CostCo has a business model that includes paying the help decently. Since it makes a profit, I don’t think you can exactly call it a charity. I have a CostCo card in part because I find the stores neat and well ordered, even for a warehouse, and much better than WalMart. I’m also happy to vote with my dollars for companies that don’t treat their employees like shit. Are you saying that CostCo is somehow not allowed to use this particular business model?
If investors all thought this was a money loser, they get to vote by selling the stock. They can make their voices heard if they don’t wish to. But anyone saying that a company that pays its workers more than the bare minimum shouldn’t take investors money is saying that they are scared of the free enterprise system showing that screwing workers might be non-optimal.
Thanks for clarifying. And I think your statement at the end about the UAW workers making more than the workers employed by foreign car companies in the U.S. is also part of the “hate” described by the OP. Many see Toyota, Honda, etc as delivering a superior product and that’s why they are doing better. So the theory that a company paying its workers less will perform worse in the long run than one paying workers more, as discussed by Euphonious Polemic and gravitycrash, goes out the window because it assumes an equal product.
Algher, last I checked, having kids is a choice. If someone wants to create a family, they should make sure to have the resources to support it (in a perfect world, I know).
UAW line workers hired in the last two years make a bit more than $14 per hour with much more limited benefits and a far different retirement system.
I don’t disagree with that statement. I am still interested in trying to define what minimum wage is, and what living wage is.
In the first bit that I quoted, the living wage was defined as covering the expenses for ONE person. I tend to agree with that, but asked what “living” is, and even later put in my own personal history in that regard.
I will happily state that an entry level minimum wage job does not need to pay enough to support a family. A corporation should be under no obligation to pay enough to support a family at that level.
True, perhaps, but is it really the fault of the assembly line workers if the car design sucks? The poor financial performance of U.S. auto companies is due, in large part, to design and marketing and finance decisions that are certainly not made at the blue-collar level.
Do you think companies who have investors who disagree with their product mix or other form of business strategy should go private also? How about decisions about the level of product quality? Is buying better supplies and deciding to produce a better product immoral also? Not to mention that selling stock is not quite the same level of protest as leaving the country.
It seems that to you paying better wages (and attracting better workers if the management is competent in hiring) is somehow different from other business decisions. Why would that be?
Which is why strong unions will always be necessary. Any corporation whose stockholders are so shortsighted as to replace the BOD over day to day issues like wages, deserves to be broken over the knee of a strike.
A quote from a Detroit Free Press article from a couple of weeks ago has different numbers yet.
So $42 versus $55, I’m not sure where the numbers are coming from in each different calculation, but the $70 is certainly wrong.
Maybe the $55 figure includes union workers who are not assembly line workers? I have no idea which job categories are covered by what statements.
To be clear, I’m saying, “it is immoral to pay people more than what the prevailing market values for their labor.”
I have no problem paying workers more. I want to pay workers more. Did that worker at my company that used to stuff envelopes improve his skills so that he’s now fixing machines or managing other workers? If so, he should get paid more because his labor is worth more. I was paying him $8/hr to stuff envelopes; I now need to pay him $20/hr because he fixes machines. This is the right thing to do. “It is moral to pay people more.” Morals or not, if I didn’t adjust his wages, he would leave.
There are 2 distinct concepts that people conflate which make these “fair living wage” questions impossible to discuss intelligently:
[ol][li]the actual worth/value of their laborthe actual worth of the human being irrespective of their labor[/ol][/li]Debaters think they are arguing concept #1 when they are really talking about concept #2 without realizing it. The problem is concept #2 is all about emotions and you can’t put a $$ figure on it. What’s an arm worth?! 100k? What’s a human life worth?! 2 million dollars? What’s a person’s well-being in modern society worth? I don’t know and neither do companies or business owners.
Only concept #1 has any chance of being discussed rationally without emotions. The way the world does so is by responding to signals of market wages.
