Paying Your Employees So Little That Most Of Them Are Poor?

Discussion in 'Economics' started by nutmeg, Feb 16, 2012.

  1. Dear Walmart, McDonald’s, Starbucks: How Do You Feel About Paying Your Employees So Little That Most Of Them Are Poor?

    How do you feel about paying your employees so little that most of them are poor?

    These employees are dedicating their lives to your companies. They're working full-time in jobs that are often physically and mentally demanding (again, if you don't think so, try being a barista). And you pay many of the employees so little that they're poor.


    Walmart, McDonald's, and Starbucks employ about 3 million people (not all Americans). They also collectively generate about $35 billion of operating profit per year. If the companies took, say, half of that operating profit and paid their employees an extra $5,000 apiece, it would make a big difference to the employees and the economy. The companies would still make boatloads of money, and the employees' compensation would finally be above the poverty line.

    cont on link...


    The question I have,

    Maybe the cost of living is too high.

    Is the price of a parking ticket, $100 too high? How about a $7 a pack cigarette tax. How about all those taxes on cell phones? WTf is a fishing liscense these days - $30 dollars? You got 2 kids and kiss $100 good bye to take a kid fishing.

    People might be able to live on $12 an hour if various "hidden" taxes, costs (liability ins, etc) weren't draining every last cent from the minimun wage chump.
  2. You're missing the issue...

    (1) There are WAAAAYYYY too many people on the planet so that there isn't a "well-paying" job for all of them. In fact, there are so many people in the workplace, that there may not be even "minimum-wage jobs enough" for all.

    (2) A "gazillion unskilled people looking for work".... how can there be higher wages when the supply of labor far exceeds the demand?

    This all an "unintended consequence" of outsourcing... bringing "300-500 million subsistence-peasants" into the world-wide manufacturing/service workforce.. to make cheap products for the West.

    Low wages are "the way of the world"... lower standard of living.
  3. If I won powerball for like $200 million I would start some business with the goal of employing as many people as possible and paying them as high a wage as possible where the GAAP accounting profit/loss = 0.
  4. GTS


    Easy solutions:
    (1) Don't get a parking ticket (really, is that difficult?)
    (2) Stop smoking, its expensive and not good for you
    (3) Cell phone, ok quasi-necessity these days, you can find inexpensive plans or just go with pay-as-you-go phones, no commitment, taxes are rolled into the cost
    (4) Fishing? Uh, that's a little out there and definitely not a necessity

    Why don't you discuss real costs of living like food, rent and gas before going off on strange tangents like fishing licenses?

    Public companies have a fiduciary responsibility to their shareholders to maximize their return - they do not exist for the greater public good (paying workers more than they need to just to be nice).

    I won't argue that many lower paying jobs are much tougher than higher paying jobs ... good argument to get some education or learn a skill then you can be one of the people earning money easily. For those that can't or won't...oh well, such is life. The world needs ditch diggers too.
  5. Good post nutmeg.

    When I was a kid, I lived in a mill town where most of the employees and I in summer made the minimum wage of $00.90/hour. When the CIO wanted to unionize them, all three factories and mills voted them out. Some cafes wouldn't feed them and the doctors wouldn't treat them.

    The funny thing is that there are plenty of their type around today. The last time I went to the grocery store I was accosted at the entrance of the store by the senior sweeper-upper and toilet cleaner (no kidding) who was a conservative republican.
  6. clacy


    I am involved in a family business where we own and operate five sit down, restaurants. I will be the first to admit that many of our employees are not paid well. Our tipped employees (servers) end up making pretty good wages if they are good at their job. The cooks, dish washers, bus boys, etc are not highly paid.

    It should be noted that many of these employees are not very employable outside of these service sector. They often have low skills, criminal records, or high school/college students. So, I think that low paying jobs are better than nothing for this type of employee.

    The market is really where wages are determined. Frankly if I were to increase the wages of my hourly employees significantly, we would go out of business in a matter of months.

    Some might say raise your prices to a point where you can pay your employees more. I would say that you clearly have never run a business before or taken a basic economic class if you think it's that easy. Every time I raise my prices by X%, I lose Y% of customers and the impact of the price change increases/decreases my overall sales by Z%. There is a cost benefit (which can usually only be done in hindsight, where you try to keep the price increases positive

    The restaurant business is very saturated and competitive, so it is not a high per-employee profit margin business. Relative to how many people we employee, or how many customers we serve, we actually make very little. It's the exact opposite of say an engineering firm or dental practice.

    When you invest your life savings and personally guarantee large loans/leases, you really would like to see a profit if you are successful. So there is no way to satisfy all of your employees and still earn a fair profit relative to the risk that you take when you open a restaurant.

    I would tell the employees/writers who complain about low wages to put their money where their mouth is and start a business where they have to set wages and run a viable business.

    This is the US, so they are free to do that at any time.
  7. To promote entrepreneurs, USA must regulate the market capitalization/monopoly/hegemony of all listed companies to twice their quarterly revenue.
    Fed has been regulating the cash reserve ratio of banks since 1913.
  8. clacy


    This is a completely different scenario than a 55 y/o who invests $400k (their entire life savings) into a business and signs onto another $1mm loan. In my scenario, where your only options are:

    1- Make a profit to provide for your family


    2- Lose your entire net worth and declare bankruptcy if your business fails

    My scenario is how businesses are actually started in the real world, and yours is a day dream.
  9. Eight


    close the border, the southern one.. Limit the supply of labor and wages will go up.
  10. slug


    #10     Feb 16, 2012