good pay for unskilled labor, why the hate?

Great Debates
1

with all the threads and talk about the auto industry I am seeing a Lot of talk about overpaid workers in the factories, I am not arguing about that or the contracts they have.

my question is if you have a company doing well why Shouldnt you pay your workers more?

a scenario,
company A has 100 employees making $10 hour, after a year they pull in 1 mil in total sales at 10% profit, so the company has made $100,000 this is the owners paycheck for all intents and purposes, and at this point I really dont see a problem with him keeping all or most of it after reinvesting.

after the first year the owner dumps some money into a new line which takes off, the same company this year does 20 million in sales with 2 million dollars in profits.
now yearly payroll is 2,080,000 so even divided between the employees alone thats less than a dollar an hour raise…but definitely worth a hell of an xmas party.

year 3, major investment, both in the last years hot line and new projects, year 3 the company does 100,000,000 million in sales…are you going to tell me at this point the workers dont deserve a big fat bonus? if you gave each employee $5,000 dollars the owner still goes home with 5 million in his pocket. (this is about a $2 hour raise per employee)

so what if contracts were tied to profits, if the company is kicking ass the workers pull in Phat Loots, if times are tight not so much.

another side of this is the execs, if the above we are dealing with 1 owner, if you have a mega corp the execs treat the companies money like it belongs to someone else, high risk on stupid stuff, big checks for them selves in the form of stock options and golden parachutes and crap like that all labeled to hide the fact that they are essentially robbing the company of giant sums of money. if execs got paid a big PAYCHECK and nothing else and said check was again tied to company profits my guess is you would have a very well run company.
thoughts?

2

Our society has really mixed up ideas about morals, wealth and meritocracy. Basically we believe that people with good morals (work hard, defer gratification, etc.) have a natural tendency and right to make more money. Basically, good people go to college and get office jobs. We believe that anyone can work their way up to a top position, and if you haven’t then it is because you are lazy etc. and you deserve your crappy lot in life.

Basically, the boss is the boss because he’s a better person and deserves more.

So it really mixes us up when we see someone who didn’t go to college making the kind of money that we mentally reserve for people of a different class. It makes us uncomfortable because it points out that our salaries may not actually be reflections of our superior moral status. It make us angry that people have subverted what we consider to the the natural order of things. And it makes us insecure because we have invested so much in this system.

All of this, of course, ignores that many factory skills are nowhere near unskilled, and many of our comfy office jobs could be performed by monkeys.

3

In the case of the auto makers you have the opposite situation of your example. The company’s market share was shrinking while the salaries kept the same or increasing.

4

If you give people a bonus based on performance, then the year things go bad there’s no bonus.

If you raise everybody’s salaries instead of giving bonuses, you still have to pay the high salaries on the year things have gone to hell: not practical.

5

Big picture: because if you pay them what you can afford to pay them instead of what they “deserve,” then eventually a company will come along that does (for the sake of argument) the same exact thing, only cheaper. At that point your company suffers (or folds) and salaries have to come down (or be eliminated). So, for example, Toyota can manufacture the same kinds of cars in the same country as GM, but only one of them is turning a profit, as the other is paying too much in labor costs (among other reasons, admittedly).

6

By the way, does one know what %age of a major American automaker yearly expenses goes to salaries and other benefits? It’s often touted that those benefits are bleeding the companies white, but when I think about it, I’ve never seen someone here giving a specific figure.

7

High wages for manufacturing workers are perceived by the investor class as reducing the return on their investment. Every dollar above the bare minimum required to induce Joe Sixpack to come in to work is a dollar out of the portfolio of an investor.

8

even sven, your post (#2) is very perceptive, IMO.

9

Nevermind.

10

First, just because the labor doesn’t require a degree doesn’t mean it is entirely unskilled. Second, lately even in companies which are gaining market share, and for which profitability has been rising, have been not raising real wages of even skilled labor, in some cases stating that since industry wages overall have not risen, there is no need to raise wages.

