>...your revenue per employee must be huge and delivering IT makes it a good decision to give you guys top equipment. But you're not a small business, and that sort of policy isn't normal in small business except for IT shops. ....if upgrading hardware costs (say) 10% of wages and salaries, you have to decide whether a part time storeman is a better investment than new computer gear. ...

First off, Jim's original statement referred to a PC that "worked perfectly" so you have to define what that means.

Businesses that hold onto old hardware can be making foolish decisions depending on how the PC and software are used. For example I create some spreadsheets with a lot of pages. When our "knowledge workers" (well paid) view them on a small monitor they spend an awful lot of time scrolling to find the sheet they want. Over a year the value of their time far outweighs the cost of a new PC. Of course really small business only look at the price tag of the hardware and not the productivity improvements.

You're right though that additional lower-paid workers may be an alternative, but at $10/hr it only takes 10 hours to equal the cost of a new PC. And, it takes at least 10 hours to train a new employee.

Of course, we can theorize all day about cost-effectiveness, but small business owners still make decisions in whatever way seems logical to them.