Dan Price raises minimum wage at his company to $70,000 a year

[barbos]

The same workers doing the same jobs.

So, I don't think this is what he gets. I think he is going to get the same people doing much better work. Focused, excited, energized. Hyped. Ownership, teamwork, collaboration.

Right, like police when they cover for each other even when they really should not
Anyhow, I read the article which argued that excessive amount of this "do good for your employees" attitude is actually bad. It may not apply to this particular case where the guy simply pays more however, but on other cases people become too loyal for their own good.

 

[Rhea]

So, I don't think this is what he gets. I think he is going to get the same people doing much better work. Focused, excited, energized. Hyped. Ownership, teamwork, collaboration. Going above and beyond what is typically expected or produced.

I have known several people who have been given great support by a company when they went through a tragedy. Unlimited time off, help with flex hours, substantial assistance. Those people, now that their tragedy is (sadly) over, are now intensely loyal and will put back far more than they ever got in order to pay back, in their way, for the priceless benefit of not having to worry at all about work or their future while they endured a loved one dying.

I think the guy gets back something like this.

I expect most of those employees will see this as many levels; the CEO caring about them, the everyday worries being lifted from them, the message that they are all intricately entwined in their value to the company. And that this will translate into intense loyalty and desire to give back more than they are even receiving.

I really look forward to seeing the results. I think they will be dynamite.

So, you pay a records processing clerk twice as much and they process twice as many records? This is what it would take to get you back to even on a cost per record basis.

That suggests they are slacking quite a bit now.

No, that is a very shallow way of trying to understand the issue.

Employees, generally, will have different speeds of getting going in the am and shutting down in the pm. Different levels of doing a bit at home and during lunch. Different levels of taking sick time, vacation and holidays. Different levels of retention. And different levels of focus during the regular day.

When the atmosphere is enthusiastic and dynamic, you boost _ALL_ of those categories. You get more hours, less training/turnover time, less sick time, people foregoing vacations, coming in on holidays, doing extra bits at home and during lunch. And focusing such that they can produce significantly more while they are in.

Failing to do these things is not slacking. But being enthused to do them can indeed double your output.

Part of this can be seen simply in the different output of a "type-A" person versus others. They are on, they are pushing all the time. They are doing extra. I believe that this employer will see people who were good before, striving to do even more now. And with the whole team doing it, one can expect, IMHO, the sum to be even greater than the parts.

 

[ksen]

Anyhow, I read the article which argued that excessive amount of this "do good for your employees" attitude is actually bad.

Which article was that?

 

[barbos]

Anyhow, I read the article which argued that excessive amount of this "do good for your employees" attitude is actually bad.

Which article was that?

Some article in some paper. I am not going to search for it.

 

[dismal]

So, you pay a records processing clerk twice as much and they process twice as many records? This is what it would take to get you back to even on a cost per record basis.

That suggests they are slacking quite a bit now.

No, that is a very shallow way of trying to understand the issue.

Employees, generally, will have different speeds of getting going in the am and shutting down in the pm. Different levels of doing a bit at home and during lunch. Different levels of taking sick time, vacation and holidays. Different levels of retention. And different levels of focus during the regular day.

When the atmosphere is enthusiastic and dynamic, you boost _ALL_ of those categories. You get more hours, less training/turnover time, less sick time, people foregoing vacations, coming in on holidays, doing extra bits at home and during lunch. And focusing such that they can produce significantly more while they are in.

Failing to do these things is not slacking. But being enthused to do them can indeed double your output.

Part of this can be seen simply in the different output of a "type-A" person versus others. They are on, they are pushing all the time. They are doing extra. I believe that this employer will see people who were good before, striving to do even more now. And with the whole team doing it, one can expect, IMHO, the sum to be even greater than the parts.

The way I did it is called "math". If you are paying someone twice as much to process records if they do not process twice as many records your cost per record goes up.

There is no amount of feelgood handwaving that makes this tyranny of mathematics become untrue. If all his employees are currently producing <50% of what they could produce he must be extraordinarily demotivating manager and judge of effort.

Other than your faith, why would you expect people to instantly double their productivity if they are paid twice as much?

If you tripled their salary would they produce 3 times as much?

If you quadrupled their salary would they produce 4 times as much?

