Smalll Businesses

I estimate that nearly ALL of the significant innovation occurs in small businesses - way before they became big. The only exception I have at my fingertips now is the transistor, built in Bell Labs, which probably cannot qualify as small business by normal standards today.In a certain way, it is a tragedy to intelligent civilization that there is such a thing as "economy of scale". - nate

NoNukes writes: Not quite the right wording I would use.Doubling the productivity means making twice as much stuff in widgets per hour. The total company work-hours may remain the same. If the wages go up 25% across the board, you may now have 500 workers working 1600 hours per year versus the old 400 workers working 2000 hours per year. And they could each have 400 hours off now. This would be because the wages of, say, $16/hr went up to $20/hr so they hold the same income. Meanwhile the CEO's salary has also gone up 25%.Before:Company profit might be Psw - C, P is some productivity rate, widgets per hour, s is the sales price per widget and w is the work-hours and C is the cost, which can be separated into parts and labor. Some of the parts cost is fixed, F (tax on land used, etc.). Some is materials per widget, m, which if P goes up, they will go up, in proportion to the widgets produced per hour, times work-hours. And the labor cost, is in proportion to w, the work-hours, times the average hourly cost of labor, L. Note that L is the average of all workers including the owner's wages.So we have Company profit, X = Psw - F - Pmw - Lw = w(Ps - Pm - L) - FNow increase P to a new P' and see what a new L' does:After:X' = P'sw - F - P'mw - L'w = w(P's - P'm - L') - FIf L (and therefore L') are in proportion to the company profits (X or X'), then all workers from top to bottom can get a boost.Or even stranger.

Jon writes: ^^^ this....

CS writes: ooo, but it is so nice to get there and find they're all waiting in their seats for you.