good pay for unskilled labor, why the hate?

I love how people are in love with percentages, at least when it suits their needs.

Oakminster’s “everybody gets x%” is a prime example. To me this is the unfairest system of all. It implies that all so-called more important positions (must be since they make more) are now even more important because the difference in salary didn’t slide up equally. In fact their importance grows relative to the simpler jobs every year under this system.

We’re all equal except for some.

I guess Oak would have a coronary if the boss said “Everyone gets a $4K raise”.
And while we’re at it…

Why do we tolerate the concept of Board Members owning stock. This is the financial equivalent of letting foxes having keys to the henhouse. There is such a conflict of interest here that it boggles the mind. Do people honestly believe that
the people who stand to gain the most from dividends being declared should get to declare the dividends too?

This nation is truly screwed. We allow it because we have moronic notions that someday we’ll be in that position. There’s nearly 300 million of us out there and
probably a miniscule percentage of that in “board seats”. Good luck with that.

Buy a lottery ticket, you’ll have better odds.

Judging from the statements I’ve read, many board members don’t own a lot of stock. I’ve seen articles saying that they should own more, to have some skin in the game. Your average board member is rich enough to not care that much about a slight dividend increase. The real problem is the C-level execs with a lot of options, who can cash out big time if the stock price rises to high levels even for a short time.

You are asking multiple questions here.

Hungry - absolutely not. That is why food stamps, EITC and other government safety nets are important.

Special Stuff - not sure what you mean. I just took a few days off from work take my younger son on a trip. We had a 4 day vacation with him for his birthday, and it was damned special. Do we need government support so that everyone gets that?

Earlier we tried to define a living wage as being sufficient to support one person. Are you instead stating that the living wage needs to support a single mom, her child, plus “special stuff?” That is going to be a significant increase in labor costs, and will result in fewer jobs and higher product costs. I don’t think that the net result will actually help those at the bottom of the ladder.

France has significant protections for employees. This results in firms being much more careful about making a hiring decision. In the US, with a much more relaxed hiring setup, I can hire someone fast because I know if they don’t work out I can dump them fast.

Unemployement rates across nations: WARNING PDF: http://www.bls.gov/fls/flsjec.pdf

4.9: United States
5.2: Canada
4.1: Australia
3.9: Japan
8.0: France
7.8: Germany
6.7: Italy
2.9: Netherlands
5.8: Sweden
5.3: United Kingdom

The level of impact of increases in minimum wage on unemployment is an ongoing debate among economists. There are studies that show that an increase in the wage results in fewer hours available for the workers as companies cut back to keep their labor costs constant. NBER has gone to a pay model and I don’t have my login with me, but here is a quote from a paper:

http://www.lyd.com/english/noticias/626minimum.html

You can look up the amount of stock held by members of the Board and by the firm’s top executives in the Def14a proxy statement.

nevermind.

Lots of companies need someone to clean the floor and empty the trash cans. Lots of janitors need to be able to pay for food and housing. It seems to me that it would make more sense for companies to pay janitors enough for food and housing, than our current system where the janitor makes up the difference with welfare or debt.

I’m not sure if Acid Lamp’s mandated wage is the best way to accomplish this, as while it does help workers who produce well over a living wage’s worth in value, but are paid less than a living wage (like a janitor), it hurts those who produce under a living wage’s worth in value (like a Wal mart greeter).

The point of the living wage i suggest is to ensure that people who are working a full time job can provide for their basic necessities without government assistance. Safety nets are great, but there is no reason that someone who works full time should have to use food stamps. THEY WORK. The idea is that by ensuring that living wage, we have done all we can as a society to ensure that people stuck in those positions, whether by their own limitations or folly; or because there simply is not anything else available, can maintain themselves without taxpayer dollars. It will hopefully slow turnover as people are more likely to hang around at a job that at least provides for their basics. It will also result in fewer jobs. As someone who is technically unemployed at the moment, that takes a lot for me to say. but the problem is that we have a glut of labor both skilled and unskilled in a stagnant structure. No one moves up, no pensions, no retirement plans. Management fails to train so that they can be indispensable for as long as possible. The model is broken, but we can at least ensure that most people don’t need welfare while working full time.

But I’m trying to compete with McDonalds for fast food business. I want to serve basically the same stuff they do. Let’s say I’m Burger King, but I feel bad that my employees make such shit wages, so I want to pay them a modest $35,000/yr with health benefits.

Won’t my business not be as efficient as McDonalds across the street? I mean, sure, I would probably attract a higher quality employee, but what does that matter when the job is idiot proof?

In-N-Out Burger pays very well, gets a better quality product, and gets more business from what I have seen. They are private, so I can not compare their profit margin to McDonalds. What I do see when I go there is a higher caliber of employee than when I go to another fast food restaurant in the same geographic area.

http://www.in-n-out.com/employment_restaurant.asp
CostCo pays better than Sams Club, and has higher profit per square foot of floor space. Of course, they also target higher income clients - so that might help.

Do you think they get a better quality product because of their employees?

Okay, let’s try another example. My store sells Dell Computers. The store across the street sells Dell Computers. The inventory, selection, color of the paint, etc. EVERYTHING is the same.

The store across the street pays its workers $20,000/yr. I pay my workers $40,000/yr. Who makes more money?

Depends on what you offer to your customers. If you are providing an additional $20k of service that your customers want - then you will make more money. If instead you are just a Dell reseller with no added value - your profit margin won’t be as good as the guy across the street.