 

[ksen]

So, you pay a records processing clerk twice as much and they process twice as many records? This is what it would take to get you back to even on a cost per record basis.

You're assuming Price's desire is to get back to even on a cost per record basis. There's no evidence that's the case while there is evidence that he feels he has enough room to allow his costs per record to grow while still being profitable.

 

[dismal]

So, you pay a records processing clerk twice as much and they process twice as many records? This is what it would take to get you back to even on a cost per record basis.

You're assuming Price's desire is to get back to even on a cost per record basis. There's no evidence that's the case while there is evidence that he feels he has enough room to allow his costs per record to grow while still being profitable.

Actually I'm assuming he's being charitable with his money. It's your co-religionists who keep trying to justify this as good business that will pay off in more profits. This should have been clear from reading the thread, but always happy to help.

 

[ksen]

Actually I'm assuming he's being charitable with his money.

Oh, Price earned all that money by himself?

It's your co-religionists who keep trying to justify this as good business that will pay off in more profits.

It sounds like Price believes it will pay off in adequate profits and doesn't really give a shit about "more" profits.

 

[dismal]

Oh, Price earned all that money by himself?

Non sequitur. The relevant point is that he owns the company so the profits are his. He can put them in his pocket (which he has been doing to the tune of a million per year) or spend them on other things.

It's your co-religionists who keep trying to justify this as good business that will pay off in more profits.

It sounds like Price believes it will pay off in adequate profits and doesn't really give a shit about "more" profits.

Right, you and I seem to agree, but your co-religionists feel some need to argue this will increase his profits.

 

[Ford]

Actually I'm assuming he's being charitable with his money.

And that's all your doing. Basing everything you write on an assumption that you made because you can't imagine anyone paying their employees anything but the barest minimum.

 

[RavenSky]

I see, the guy apparently managed to compete with VISA/MasterCard. I did not know it was even possible, good for him. But this explains why he is doing so well, this whole business is based on overcharging businesses (actually card owners indirectly), so charging slightly less can get you a lot of clients. And again I don't understand how it's possible.

Gravity is not competing with the credit card companies like Visa/MasterCard, they are competing with companies like BankCard Services.

The credit card companies do not process the point of sale CC transactions, this is done by third parties, who charge businesses for the service, and often charge transaction fees as well. When credit cards were fairly new, the fees often ended up being paid by the customer, you would pay more when you used your credit card than if you used cash. It is much less likely for this to happen now that credit cards are ubiquitous. People might avoid shopping at your store if you charge them more to use their cards, and they don't typically carry cash. So, businesses have to eat the processing cost as a cost of doing business. Price apparently found a way to provide the CC processing service for less money, and built a profitable business around it.

You went into a lot more detail and explained it better than I did, thank you.

(I wonder if you will also be ignored )

 

[dismal]

I

Actually I'm assuming he's being charitable with his money.

And that's all your doing. Basing everything you write on an assumption that you made because you can't imagine anyone paying their employees anything but the barest minimum.

I thought we had covered the point that this thread is not about me earlier.

 

[Underseer]

OMG, he is a communist who wants to make profits illegal and take away our freedoms!

I bet he was one of the wealthy liberal funders of the Furgeson riots. We all know for a fact that the Furgeson riots were all staged by a conspiracy run by George Soros.

 

[Ford]

I

And that's all your doing. Basing everything you write on an assumption that you made because you can't imagine anyone paying their employees anything but the barest minimum.

I thought we had covered the point that this thread is not about me earlier.

We certainly talked about it, but you still think it is about how you're so much smarter than this guy. Not only that, but you can apparently read his mind - or at least his charitable intentions despite the fact that it has been pointed out repeatedly that he is not doing this for charity.

Maybe you should actually address what he's doing instead of your opinion of what he's doing, and then the thread won't be so much about you.

 

[WAB]

Some seem to think Price is suspect for pretending to be charitable when he's really doing this as a way to drum up more revenue; others seem to think he's really being charitable, but that he's being too charitable (wrong word, really) by virtue of paying the same salary to entry-level employees as certain higher ups, and that this is not a good thing—which it clearly isn't: Paying an unskilled employee the same as a skilled employee is going to curtail (or outright destroy) the skilled employee's incentive for sticking with that company, unless they have a wicked egalitarian bent. DBT and I think he's awesome for being bold enough to do this well-intended thing, and that exploitation of wage-earners is morally wrong and that someone at the forefront of modern business needs the nads to own up to it and be willing to work towards changing it.

