I still do some business, but I’m not as active as I once was before the “bust.” What I have seen in my limited sampling of the business world is a dramatic increase in slow pay no pay situations. It seems like the guys who used to pay in 10 days are now paying their bills out at 45 days and the guys who did net 30 payments are paying in 90 days. That affects me a bit, but I don’t have a huge number of invoices outstanding at any given time.
The slow pay trend must be having a nasty impact on larger businesses with many outstanding invoices. If many companies are delaying their payments I could see how a slow pay trend could cause a great deal of pain. This is kind of back to the “house of cards” argument that I talked about in some other posts on this site. If enough companies start doing delayed payments, its could very well crash others by destroying their cash flow.
I guess that slow pay is better than “I.O.U. pay” that is planned, and may have started, in California. Myu problem with their plan is that I can’t eat an I.O.U. and I can’t pay my grocery bill or power bill with an I.O.U. either. I’m interested in seeing how the open market discounts California I.O.U.’s if they hit the street. California gives you a paycheck for $ 3,000 and you sell the paper for what, fifty cents on the dollar? Whatever the discount turns out to be, the people who receive them will still have to peddle the paper to buy groceries.
For all of the money that has been dumped into the economy of late by the government I’m not yet seeing a lot of it in circulation. As discussed on this site, there is a lot of bank hoarding and investor hoarding of dollars. I still think that it is just a matter of time and all of that money will start to chase hard assets. We shall see.
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I’m not familiar with the details of the Great Depression, but has there been another time in US history where one state like California has been in worse shape than most of the others?
I keep hearing about its problems, but I assume there are others in rough shape too.
I hear that Arizona is in rough shape as well, but I am sure there are a number of other states that are also struggling. As I have noted in other posts, Michigan is reeling from the auto layoffs. I have read some other blog posts and articles, and the next year or two are going to be extremely difficult for them.
So far Arizona is what I’ve heard of having a rough time about it. I wonder how would people give a solution to this. Its just like “pay-slip” where the money you get is just like slipping from your hand because of the other thing you should also pay. Debts that have been left behind.
Yes i notice that situation also. It is really sad to hear about that. Here in our place also, there is also a slow pay no pay.
What will you do if you’ll encounter this “slow pay no pay” companies? Well, this could be better than “I owes you” or “IOU”. But, I can’t hardly imagine working and you get nothing in return. OMG!
I saw an article somewhere that described people recently reversing the flow of movement of the “Dust Bowl” migration of the thirties. I guess back then the prosperity was in the west?
I’m not sure if there’s a specific industry that would attract them back east now, but I think some people are looking for one.
Yeah, those we’re the times when the West was at its peak of prosperity. They’re now declining dramatically because of many problems.
I believe too that slow pay is still better than IOU. At least I can spend something with it. The thing is, slow pay has a chain reaction. If companies would pay slowly then other people who are waiting for that pay would probably b delayed on their other businesses as well until everything becomes tangled debts.
You’re absolutely correct, takatenamo. However, you got your salary but I guess, its not yet enough. Because, you’re not sure when will be the next time you’ll get your salary again, right? Do you think we can do something for those company that’s like this?
Not paying people is criminal and even though business are having a hard time they need to find a way to take care of their employee.
Also, I really think that the government should be more active preventing this kind of situation
I agree with you dparker, the government must done something with regard to this issue. Laborers in some countries were paid at a cheaper labor rate and if they’d experience slow pay or no pay at all, there is no just to that, right? Well I guess, we cannot totally blame the company but I hope, if ever they’d undergo this circumstances, the company must make sure that the situation is discussed to their employees.
It would be so hard to find a decent work that pays you well, i mean there’s no free nowadays,this economic crisis gets deeper and the service offered are not being processed fairly. Employers need to take care of the employees because they serve as the manpower, how will a company stays when no workers don’t like to give service because they didn’t get their share?
Absolutely! I agree with you Destiny, workers will not provide services for free. They deserve to be paid justly and properly, right? IOU is not a good idea because just like any other, laborers have needs, debts and bills to be paid. The government must have a law with regard to this issue and I hope, it is properly implemented.
Slow pay, IOU or no pay at all are not a good idea or option. There would be no justice for the workers, especially those who have cheaper labor rate. Can you imagine, they have been working for less then they will be compensated like that? Anyway, whatever their reasons are, it must be explained to their employees. The company must do their obligation properly.
People work to be paid. They work because they have obligations. What do you think will happen if they are not able to pay these obligation? They are will suffer, right? IOU, slow pay and no pay at all is not a good solution or option. Besides, when workers are not paid properly, their performance would be affected and in effect, the company will suffer.
If you are a company an you don’t pay they put you in bankruptcy. If you are California, I guess the people just keep taking your IOU’s and hope that at some time in the future they will get paid. If the IOU’s will take the State 5 years to pay, then I guess the value of them needs to be significantly discounted. I don’t think that I would be doing any business with the State of California if this turns out to be their payment method. Or you would have to charge them double or triple normal rates to make up for the discount that you have to take to sell the paper.
Slow pay situation is a natural response of cost reduction by companies. They are able to do so since they have an upper hand in the deal. Mostly in the end when situation improves, the longer credit period stays back. Also it really depend on demand – supply situation.
bank hoarding of dollars? is it not a violation? If America is in deep economic crisis then it is expected that the other countries especially the third world ones are also in deep trouble with the economy..isn’t it so?