Because this isn’t something workers do in their own world of morality! It’s inconsistent and it’s hypocrisy. I don’t know of a universal term for it but I call it the “self-denial of self-hypocrisy” or “invisible hypocrisy”. When a unskilled worker sells his house for a profit, does he share the capital gains with his babysitter? The babysitter had a hand in it. She made it possible for him to earn money and make improvements on the house so shouldn’t the babysitter also get a big fat bonus?! I’m pretty sure that 99.9% of homeowners do not share their profits with their babysitter. Most homeowners (unskilled workers) feel their obligation to the babysitter is done after the hourly wage is paid. Why?
Most workers don’t equate this type of transaction with their employer so they have no idea they are even being hypocritical in their judgment of business owners. That’s the amazing irony of it – the workers feel righteous in light of their inconsistent morality.
The problem is that a company paying $30 for the same mix of employees is managed incompetently, same as if they spent more for raw materials. Paying more should give you the cream of the crop of potential employees, and if you pick wisely they can more than make back their pay increment by better service, finding and solving problems faster, and improving the business with new ideas.
I was involved with factory quality for a while, and line workers who could spot problems before they propagated down the line to where they were expensive to fix were worth their weight in goal. Smart engineers asked these people what was going on. It works at all levels. Including CEOs, where the big bucks often seem unrelated to performance.
I forgot to add that workers can certainly share in the profits – by buying stock in the company just like any other investor. There is no discrimination there.
If you want a steady paycheck, go be an employee of that company.
If you want to share in profits, then buy some stock of that very same company.
And here’s the kicker, those 2 scenarios are not mutually exclusive.
But as Dangerosa mentioned earlier, most workers don’t seem to understand these choices. They want profits without buying stock. On the other hand, if their compensation happens to be based on bonus tied to profits, then they think it’s unfair that their income drops when profits fall. I guess they want everything. The concept of tradeoffs does seem to enter into the thinking at all.
That’s close to a tautology. The prevailing market rate for labor is based on what people earn. Do you think it immoral to pay anything above the average of all workers for a skill set? How about below the average? Since there is a natural distribution of wages around the average, based on millions of pay decisions, to enforce your morality would require wage controls. I’m guessing you don’t want that.
Fine. But even without this massive jump in skill, not all workers at a pay grade are equal. How about a dime an hour more for a small increase in skill or experience? Your position makes no sense unless you think there are defined bands of worker skills, and you can’t see the difference between workers in a band. It’s true that this is exactly how unions operate, and I think that hurts productivity, but the reason for this policy is lack of trust that management will make fair salary decisions. Attitudes like yours bolster the union’s distrust.
There is one more practical consideration. Low balling wages means that workers can’t afford to consume without getting into debt. Lack of consumption means lower sales and lower profits, and we wind up where we are now. In the short run keeping wages low helps the bottom line, but spread across the entire economy it leads to problems. If productivity improvements don’t get reflected in wages, then we’re screwed.
Kind of sociopathic to feel otherwise though. I mean slavery is wrong is just an opinion when you think about it too.
Seems the free market left to it’s own devices doesn’t mind if people starve.
It is not tautology in context of OP’s scenarios. He suggested that the company pays their workers more when they have a very profitable year. This would be paying works more than “market wages.” That is what I was responding to. I think this thread has gotten so long that you’ve overlooked the ideas that started this discussion.
I don’t think it’s immoral to pay a little bit above average market wage. However, I believe it’s immoral to pay a secretary 200k salary. I’ve already explained why in a previous post.
You’re reading too much into my example. What I was trying to say is that the motivation for increasing a worker’s wage should come from his labor output and not his circumstances. It’s impractical for businesses to think of wages in terms of human situations… “well, John has a kid and mortgage so we need to give him a living wage to cover that…and Sally has a mother in a nursing home so we need to pay living wage to cover that, etc, etc”.
It does not mean that basing wages purely on value of labor is perfect. It will have some flaws and inconsistencies. But it is more perfect than basing wages on “human worth” factors.