After thinking on it, I think if it were my money, I would bump my lesser-skilled employees up to whatever income bracket I considered necessary to ensure their ability to sustain themselves without financial distress, while bearing in mind that there are many people who simply cannot manage money, no matter how much they have; but I would pay my more highly-skilled or professional employees considerably more, since that seems not only fair but just common sense.

What's most certainly true is that people with very large incomes—say in the many millions per year—have far more money than they need and might want to consider how they can put their money to productive, even beneficial use. Note I say "consider", since if a billionaire who's earned her money lawfully, and through her own effort and intelligence, refuses to part with a single nickel, that ought to remain her right in any civilized nation, since to force her to part with that nickel against her will would make that parting something other than charity. Charity should be wholly voluntary and genuine. That being said, no-one in a civilized nation should be prevented from (nor feel ashamed for) calling the billionaire who refuses to part with a nickel a money-grubbing Smaug, and to hold her in private or public contempt.

That being said, if Steve Weiss, from the old board, were here, he'd tear me a new ass for saying that. And Ayn Rand, whom I revered when I was in my thirties, and still admire, though to a lesser degree, would call me all sorts of names, using many exclamation points (far more than the Chicago Manual of Style recommends).

 

[Bomb#20]

Price is going to pay "even the lowest-paid clerk" $70,000; the article article implies this person is currently getting $35,000. So when you say Price is actually doing something like paying workers according to the revenue they generate, you appear to be claiming that a $35,000-a-year clerk is generating $70,000 in revenue. (Is that what you mean to be claiming? If not, please clarify what you mean.)

No prob. Neither LTOVs nor neo-classical make that claim per worker, which appears to be some persistent hobby horse of yours.

What are you talking about? When the hell have I ever made a claim about how much revenue a worker is generating?

Rather, capitalism groupies claim that wage levels in profitable firms are determined by profitability (revenue minus costs) rather than labour market conditions (how easily a given type of worker is to replace). Price proposes to pay what revenues afford while remaining profitable rather than what the labour market lets him get away with.

Ah. So this shows two things. First, that you were talking about collectively paying workers according to the revenue they collectively generate. So you mean you aren't claiming the currently-under-70K workers are finally going to be paid according to the revenue they generate? For all you know Price may have already been paying that class of workers according to the revenue they generate?

And second, it shows you are equating the "revenues" in "what revenues afford" with "the revenue they generate". In your claim, "they" referred to "workers". So you are de facto claiming the revenue is generated by the workers; i.e., that it is not also generated by the owner's capital. Hence my questioning you about the LTOV. So, do you think the "capitalism groupies" you're talking about share your opinion that the revenue is generated by the workers and not by the owner's capital?

(Incidentally, I have no idea what "capitalism groupies" you heard claiming wage levels in profitable firms are determined by profitability. In my experience people who approve of capitalism generally seem to think wage levels are determined primarily by labor market conditions. But never mind that for now -- first let's see if we can get your logic to make sense.)

 

[bilby]

Some seem to think Price is suspect for pretending to be charitable when he's really doing this as a way to drum up more revenue; others seem to think he's really being charitable, but that he's being too charitable (wrong word, really) by virtue of paying the same salary to entry-level employees as certain higher ups, and that this is not a good thing—which it clearly isn't: Paying an unskilled employee the same as a skilled employee is going to curtail (or outright destroy) the skilled employee's incentive for sticking with that company, unless they have a wicked egalitarian bent. DBT and I think he's awesome for being bold enough to do this well-intended thing, and that exploitation of wage-earners is morally wrong and that someone at the forefront of modern business needs the nads to own up to it and be willing to work towards changing it.

After thinking on it, I think if it were my money, I would bump my lesser-skilled employees up to whatever income bracket I considered necessary to ensure their ability to sustain themselves without financial distress, while bearing in mind that there are many people who simply cannot manage money, no matter how much they have; but I would pay my more highly-skilled or professional employees considerably more, since that seems not only fair but just common sense.

