Unfortunately, you make the classic mistake made by those who confuse investors’ expected returns with profits (with return on assets, or return on equity other terminology for profits).

A company can remain unprofitable for 10 years, yet remain afloat. The only reason it remains afloat is because based on future projections, investors expect to make money at some point. Expected Returns are based on what we refer to in Finance as Net Present Valuations (NPV), never based on profits.

Rather unfortunately, it would take six finance classes at the very least to teach the NPV concept, discuss calculation of returns, and demonstrate difference between investors’ expected returns and the accounting concepts of profits, ROA, and ROE. You can, however, attempt to discover these differences on your own account.

People who work for companies yet to turn a profit have jobs because investors expect at some point in time to generate returns greater than their cost of capital. Sears just filed for bankruptcy though it has for many years previously been turning a profit. Bankruptcy also is function of what investors expect in future.

By the way, the post is not about skill sets. The post is about people who at the bottom of company scales do not require any specific skill sets for securing of a job. Typically, such people do not need any certifications for securing jobs in for example custodial services for a firm. The post articulates it is important that if employed full time, such people ought to earn enough to pay their reasonably necessary bills, and have something left over to put in the bank as savings. The post discusses the minimum wage, not rewards to acquisition of skills.

If a firm needs a service in order to function effectively or efficiently, regardless of absence of demand for specific skills for provision of the service, people needed for the service who are employed full time deserve a living wage.

I have a PhD in Finance from a top 50 Business School — The R.H. Smith School of Business, UMD College Park, MD. I have skills. That is no reason to demand those who do not have skills, yet are needed to provide services within firms, not earn a decent living wage.

But then perhaps you disagree, believe people who lack skills do not deserve a good living — believe you only deserve a good living.

Each then to be defined by his or her own beliefs, penned words, and actions.

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