Famous Econonmic Law Of Diminishing Returns...We Are There!

Discussion in 'UPS Discussions' started by anonymous6, Nov 17, 2011.

  1. anonymous6

    anonymous6 Guest

    The Law Of Diminishing Returns is one of the most famous in economic production theory. I believe we are there regarding our workplace.

    it states..." law of diminishing returns states that in all production processes, adding more of one factor of production,while holding all others constant, will at some point yield lower per unit returns."

    years ago we were told that it was better for the co to have 2 employees work 60 hrs a week rather than 3 people working 40 hrs a week. they also said that the cost of injuries, extra sick days, and more accidents , resulting in these extra hrs was all factored in by the bean counters.

    we are there at my hub. most package and feeder drivers are working close to the max now for the last several yrs.

    but how do you factor in the "intangibles?"

    like lower moral , job dissatisfaction, unhappiness, and other negative attitudes that customers pick up on. not only that by overall lower production rates. this has to be costing the co moolah.

    This can't be productive in the long run. whatever happened to "getting the big picture?"

  2. Coldworld

    Coldworld Taking it all back.....

    All they will do is "invent" some other time savings device and say that we can do more with less...like a device which pulls the parking break for us thus saving 1.05 seconds per stop. This will let us do 23 more stops a day.they are masters of manipulation....nothing more. Jim Casey was into efficient processes..no doubt, but even he would be wondering why were spending so much time money and effort on meaningless crap...especially when the customer isn't reaping any benefit of this...nothing. keep it simple stupid is a basic saying but still has its place in todays business environment.
  3. rocket man

    rocket man Well-Known Member

    good post
  4. barnyard

    barnyard KTM rider Staff Member

    It is only going to get worse.

    Listen to any economist and they will say that for a company to come out of the recession, they are going to have to get more productive. If a company cannot get more productivity out of their employees, that company will fail. Analysts want to hear about productivity gains during conference calls. No gains, no buy recommendation, no buy, no stock price increase, no stock price increase, angry stockholders.

    As long as UPS is a public company, there will always be demands for more productivity from employees. It is an economic fact of life.

    The current economic reality in the US is that the shareholder is king, the stakeholder matters not.
  5. Coldworld

    Coldworld Taking it all back.....

    It has always been about the shareholder,not just in this economy...but always.
  6. satellitedriver

    satellitedriver Moderator Staff Member

    Mathematical proof of the "rule of diminishing returns".
    UPS stock.
    First day of the IPO in 1999,

  7. Coldworld

    Coldworld Taking it all back.....

    They also have said that on average companies have hit a wall on production....you can only squeeze so much out of already beaten down employees....what this means is companies have to invent new things to sell,improve already invented items or take business from the competition.....and in our case the latter must apply.
  8. barnyard

    barnyard KTM rider Staff Member

    That is not true.

    There was a time when the stakeholder was considered equal to the shareholder. Stakeholder defined as the employees, the community where the business operates, etc. Companies used to provide significant value to their communities, now they look at what they can bleed out of the community and when they can get no more, they move to 'right to work' states.
  9. Coldworld

    Coldworld Taking it all back.....

    This has been happening for years....its not new.
  10. anonymous6

    anonymous6 Guest

    Re: Famous Economic Law Of Diminishing Returns...We Are There!

    I agree with you but what i am trying to say is that the co has pushed the employees to the point that will produce negative returns.( in the long run )

    productivity in our case is like a bell curve. several yrs ago we reached the peak and are now on a down curve. without great advances in technology , the downslide will continue.

    i believe that the downward trend could be reversed by getting back to basics as in treating employees right.

    it just seems like a simple solution. even in the bible it says whatever you give , you will receive a tenfold return. i don't see why this wouldn't work in business.
  11. barnyard

    barnyard KTM rider Staff Member

    Correct. It started with some tax law changes in the mid 70's. As tax law continues to favor capital gains, we will continue to see this kind of corporate behavior. One way to reverse this trend would be to raise the tax on capital gains.
  12. TearsInRain

    TearsInRain IE boogeyman

    and there's your problem

    Jim Casey had it right on publicly traded companies..
  13. satellitedriver

    satellitedriver Moderator Staff Member

    Most retirees depend on dividends from stock and interest, to supplement their fixed income.
    Dividends and interest are capital gains.
    The rate is presently is 15%.
    Would you like Grandma to pay the 39.9% capital tax rate of 1976?