I never said I endorsed low-balling of wages.
Do you feel the same way about bonuses paid out to CEOs? They can buy stock also. And lots of companies have stock plans and bonus plans, since bonuses are directly impacted by profits, while there is a much less direct connection between profit and stock price.
I’m old enough to have been around when the bonus plans started, and I can assure you they were not put in place to only benefit the workers. They were sold as putting some of your salary at risk based on how the company did, and were originally set up in place of raises. There is another advantage for the company - raises are compounded, while bonuses are not. The advantage to workers is that by dropping bonuses when times are tight there is less need for layoffs. Your opposition to bonus plans is actually more anti-management than anti-worker.
From a management point of view, one factor to consider is how difficult it would be to replace a worker. With unskilled labor, I can hire another one tommorrow, without losing much in terms of productivity. With skilled labor, that ain’t necessarily the case. The way to move up the pay scale is to acquire skills that are not easily replaced.
where does this come from? how does morality even come into play here? are you saying Costco is immoral for paying its employees really good wages/benefits? compared to sams club Costco employees make a fortune and unlike sams club employees the people at Coscto can afford things like cars and homes and educations for their kids instead of living off welfare and needing government assistance to simply get by.
I know sams club says up front that they do not pay a living wage, alright every single employee of theirs who isnt living at home with their parents or doesnt have a full time job just up and quits? they would lose most of their workforce over night. during the elections one of the candidates up here was quoted as saying “minimum wage was never meant to be a living wage” as his argument for lowering the minimum wage…guess what? the fact that it wasnt “meant” to be a living wage has absolutely no bearing on the fact that it (for many people) “Is” a living wage.
I cant reply to all the posts in here I would like to after reading through but I do like what is being said.
part of the reason I even ask is tied to the idea that some people have where the workers are essentially the same as the machinery in the plant. you do whats needed to keep them working but act like they have no effect on how well the factory or company does. having worked for people like this and for people who understand that everyone in the whole company contributes to the success of the company I will take the later every single time. being treated like shit because I make half of what you do is BS. being treated with respect, even when we have our differences (hell in one case even when being fired) is just plain classy. and to me at least respect means everyone shares in the company.
some one posted about some people working at a place with profit sharing losing homes when profits dropped and they were living beyond their means and that had crossed my mind, part of the plan should include financial planners coming in and talking/working with employees on how to safeguard that money.
Industry segments are often profitable together. If an entire segment is doing well, and all companies increase pay, then the market wage for this segment goes up accordingly. Is that okay for you? If a company in the segment which is not profitable raises wages, they may be rewarding ineffective workers. On the other hand, if they don’t, the good workers will migrate to other companies. This argument seems to get used for high CEO pay for unprofitable companies - is it more moral in that situation?
More or less moral than giving a CEO $50 Million for lower shareholder value? That’s a real case. A secretary making $200 K either knows everything about the business and is absolutely essential, or has some additional skills. 
Well, I agree about human worth. That was how it was done in the old days, when men made more because they were assumed to have a family to support. If wages were tied directly to productivity, I’d be happy. But US productivity grew a lot, and the minimum wage didn’t budge. Were entry level workers really no more productive than 10 years ago? The political call for higher wages is directly opposed to the pressure to keep wages low from investors. And there has to be a moral component in there somewhere. Is it fine if market pressures reduced all salaries to a dollar an hour?
I have mixed feelings about bonuses paid to CEO but I don’t want to muddle up this thread with all the various issues of that. In any case, the bonuses paid to executive management is usually explictly spelled out in their contracts. The context of the OP seemed to be unexpected (discrectionary) bonus because of a very profitable year.
I don’t oppose bonus plans. I simply stated an opinion about a discretionary bonus that’s very large and out of whack with market wages as misguided charity — and that the workers would actually agree if they could look past their own inconsistent logic. Oh well, love makes us blind. Money makes us blind.
I’m neither anti-worker nor anti-management.