Chapter 364 - Free Cities
Chapter 364: Free Cities
Re-establishing real estate prices in a first-tier city was not enough!
In order to save money and improve corporate profits, Xing Hai Technologies had done something even more daring—a major reform of wages and benefits.
Employees who worked in the Technology City No. 1 received some wages but their welfare package was changed dramatically. Any employee who moved to the Technology City with their entire family would have their wages cut by at least 90%. They would only receive up to 10% of their previous salary. For those employees who were in the “half-migration” state, wages were reduced by at least 50%, and disposable income was halved. Only employees whose work was not location dependent did not experience any changes to their income. There were no adjustments made.
“The income is cut by 90%, and 50%. If it were me, I’d resign immediately and change jobs.”
“They’re courting disaster! Is Xing Hai Technologies crazy? They’ve exposed their ugly capitalist’s face much too fast. Isn’t it too ugly?”
“Those employees responded to the management’s request and went to work in the desert thousands of kilometers away. It’s just about tolerable if they chose not to increase the salaries a little. But to actually reduce the salaries? Is it really necessary?”
“They are destroying the bridge after crossing the river and killing the donkey when the grinding is done! I feel sad for those employees.”
This was the initial reaction of ordinary people regarding Xing Hai Technology’s sharp cut in wages.
But a few days later, once Xing Hai Technologies had introduced their welfare policy, everyone suddenly realized the truth. They were shocked and found it incredulous. Xing Hai Technologies’ welfare system exceeded everyone’s imagination. The package was especially generous for the Xing Hai employees who had moved with their entire families to “Technology City No. 1”. The benefits that those employees and family members enjoyed stunned everyone.
Firstly, they were free. All goods in Technology City No. 1 were free. This included grain, oil, rice, noodles, fruits and vegetables, all kinds of poultry and eggs, river fish, seafood and all kinds of dairy products, dried fruit, and snacks. It was all free.
Houses were freely distributed and renovations and furnishings were free of charge.
At least one car was allocated to each family. If that was not enough, they could apply for one more. The cars were all free.
In addition, clothing and all kinds of daily necessities could be procured anytime for free.
There were also educational services, medical services, culture, and entertainment, which were of course, free.
In short, as long as you moved to Technology City No. 1, the food, clothing, housing, and transportation inside this city were completely free. The company took care of everything and footed the expenses for everything. There were hardly any areas on which one had to spend. Even if the wages were cut by 90%, it would not have any effect on the quality of life.
Xing Hai Technologies had established an “everything is free” city in the northwestern desert. While the vast number of netizens were shocked, they also expressed their views.
“Is this the fledgling form of future socialism? People would have a very rich material life, but all food, shelter, and goods are free to use and consume. Is Xing Hai Technologies the first to enter this stage?”
“I still remember that the junior high school books said that we must enter the advanced stage of socialism in 20X0 and build a beautiful common society. Nowadays, these sort of sentences can hardly be found in books, and it is also unlikely to become a reality. I didn’t expect Xing Hai Technologies to take this step and demonstrate how it would work to us all.”
“We’ve misunderstood Xing Hai Technologies. Xing Hai Technologies is not exploiting employees but providing better treatment!”
“I’m so envious I’m drooling! A city where everything is free. It would be awesome if I could enter that city.”
However, there were also many pessimistic voices.
“They’re just messing around. They’re going back to the era of collective ownership where everything was free; people would take all that they could and slack off on their work. Hundreds of thousands of people will consume as much as they can. At the same time, they would not put any effort into their work. No matter how much money Xing Hai Technologies has, they will still go bankrupt at the speed of light.”
“Actually, many people have conducted this form of Utopian social experiment in history, but all have ended in failure. By doing this, Xing Hai Technologies is killing people’s enthusiasm, breeding laziness and greed, I dare to guarantee that this will 100% end in failure.”
“Xing Hai Technologies is too naive. Do they actually dare to test human nature? The starting point may be very good, but they could only maintain this for at most one year.”
But some had seen the devil in the details and put forward a different view.
“Most people think that Xing Hai Technologies will make a loss. They are saying that the company is very stupid and naïve. I don’t agree. Xing Hai Technologies must have calculated things in a very savvy manner.”
“I will roughly calculate their books for you. At present, the salaries of Xing Hai Technologies employees are the highest in the country. Including bonuses and various types of benefits, the average median monthly income for an employee is about $120,000; including other expenses such as tax payment, money spent on staff should be around $150,000. If you multiply this by 100,000 employees and then multiply it by 12 for the months in a year, the annual labor cost is $180 billion.”
“The total number of Xing Hai Technologies employees has reached 300,000, so the annual expenditure on personnel is around $500 billion. This has swallowed up a large portion of the profits.”
“What’s the purchasing power of $500 billion?”
“This is about equal to the construction cost of 1 million houses with elaborate furnishings. Alternatively, it is also equal to 2 million medium-sized electric vehicles, or to the per capita living expenses of 5 million middle-class citizens. This expense should have been spread across 300,000 people.”
“Now, Xing Hai Technologies has used the $500 billion to build 300,000 houses in the northwest desert, bought 300,000 cars, and provide high-quality living services for 300,000 people in accordance with ten times the consumption standards of the middle class. The annual expense is only $525 billion.”
“There is almost no difference between the two.”
“But in reality, the company only had to build one house and allocate one car for each employee. In the second year, it will spend $225 billion less. The net savings is $200 billion.”
“In addition, it also spends less than $300 billion in living expenses for the employees. Xing Hai Technologies, which has contracted a large area of land, can grow fruits and vegetables, enough to meet the needs of millions of people. They can raise tens of millions of chickens, ducks, pigs, and sheep. Power will be generated by their own power stations and the water will be pumped from Lake Baikal. This is all extremely cheap.”
“At least hundreds of billions can be saved in all aspects of living costs. Taken alongside the previous $200 billion that was saved, the total saving is $300 billion!”
“$300 billion has been saved from the annual expenses and it has all become the net profit of the company!”
“If it was me, I would also be willing to build a completely free city for my staff.”
“As for the increase of $300 billion in profits, it is also the rent lost by the landlords in the first-tier cities. It is the high cost of living in first-tier cities. More importantly, after the employees’ wages are cut by 90% and 50%; the income tax that they have to pay will be drastically reduced too. They don’t have to pay a penny towards insurance or pension. Everything in ‘Technology City No. 1’ is free, so the value is zero. Hence, no business tax, consumption tax, or property tax has to be paid at all.”
“So, after this calculation, what do you think is the purpose of Xing Hai Technologies? What they are saving is money; this should be clear to everyone at a glance.”
“Whether Xing Hai Technologies is making a profit or a loss, everyone should answer the question of what they would do truthfully. If it was me, I would also build several free cities.”
Wow…
As soon as this analytical article came out, everyone’s eyes widened. A phrase appeared in their minds—going against the natural order. Xing Hai Technologies was trying to go against the natural order of things!