheads low, whilst also having as many revenue generating staff members as the demand for the company's products and services can support. There are no jobs that are created, solely for the benefit of the employee.

Think about it: if you were to quit, the things that you do wouldn't be getting done. If you're in an administrative function, perhaps that means bills not getting paid, invoices not being issued or regulatory requirements not being met. Sooner or later your business is going to get shut down if it neglects its backoffice functions. If you're in a sales function, that means less revenue for the business. Less revenue means less turnover, which lowers the company's valuation, making it harder for them to raise money for expansion. Less revenue means lower profits, meaning less champagne at the shareholders' annual meeting and tough questions asked of the board of directors.

Your salary is a payment for your time. Your time is then used to enable the company to continue to trade, or to make it directly more profitable. Your salary is offset by profits. Your salary is not a gift, out of the kindness of the heart of your boss. Your salary is way less than the profit that somebody else will pocket, for your efforts. Your salary is a price worth paying because the things that you do while at work will generate more money than it costs to employ you.

The business of employing people, is the process of getting somebody to do something instead of you doing it, but you get to keep a proportion of the fruits of their labour. The profit generated is many, many times more than the cost of the wages.

And so, we have described the ragged trousered philanthropists. It is the workers who are generously donating the vast proportion of the fruits of their labour, to an idle wealthy elite who employ them. The wages of those who toil at the bottom of the pyramid scheme, are inadequate to pay for high quality housing, the education of their children and nutritious food. Instead, the people who pick your vegetables and build your houses, and generally give themselves arthritic joints, bad backs and knackered knees, are left with ill health and a pittance of a pension when they are so overworked that they can no longer remain in the workforce.

But, we are told, you should count yourself lucky to have a job!

Lucky? Lucky? Oh, how terribly fortunate that I have enabled members of the board of directors to buy another yacht, or to purchase another rare artwork to hang on the walls of their mansion. La-de-da, how lucky I am to have been able to plump up the trust funds and offshore bank balances of rich shareholders.

But, there's nothing to stop the likes of you or I from quitting our jobs, and starting our own companies, is there?

Well, there are economies of scale and there are monopolies. Certain businesses will not be very profitable for the likes of you or I, because they have a low gross margin. When a company grows very large through acquisitions, swallowing up all of its competitors, it is better placed to capitalise on a market, because it's a dominant player. Also, the cost of administrative, legal and tax obligations as percentage of the overall running costs, is much lower for the very large company, which makes it more profitable.

When a company becomes very large indeed, it is even able to headquarter itself in a country with a favourable tax deal, so all the wealth that is generated by those ragged-trousered philanthropists, flows out of the country where they live and work, so even their public services become deprived of their vital cash.

Yes, you must consider yourself lucky to be able to have grown your company so large that it is able to cheat even the government out of the taxes that would pay for higher quality housing, healthcare and eduction, that would at least be some recompense for the fact that you see such a tiny share of the profit that you generate.

But don't companies offer their staff share options, and bonuses? No. These schemes are just scams to buy your loyalty cheaply. Share options cost far less than offering an attractive salary that would keep you with the company. When you really look into how much money you're going to make when you can finally exercise the options, you will see that your employer has bought your loyalty extremely cheaply.

The pips have been squeezed too much, and the wealth has not been shared. Large companies have not made the societal contributions that we must all make - taxes - to prevent the ordinary workers from suffering a drop in living standards. Education, healthcare, public transport, housing: these things are all chronically underfunded, while the mega-rich are opulently wealthy, living in a totally different world from those who toil tirelessly to add yet more zeros onto obscene bank balances.

It's time to soak the rich, not be grateful for our jobs.

Tags: #capitalism #banking #politics