The service at In N Out is fantastic, and far superior to what I get at the local McDonald’s franchise. I attribute that partially to the fact that they pay better, and therefore get a better class of employees. I don’t know, again, how that translates into profits.

I have support people at my firm. I can hire at the low end, and get guys who fail to show up to work at times. I pay a little better, get better resumes, and I get better support. However, there comes a point of diminishing returns.

Another example: I had a client who ran call centers. He could hire cheap and provide regular raises for people to answer the phone for certain national organizations. With training, it took 30-60 days for a new hire to be profitable. After 3 years, however, giving them a raise did not pay for itself anymore. Lucky for him most people would quit the business first so that he would not have to be in the position to stop providing raises.

the question from my end isnt who makes more money, its why should the owners reap essentially all the profits when the employees are a part of those profits.

if you add to your dell store scenario that each store also does identical sales then its easy, of course the store paying half the amount in labor makes more money for the owners…but thats not likely to happen.

as pointed out with Costco v Sams Club, there are both near my house, Sams club is literally right down the block, its clean, has a decent selection, the people there are nice every time I go in, there isnt anything wrong with the store. but the one time I had a question and got an employee with a brain and the desire to go out of their way to help me I was very surprised because its not normal there.

Costco on the other hand…well the Southcenter store is kinda dirty, not gross or anything but its one of the first locations and its in what used to be a working warehouse instead of being purpose built for use as a store. a bit better selection in most areas, truly great meat department, and fantastic service all the way around. if a Costco employee gave me the standard Sams Club treatment I would think they were having an off day.

and if you talk to people who work at those store outside their jobs you will see a huge difference as well. Costco employees love their jobs.

so we have 2 nearly identical businesses (Sams is modeled directly on the Costco set up) with 2 very different pay scales for identical work, one does better business and attracts long term quality workers who then stay on, Sams on the other hand has a turn over rate similar to Wal-mart. so they are losing a significant amount of money just to train new hires.

we have a local chain up here called “Dicks” the menu is small, 4 burgers, one size frie, one size shake (3 flavors) and ice cream cones, the burgers come the way the menu reads, NO SPECIAL ORDERS. they pay above min wage, they offer health benefits and collage/daycare assistance and promote from within. the food is real. as in they have actual potatoes in the store that get pushed by hand through a slicer then fried up so you can put them in your face, the shakes are…ice cream and milk, what the hell? its kind of a strange experience eating there but the food is simply fantastic, the service is great (if you want to call it that, they take your order and give you food) all in all its a good experience. they have been in business since the 50’s with 5 places in the Seattle area all of them busy as hell almost every time I swing by one. They arent going out of business, they have happier employees, yes the owners make less money due to higher wages…but you cannot estimate how much more money they make with the crews they have working for them.

I think we may be missing an important point here. In order not to be inflationary, rises in salary should be based on increases in productivity.

Now, increases in productivity can result from a several different things. One is capital improvements, paid for by the company (employer) in question. But that may or may not require harder work or a superior skill set on the part of the workers. If either is required, then those employees should get a higher salary, because they have contributed to the increase in productivity.

Another, and I suspect more common, scenario is that a company lays off a significant percentage of its employees while maintaining its workload or increases its output without hiring more employees. In this situation, employees are forced to increase their productivity to make up for the increased workload they now carry. Such employees also ought to get a share of the increased profits, as they are now doing more work.

When the workers are actually increasing in productivity, they absolutely should get commensurate improvements in pay.

As for why we as a society are so against support for workers (especially in the form of unions), I think there are a several factors involved. One, of course, is the ever popular “I’ve got mine; fuck you,” the unspoken mantra of most conservatives, as far as I can tell. Another, for those who can actually put two and two together, the fact is that higher wages typically will be passed on in the form of higher costs: hence, the inordinate success of imports from countries whose salaries tend to be very low. Next, I think most people have an inflated idea of where they will end up financially; they identify with the executives, even though they themselves are workers. And workers doing poorly tend to resent anyone doing similar work and getting better pay and benefits - the old dog in the manger viewpoint. Last, but not least, I think people still cling to the idea that the harder and better they work, the better their remuneration will be. I really don’t think that’s particularly true; companies usually get away with paying as little as they can to hold on to the people, and fairness is not typically a criterion they consider.

I think all of these beliefs are flawed to some extent, but they lead to fact that many blue collar workers have no interest in, for example, supporting unions or even improving the system in order to better the condition of other blue collar workers. People’s interest is largely in increasing their own pay and benefits, and they don’t see to recognize that even if they themselves are not union members, they typically benefit from the success of unions in related fields.

Of course, the companies themselves are geared toward constant growth, in both gross income and profits. Each year, the companies I’ve worked for have given “numbers” each department is supposed to meet. If the department shows a profit, even an increased profit from the previous year, but doesn’t meet its “numbers,” the companies use this as an excuse to cut costs, typically in the form of layoffs (and thus increased workload on the part of the employees who remain). Thus a company can be making a healthy profit, and showing signficant increase in productivity from their workforce, but use these “numbers” as an excuse to cut costs further, even though the shortfall may have nothing whatsoever to do with the performance of the workers. This has always struck me as unfair.

I don’t know what the answer to all of this is, but I think these ideas should be thrown into the mix. If we don’t come up with a solution, the wide divide between the wealthy and the poor/middle income will only continue to grow, especially in economic times such as these, where jobs are hard to come by.