What's most certainly true is that people with very large incomes—say in the many millions per year—have far more money than they need and might want to consider how they can put their money to productive, even beneficial use. Note I say "consider", since if a billionaire who's earned her money lawfully, and through her own effort and intelligence, refuses to part with a single nickel, that ought to remain her right in any civilized nation, since to force her to part with that nickel against her will would make that parting something other than charity. Charity should be wholly voluntary and genuine. That being said, no-one in a civilized nation should be prevented from (nor feel ashamed for) calling the billionaire who refuses to part with a nickel a money-grubbing Smaug, and to hold her in private or public contempt.

That being said, if Steve Weiss, from the old board, were here, he'd tear me a new ass for saying that. And Ayn Rand, whom I revered when I was in my thirties, and still admire, though to a lesser degree, would call me all sorts of names, using many exclamation points (far more than the Chicago Manual of Style recommends).

What rot.

Nobody is going to quit a $100,000 a year job as a manager just because his subordinates also get $100,000 a year - not if the alternative is to do the same job for $90,000, with subordinates who get paid $40,000. You would need to have a very sick mind to fuck yourself over just for the pleasure of lording it over people who are being fucked over even more than you.

 

[WAB]

Some seem to think Price is suspect for pretending to be charitable when he's really doing this as a way to drum up more revenue; others seem to think he's really being charitable, but that he's being too charitable (wrong word, really) by virtue of paying the same salary to entry-level employees as certain higher ups, and that this is not a good thing—which it clearly isn't: Paying an unskilled employee the same as a skilled employee is going to curtail (or outright destroy) the skilled employee's incentive for sticking with that company, unless they have a wicked egalitarian bent. DBT and I think he's awesome for being bold enough to do this well-intended thing, and that exploitation of wage-earners is morally wrong and that someone at the forefront of modern business needs the nads to own up to it and be willing to work towards changing it.

After thinking on it, I think if it were my money, I would bump my lesser-skilled employees up to whatever income bracket I considered necessary to ensure their ability to sustain themselves without financial distress, while bearing in mind that there are many people who simply cannot manage money, no matter how much they have; but I would pay my more highly-skilled or professional employees considerably more, since that seems not only fair but just common sense.

What's most certainly true is that people with very large incomes—say in the many millions per year—have far more money than they need and might want to consider how they can put their money to productive, even beneficial use. Note I say "consider", since if a billionaire who's earned her money lawfully, and through her own effort and intelligence, refuses to part with a single nickel, that ought to remain her right in any civilized nation, since to force her to part with that nickel against her will would make that parting something other than charity. Charity should be wholly voluntary and genuine. That being said, no-one in a civilized nation should be prevented from (nor feel ashamed for) calling the billionaire who refuses to part with a nickel a money-grubbing Smaug, and to hold her in private or public contempt.

That being said, if Steve Weiss, from the old board, were here, he'd tear me a new ass for saying that. And Ayn Rand, whom I revered when I was in my thirties, and still admire, though to a lesser degree, would call me all sorts of names, using many exclamation points (far more than the Chicago Manual of Style recommends).

What rot.

Nobody is going to quit a $100,000 a year job as a manager just because his subordinates also get $100,000 a year - not if the alternative is to do the same job for $90,000, with subordinates who get paid $40,000. You would need to have a very sick mind to fuck yourself over just for the pleasure of lording it over people who are being fucked over even more than you.

Rude comment has been deleted, after allowing the rational mind to tame the reptilian kernel. Spinoza rules.

 

[Axulus]

I'm over 11 pages into this thread, and so far I've seen a bunch of posters say dismal has a problem with this, when really it's everyone else that has a problem with dismal calling this a move that is more akin to charity than a profit maximizing business decision. At no point did dismal say he has a problem with people who have goals other than profit maximization, so long as they are using their own money.

The group think tenancies and the personal attacks when someone strays from the group think line of thought are really well highlighted in this thread, and are more emblematic of religious behavior than of behavior from rational people.

I'm not saying everyone is doing this, there are some that are putting forth an argument that this move may actually increase profits and thus the above does not apply to them.

 

[DBT]

Some have wrongly called it an act of charity. Whatever his motives, the action he took is an example of what can be achieved in terms of fair play.