11

I’ve seen on the news CostCo has that exact problem. They pay their workers a decent wage and turn a decent profit. Meanwhile their investors throw a royal hissy fit like greedy stuck pigs because they don’t pay their employees the bare minimum.
Btw only the stupid, obtuse, and horribly ignorant think lower class jobs are “easy”. Some of the lowest paying jobs can be the hardest most physically demanding. Not that I disagree with even sven on social perceptions though. People tend to believe what makes them feel better.

12

If they want to pay their workers nice wages without the investors throwing a hissy fit, then they shouldn’t take said investors’ money. It’s not like companies have to be public, and even if they are they can have policies like paying good wages etc. Investors that don’t like it won’t give them money, simple.

13

Doesn’t it make sense that if you pay a little more in wages, you can pick and choose the best employees, who show up on time and don’t quit after you spend a month training them? It costs money to train people and it costs money when people don’t show up and steal from you and do shitty work. Surely there is some kind of return on investment when you pay a little more, isn’t there?

14

Yeah, those poor investors with a gun to their head, forcing them to buy shares in a profitable company. It’s unamerican.

15

Exactly, plus employee motivation is stronger. I know if I was making CostCo wages I’d work like hell to be a good ROI.

+1
I found an online version of the story:

16

Certainly true.

Unfortunately in a Union shop there is no meritocracy and I think that is ultimately the difference. We have had posts from other Dopers who work in the auto industry and the hoops they have to jump through to get a “good” worker to solve their particular issue is amazing. In the union all are equal so of two people with equal tenure in their job get paid the same even though one is very good and the other does the minimum to keep his/her job. Whichever is “on” that day is who comes to do the work…even if they suck or take twice as long.

Therein lies the real problem. Paying good employees more is great and useful (up to a point) to encourage better work and keeping better workers. Does not work like that in a union however.

17

I’ve been saying for a long time now that we will have greatly matured as a society/economy when the people doing the really shitty jobs get paid very well.

Right now, shitty pay for shitty jobs is basically because society can stick to those people because society as a whole CAN.

Don’t get me wrong. I am pro capitalism, pro education and training, pro investing, pro growth…blah blah blah

Imagine a distant future, where most people want learn complex stuff and be doctors, scientists, protectors of the evironment, or even wormhole traveling archeologists. And they do it because not just because the pay is okay, but they actually think its a good thing for society as a whole.

Then there is the dangerous, nasty, and boring job of cleaning out the fusion powered reticulated framus. The ONLY reason anybody does it is because the pay is so darn good. Or maybe because they are a team player and figure SOMEBODY in society has GOT to do it.

Though I guess you could look at that as just as elitist in a way as the way things currently work, but it seems like a much more just job market to me.

18

No. It is unethical and immoral to pay workers more than market price for wages. Others may frame the answer differently saying it doesn’t make financial sense to pay more than market wages, but I will go even further and say it doesn’t even make moral sense do so.

I’m well aware I’m in the minority (especially in this thread) but I will go ahead and state that the workers do not deserve a big fat bonus in your scenario.

There was a recent story about a Christmas bonuses in the news Five-figure bonuses stun Chicago plant workers. I know that many people consider the generosity of the owners to be commendable. But I disagree, it is not commendable and actually immoral. They are rewarding their workers for being lucky enough to be “associated” with the company instead of skill or merit. The amazing irony is that the workers receiving the bonuses can’t even detect their own hypocrisy about fairness and equality.

I’m not looking to engage in debate here because 99% of the folks in this thread insist business owners are unfair. I’m just throwing my opinion out there to show there is a different thought process to this.

I’m not out of touch with blue-collar work. In the past, I have literally “dug ditches” (manually by hand for sprinkler systems) and carried 50 pound stones for landscaping. It was backbreaking work. I currently do white-collar work. I have hands-on experience with both perspectives. The vast majority of people who complain about blue-collar pay only have one perspective.

19

Intertesting. Is it also unethical and immoral for companies to pay dividends to stockholders? Dividends are discetionary bonuses above and beyond the market value of the stock; are companies unethical and immoral when they pay dividends?

20

You give points for strawman arguments? No one said there was a gun to investors’ heads. It was simply stated that public traded companies need to serve the shareholders’ interest or go private. If you want to operate a charity, fine. If not, then don’t take investors’ money.