Thursday, July 15, 2010

So-called costs can be investments

Too many people look at many expenditures as costs as if reducing costs was always a good thing.  On the other hand, many expenditures are really investments that lead to greater income in the future.

A case in point is the reduced rent that the owner of Local D'Lish, a unique grocery store in Minneapolis, receives from her landlord*.  Rather than charge her for the total benefit that she receives from her space, he looks on reduced rent as an enhancement for his property.  He receives the benefit of an attraction for his other tenants, an attraction that will keep his building more occupied and probably even give him an ability to charge higher rent to them.

But too many employers, especially governments, look upon employees as a cost and not an investment.  If an organization cuts employees, then there is less buying power in the community.  Less buying power means less sales.  Less sales means less jobs.  Less jobs means less taxes.  Less taxes means less government employees.  Where it ends nobody knows.

When Grover Norquist drowns government in his bathtub, will he have enough water to put out the fire in his kitchen?

* "Grocer specializes in stocking small-town flavor in the big city", Dick Youngblood, Star Tribune, 2010-07-15